[OPE-L:7352] Re: Re: Re: Re: Re: interpreting Marx's texts

From: Diego (diego.guerrero@cps.ucm.es)
Date: Thu Jun 06 2002 - 13:42:27 EDT

> 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.

I disagree. Ricardo and Marx wanted what Mattick and you say but wanted to explain prices too. Of course the object of a theory of value is not to explain every price of every commodity at every moment in time at a hyper-individualistic level. Its object is however to explain the main trends in the value of the main types of commodities or sectors because this amounts to explain the heterogeneous and unequal process of capital accumulation which in turn determines the process of allocation of labor inside the economy.

> 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?

Nothing in matrix algebra avoids to have into account the effects of crisis-induced devaluations. I-O analysis has to be based not on technical conditions of production but in the specific aspect of physical conditions we call labor conditions of production (always a social phenomenon). If ENRON does not produce profits anymore or if Napster's assets in t+1 are reduced to 10% of what they were at t, the I-O tables have to take into accounts all this. Don't forget that I-O statistics and in general all statistics represent actual data (including prices), not theoretical data or prices. Therefore, the distinctions I made in response to Fred Moseley apply here.

> (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

I guess you are referring to Alfredo Saad-Filho. I promise to read this book.


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