From: Gerald_A_Levy@MSN.COM
Date: Mon Sep 26 2005 - 21:22:33 EDT
----- Original Message ----- From: "Jurriaan Bendien" <adsl675281@tiscali.nl> Sent: Monday, September 26, 2005 6:18 PM Subject: dialectics, value and complexity Jerry, I realise that I wrote in my short off-the-cuff piece on dialectics (not doing full justice to the subject obviously) that: "Instead of an object in thought, we focus on a real object, the substantive thought being, that this object has its own specific dialectical properties, which have to be discovered rather than assumed, and which can be known." A professional philosopher would hasten to point out that, of course, you cannot contrast "an object in thought" with "a real object" in that way, because "an object in thought" is just as "real", i.e. just as much part of reality, as any other object we may be aware of or experience, even if the object in thought happens to be just a fiction. It would be more appropriate to say, "Instead of an object *existing only in thought*", as contrasted with something that exists independently of the individual knower. The very distinction I imply, already suggests a contrast between the "ideal" and the "material". The "real" in the above quoted sentence is more along the lines of "get real, rather than fantasize", as one might have occasion to say. I suspect that part of the dificulty about dialectics is linguistic. A German word like "bestimmt" can be translated as "determinate" or "defined" or "limited", but the determinations, definitions or limits could be logical, causal, existential, or ontological etc. It's all in how you try to bridge the gap between "what's in here" and "what's out there" with meaningful distinctions. The way I've tried to overcome this linguistic difficulty is by talking about it in terms of "non-arbitrary" - i.e., something might have a practical, physical or social limit, which is nevertheless not a formal-logical limit. In practical reasoning, what you in fact do is, you combine the logical and empirical limits in a reasonable way, both deducing and inducing. In this sense, dialectical reasoning in Marx's substantive sense can occur, only if those non-logical limits have already been discovered, because only then can you reason at a "higher level" based on the knowledge of all those real limits, and perhaps discover a "higher or overarching logic" in various circumstances under study, that would escape you, as long as you had your nose too close to the minutiae of everyday empiria. But for Marx, that base knowledge is actually often strongly "empiricist" (if I dare to use that word) and not speculatively introduced, i.e. grounded in some kind of systematic assimilation of real observational experience, experience of something beyond thought-contents. Hence his irritation with academics who wanted to hang out as "dialecticians" when their real empirical knowledge was very patchy, when they hadn't bothered to study the facts. As a digression: - This distinction between real and ideal might be a subtle point to mention, but it has major implications for the endless dispute about values and prices also. Among other things, as I have noted, there are such things as "real" prices actually charged, and "notional" (ideal) prices, yet these notional prices can nevertheless influence economic events, even although they only exist in people's heads or in a book. This is forgotten in the stampede to banish an objective theory of value from economics (of course, an economist does not think his own bank account is "subjective" at all, he wants his money to be there, regardless of anybody's subjective, utility-maximising preference). Take, for example, a really big composite price, like world gross product for 2004, estimated at US$40.9 trillion. To compute that price, you need a very substantive, comprehensive value theory, and I am not joking, because different valuation methods will produce differences of over one trillion dollars (see for yourself in the different World Bank estimates), even assuming the national totals are validly computed. What is the "reality" of this price, you might well ask? However we answer that, it's clear that we have a price here, which can nevertheless influence policy in some way, directly or indirectly. People will nevertheless say yes, but *value* is only something in people's heads, it has no objective "real" existence. Maybe that is true, insofar as value - just like price - is a human attribution, a social *objectification* of a (shared) idea. But in other respects, value has a very practical existence; not only because it physically takes amounts of real work to make goods and services, but also because goods have value, prior to, and after they are exchanged for a price, and that means that the price they previously had, or will have in the future, is not some random number, but a predictable one. It is all very well to predict future prices from past price trends, but we have to be aware of the *value assumptions* which entitle that activity of prediction in the first instance - the assumption implied is nevertheless that goods and services will have a value, independently of their exchange, i.e. independently of whether they are traded or not. That is ultimately why they are predictable at all. You can of course try to explain it all in terms of supply and demand, but even in doing this, the economist slipslides between actual demand and actual supply, and a potential (hypothesized) demand and a potential (hypothesized) supply. In this sense, the notion of market equilibrium is precisely the means for spiriting away any notion of objective value. There is a