[OPE-L:7336] Re: Re: Re: Re: interpreting Marx's texts

From: Rakesh Bhandari (rakeshb@stanford.edu)
Date: Wed Jun 05 2002 - 13:52:28 EDT

re 7303

>Matrix algebra gives us an easy way to calculate both direct and production
>price vectors (as eigenvectors) which differ a bit from Marx's "vectors",
>but serve as well as the same type of attractors or centres of gravity for
>actual prices. Even if these vector are not Marx's ad pedem litterae, they
>are in agreement with Marx's spirit and serve the same purpose: the
>theoretical understanding of both exploitation-and-competition actual
>processes, a sector or reality which we all want to capture.
>What do you think?

Dear Diego,
I think that Marx's theory of value was never meant to determine 
absolute or relative values of individual commodities (I find 
Mattick's chapters on the labor theory of value in Marx and Keynes to 
be in the spirit of Marx).

Similarly, I think Baumol is correct that this is also why  there has 
been so much trouble in understanding Ricardo's first chapter; it is 
read as a 93% pure labor value theoretic explanation of relative 
prices rather than the foundation stone for a macro dynamics which is 
based on an inverse relationship between profits and wages. For 
Ricardo, the importance of the theory of value is not in a theory of 
prices but in the critique of the Adding Up Theory of Price which it 
allows.  And I think the latter holds at the macro level, not at the 
level of individual prices which exhibit many curious effects once 
distributional parameters are changed.

It also does not seem to me that Marx would have been much interested 
in the vectors which can be formed by matrix algebraic calculations. 
Marx never attempted a theory of price formation (at least as 
economists understand it) and exchange ratios. In his so called 
transformation, Marx was primarily interested to show that prices and 
exchange ratios do not invalidate the value concept as they indeed 
appear to do; Marx wanted to free himself to use the value concept 
for other (more macro) purposes. For example, in examining changes in 
the rate of profit over time, a Marxist is led by Marx's value 
reasoning to make estimates of changes in s/v, OCC and VCC (as well 
as turnover) while a neo Ricardian would look for changes in the real 
wage and the technical conditions of production. While the technical 
conditions of production could remain the same, the rate of profit 
could increase by a crisis-induced devaluation of the VCC. How would 
a neo Ricardian working  on the basis of an input-output matrix 
explain the most important purgative role of crises in the course of 
capital accumulation?

(By the way, I think Alejandro has provided the clearest explanation 
we have of what the differences between the TCC, OCC and VCC are in 
his very valuable book Value of Marx.)

Comradely, Rakesh

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