[OPE-L] Karl Marx on unequal exchange in the "Grundrisse"

From: Jurriaan Bendien (adsl675281@TISCALI.NL)
Date: Wed Feb 08 2006 - 17:09:32 EST

Hi Jerry,

You were fortunate with Willi Semmler. I never had the benefit of a
good economics education at the New School, I mean I just read some books
and try to crack the riddle. Generally, you can improve if you apply
but it's not like a real schooling by economists, you stay basically
autodidact. If I hadda wouldda have done a thesis on public finance,
that would have been a gain. Like you say, maybe life is what happens
when you are making othere plans... in a certain phase of life anyway.
A mature adult does actually have to make plans and stick by them.

You wrote:

Monopolies, like cartels, tend to be unstable over the long-term and are
generally not permanent.  It is precisely the higher than average rate
of return on investments received by monopolies which encourages
other firms to find a way -- somehow -- to break into the market and
bust-up the monopoly.

Yes, Mandel pointed this out to me in his big book. Which is why
stamocap theories have to be relativised at least.

You wrote:

The situations that you describe, though, could be inflationary. If
there is an increase then in the rate of inflation then the 'real' magnitude
of profit would be less than the nominal magnitude of profit.

Yes. Mandel also dealt with that, although his idea of credit is a bit
simplistic. What if you bring down inflation to a low level, but
you still have to deal with these mysterious Marxian value
relations anyhow?

You wrote:

We seem to have a disagreement here.  I'm still trying to figure out what
the basis of that disagreement is. I think it is a micro/macro disagreement.
I.e. I agree that accounting tricks and tax rules can change the
_individual_  rate of profit for firms.  The question is whether it can
change _aggregate_ profits.  This is not from my perspective
primarily an accounting issue, it is a theoretical one.

Oh, absolutely. Tax rules can mean that you simply cannot make a
profit out of something, or are permitted to make a profit out of
something. But part of it is a matter of definition. If a good part
of tax-assessed depreciation is really undistributed profit,
measured by the difference between economic depreciation
and tax-assessed depreciation, then what is the total profit really?
If you are a finance controller, thing to watch is the total
revenue stream, that is what counts, I mean there a deductions
here, exemptions there and additions there... In the end,
what people are concerned with is a net income from a
revenue stream.

You wrote:

I agree that the identity of value and price in Volume I assumes the
exchange of equivalents.

Well, in the "Resultate" manuscript Marx actually goes further
and tries to say something about the valuation of gross product.
Of course, he wrote that in the 1860s. Point I tried to make is
that anybody trying to define gross product is already assuming
a value theory and a theory of economic exchange - whether
you are Marxist or whatever. Essentially, Marx is saying.
assume supply and demand gravitate towards some kind of
balance, what now explains the dynamics (laws of motion)
of the economy? Why is this balance reached at this price
level rather than any other level?

You wrote:

In any event, I agree that when we are considering the capitalist economy
more concretely -- especially in the context of current conjunctural
studies of the current world economy -- we can no longer assume the
exchange of equivalents.  The assumption needs to be dropped in order
to comprehend the reality of UE.   Why hasn't this been done more by
Marxists?  I think that many Marxists simply take the presumptions and
assumptions of very abstract theory and  apply those presumptions
and assumptions to the analysis of more concrete topics.  From my
perspective, this is a *huge*  methodological error. While it runs counter
to Marx's own method -- I believe it may be a consequence in part of
the incomplete state of Marx's project and the inability of many Marxists
to interrogate capitalism in ways that went beyond Marx.

That is true in my view. The discussion gets stumped at the TP.
My own way over that hurdle was to look at real data, real accounts,
and the epistemic problems you confront there. And really, most
businesspeople have very little problem with the concept of value,
although Marxists may have. They accept that you can have a
"real value"or "real worth" regardless of what fluctuating prices
may be. My own view of the TP is really that it's solved once we
get clearer about the price form, all the assumptions involved
in imputing and constructing prices of various kinds. I haven't
had time yet to sort it out, and write it all that up though. The
problem is that economic theory takes the price form rather
for granted (even although financial analysts wouldn't). It's
accepted that with prices you have counting units and can
compute, no further questions asked.

You wrote:

How robust is the claim that EE is the exception and UE is the
norm *empirically*?  I.e. what is the rate of variation which has
been observed empirically?  Are the rates of variation statistically
very significant or are they narrow?

I cannot prove that just now although it seems as clear as day
to me in the sense that this is inherent in the very meaning of
market fluctuations and inherent in the process of the levelling
out of profit rates through competition. I'd have to construct
an empirical case to show what would be EE and what is UE.

Jayati Gosh writes: "While developing countries as a group more than doubled
their share of world manufacturing exports from 10.6 per cent in 1980 to
26.5 per cent in 1998, their share of manufacturing value added increased by
less than half, from 16.6 per cent to 23.8 per cent. By contrast, developed
countries experienced a substantial decline in share of world manufacturing
exports, from 82.3 per cent to 70.9 per cent. But at the same time their
share of world manufacturing value added actually increased, from 64.5 per
cent to 73.3 per cent."

You wrote:

Enough for now!  You must be a quicker typist and/or a quicker
writer and/or a quicker thinker than I!

Well in economics you may think quicker than me, but
I have been practicising writing faster. But just because
I write faster, doesn't necessarily mean it's any good. I
still have to deal with Ian's valid critique about the
"simplest case" where Marx's argument doesn't seem
to work. Simply put, you have M-C and C'-M' and in
between a value product is produced which in some way
has to determine the magnitude of C'-M' (since in the
normal run you don't purchase your own product,
except for intra-corporate transactions), and how do
you model that; and isn't there a feedback problem.

If have to tackle a few other problems just now, so
maybe a bit tardy in replying. Better not overstrain
my little brain...


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