From: Paul Cockshott (wpc@DCS.GLA.AC.UK)
Date: Sat Feb 11 2006 - 18:20:02 EST
Ian wrote F&M wrote "Laws of Chaos" as a response to the TP. They are both highly technical mathematicians (amongst other things). So no doubt they had a good hard look at the neo-Ricardian critique of Marx's value theory. Indeed, Emmanuel in the collection "Ricardo, Marx, Sraffa" has a good work-out with the Sraffian theoretical framework, and points out how sensitive the results are to the assumption of uniform profits. But as far as I can tell, F&M do not reject the N-R critique on its own terms. They accept what it says. Their response is, IMHO, groundbreaking, because the alternative theoretical framework they sketch -- probabilistic political economy -- is original, very promising and still under-developed to this day. This much we know. ----------------------------------- I agree with all of the above ---------------------------------- However, I have always thought that their defence of the labour theory of value is the weak part of their book. They derive the results regarding correlation between labour-content and price. They note that other real-cost measures, e.g. oil-content, might have similar properties. However, they decide labour-content is the appropriate theoretical measure because (i) other commodity-types may come and go, but labour persists, and (ii) political economy is essentially about people. You also show that other commodity real-cost measures aren't as well correlated with price. So empirically the labour-content theory is a best fit to the data. The problem, in my mind, with this defence of the LTV is that it is ultimately about empirical correlations. Marx's value theory (which may be wrong -- I am not begging the question only pointing out a difference) is intended to explain how or why social labour *necessarily* manifests in "dazzling money-forms", or how labour-time acquires a value-form via objective, causal relations. In my view, the semantics of representations (e.g., the meaning of the hour-hand of a clock, the meaning of a temperature on a thermostat, the meaning of the dollar in my pocket etc.) can only be explained via (loop-closing) causal theories of objective semantics, and not simply correlational theories. -------------------------------------- Paul I disagree at this point, the theory of F&M is a causal theory, just as much as atomistic accounts of thermodynamics are causal. ----------------------------------------- So, at best, F&M's correlational theory provides strong evidence and strong reasons for holding a LTV (and a promising re-representation of economic relations), but it is not the whole story. I am not sure if the conclusion you draw regarding value-theory really does drop out of F&M's model (it may do -- you may be drawing out what is implicit in it). ----------------------------- Paul It is implict rather than explicit. --------------------------------- But given that I do not think F&M have established a LTV in the strong sense (causal, objective etc.) then it might not be too surprising that their version of the LTV can't sustain the concept of an objective value-theory for capitalism, invariant over class perspective. Stretching the analogy a bit: although it's conceivable that the semantics of clocks depends on who's reading the hands, it is a fact that the semantics of clocks is fixed and invariant in our society. There aren't proletarian clocks and capitalist clocks. ---------------------------------------- Paul But there most definitely is a capitalist and a working class political economy. - economics is not physics - yet. ------------------------------------------- Ian Is there a proletarian meaning of 1$ and a capitalist meaning of 1$? --------------------------------------- Paul At one level there certainly is. To a worker a dollar is a means to live, to a capitalist it is a means to exploit others. To return to the original point about the prices of production and labour values - these reflect the differences in meaning of a dollar above. Labour values reflect a principle of equality based on the exchange of labour time between producers and as such are an expression of a commonsense petty producers view of production. Smith puts it forward dating from a time when the preponderance of production in Scotland was still by independent producers rather than modern capitalist industry. Here we get the transfer of the operational ideology of petty commodity producers into political economy ( the schoolmans theory of the just price obviously preceeded this and provided the route ). Ricardo both expresses the labour theory most rigorously but also is pulled by the antagonistic principle of equality based on equal rates of return to capital. This contradiction between two principles of equality lies at the heart of the crisis of the Ricardian school in the 19th century. The rigorous assertion of the principle of equality of labour value led to Ricardian socialism and Owenism. Marx was, I think, mistaken to believe that one could within a single theoretical structure reconcile these two principles of equality. If, as Sraffa does one makes the capitalist principle of equality of return central, then labour value appears irrelevant. To the conciousness of the rentier, labour is irrelevant, capital is innately self expanding. The Neo -Ricardians do demonstrate that the two principles are irreconcilable. What is original in F&M is that they break with the ideological obviousness of either labour values or prices of production and uncover actual stochastic mechanisms regulating prices. The mechanism they uncover indicates that so long as the rate of surplus value is not very high indeed, then prices can not deviate very far from values. This acts as restraint on the extent to which the capitalist principle of equality embodied in prices of production can operate. Hence the transformation from values to prices of production can not complete, because the power of capital over labour is not complete, Capital is still forced to share half or more of the product with labour. This means that it has to account for labour and the scarcity of labour continues to restrict it. The lower the rate of surplus value, the greater the power of the working class, the more effective will the law of value be. Conversely if, as today, labour can be had very cheaply in newly industrialising countries, then it appears that the capitalist principle of equality based on equal rate of return to capital prevails.
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