sub-dispute in economics about *administered* prices also. Neoclassical economics argues that "real" prices are market prices, and that if no market price exists, but only an administered price, a market price can be imputed, based on what a good or service would be worth, if it was traded in markets. This again clearly involves a value theory, and in the light of my previous remarks, the argument, insofar as it is about "reality", is really spurious. But why cannot administered prices be "real" prices anyway? They function just exactly the same way in everyday life as market prices, although they might not respond as directly as market prices to the forces of supply and demand, which is the main criticism (in reality of course, many corporate or Treasury prices are administered prices anyway; supply or demand forces may not have very much to do with their magnitude, or at least a significant component of their magnitude). This also feeds into a very important debate in socialist economic theory reaching back to Oskar Lange, i.e. what "mix" of administered prices and market prices is desirable for optimising the allocation of resources, and how you can shift more and more from a mediated to an unmediated (direct) allocation of resources, on the basis of a socially accepted morality (as I've also noted at times, markets do not provide any particular morality of their own, other than the obligations necessary to settle transactions). The really sad thing about the *general* argument that market prices will provide an optimal allocation of resources, is that what exactly "optimality" consists in, is never really specified. It *cannot* be specified either by definition, because in its own terms, it just consists in what all individuals want to do with their money (cf. Milton Friedman's "Free to Choose"). At least in socialist economics, there is some (partly normative) notion of optimality, specifiable in terms of what we scientifically know about normal human needs and requirements. The pro-market argument is therefore never really in terms of what is good for people, but overall comparative economic results. E.g. Ronald Reagan would justify his system, on the ground that American agriculture could produce much more output, at a fraction of the labour cost incurred in Soviet agriculture (The 1998 wheat crop of Kansas alone would make nearly 34.6 billion loaves of bread, or enough to provide every person on earth with nearly six loaves of bread. Mennonite immigrants from southern Russia in fact introduced Turkey Red wheat seed in Kansas, during the 1800s, and nowadays hard red winter wheat dominates the Kansas countryside, although they are experimenting now with hard white varieties). But, getting back to Marx, who got irritated about "all the palaver about the theory of value", the more I've read about values, prices and markets, the less I believe what I read, because the theories frequently do not truly capture how those things really function in empirical reality, even at the simplest level. The argument made is e.g. that market societies are "too complex" to make collective planning possible, and so on (Prof. Domhoff repeats this verity also). But the core of Marx's argument is really that by *changing social relations*, a lot of the intermediation between producers and consumers simply disappears, and with it, a lot of the apparent "complexity". Planning may be a complex cognitive task - even if computer-aided - but markets can sure add a heck of lot of complexity of their own. In New Zealand, for example, they used to have one national grid with regional power boards, and one set of administered prices for everybody. Worked perfectly well for decades; it could, of course, be technically improved, and occasionally was, beyond regular maintenance. Then they hired consultants at taxpayers expense, and they carved that all up, into competing private companies selling at "market rates" (sic.), which bought each other up, and were in turn bought out by foreign owners, who charge higher prices to the consumers, to obtain "shareholder value". I think the govt was so nice to give every citizen a bit of money as their share of the initial sell-off. Obviously though, thereby - regardless of how you might view the merits of the whole exercise - you create a very "complex" system of market signals, influencing New Zealand electricity supply, which stretches around the globe, from the New Zealand consumer switching on a lightbulb, to a shareholder doing his accounts, in some other, faraway country. The privatised electricity conked out in Auckland at a certain point for a week, because they had failed to maintain the cable network, and they had to get Australian labour out to fix it (they had "downsized"). Point of this story however is, this whole "complexity" is *socially constructed*, it did not exist before, and does not need to exist by virtue of some physical or technical necessity. The "complexity" here, is merely a set of intermediaries between producers and consumers, which disguises, who gets the income from an activity, and what the real source of that income is. The irony is, that at the very same time, the New Zealand government cannot really tell the full truth about the real income distribution among the population in New Zealand! After a decade of restructuring and sell-offs, a New Zealand Department of Labour economist cautiously implied in an official report that real wages "from the point of view of employees" (!) must have fallen absolutely over the period 1993-1996 ( http://www.dol.govt.nz/PDFs/lmb971d.pdf). Regards Jurriaan
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