From: Ian Wright (wrighti@ACM.ORG)
Date: Wed Feb 22 2006 - 17:59:01 EST
Hi Fred > I would reformulate your question as: > > Why are the two aggregate equalities not satisfied in > Bortkiewicz's theory, but are satisfied in Marx's theory? > > And my answer would be: > > Because the two theories are based on entirely different > logical methods - Bortkiewicz's theory with PHYSICAL quantities > as the initial givens and Marx's theory with MONEY quantities > as the initial givens (along with the quantity of current > labor and the MELT). It is not surprising that two such > diametrically opposed logical methods come to different > conslusions with respect to the two aggregate equalties. Simultaneous and sequential determination are intimately related because the fixed points of a dynamical system are the solutions of the special case simultaneous system in which the input state yields the output state. Also, "initial givens", or different starting points, become less important when there are dynamic feedback relations between the physical quantities and money quantities. Distinguishing theories on the grounds of different initial givens or exogenous variables, such as, say, how the "surplus school" distinguishes itself from neoclassical economics, is, I think, ultimately a sign of partial and incomplete theories, rather than complete and incommensurable theories. I think the same applies to trying to demarcate Marx from other theoretical advances on the grounds of having different initial givens. In sum, I don't think it is possible to forever separate your interpretation of Marx's understanding of capitalism from the neo-Ricardian. The mutual infections have already occurred. Once you introduce physical quantities and dynamics into your macro-monetary interpretation then my guess is that you will be faced with the N-R special case. > I think it is an interesting and worthwhile question why Bortkievicz's > theory breaks down under these conditions. But it has nothing to do > with Marx's theory. It is interesting and worthwhile because Bortkiewicz's algebra has something to say about the theory of economic value. Marx has a lot to say about the theory of economic value. How can you then declare that there is no relation between them? I don't understand. > I agree with you that the aggregate equalities are essential in Marx's > theory. But I argue further that these aggregate equalities are not > conditions equalities, which may or may not be satisfied, depending on > certain conditions, but are instead identities, which follow of necessity > from Marx's logical method of: (1) first determining the total > surplus-value (in Vol. 1 at the level of abstraction of capital in > general) and then analyzing the division of this predetermined total > surplus-value into individual parts (in Vol. 3 at the level of abstraction > of competition); and (2) taking the same quantities of money capital as > given at both levels of abstraction (the initial M in M - C ... ). OK, let's take that as shown. What happens if we then introduce the physical quantity side of the economy, and properly formulate a dynamic theory in which money-capital is advanced to production? I am suggesting that the N-R special case of simultaneous determination then becomes highly relevant to the theory of economic value. It has to be dealt with. We are blind-men around the elephant, and each is a partial view. The full view requires critical synthesis. So I am in simple disagreement with you on this methodological point. Best wishes, -Ian.
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