From: Rakesh Bhandari (bhandari@BERKELEY.EDU)
Date: Sun Apr 08 2007 - 13:21:12 EDT
Allin wrote: > > >You're replying to Fred here, but I think that in the relevant >respect my view are close to Fred's so I'll dive in. > >Of course, in the real economy "everything is changing all the >time" (more or less). Marx and Ricardo knew that; everyone knows >that (even including the neoclassicals!). > >But that's not the point. Marx was interested in (among other >things) "modeling" the quantitative relationships between certain >key magnitudes in the capitalist economy. > >This is a difficult task at the best of times, and all the more >difficult if you try to incorporate continuous change. >Therefore, Marx _assumed_ "no change" in certain variables, for >analytical purposes, even though he was well aware that this >assumption was in a sense artificial. Specifically, when >conducting his quantitative investigation of the relationship >between values and prices of production Marx assumed that values >were constant (and therefore, also, prices of production). Where in chapters nine and ten of Capital III does Marx implicitly or explicitly assume that the means of production and wage goods are of the same kind as the produced commodities, and that among the produced commodities must be found the same kind of goods used as means of production and wage goods at fixed unit values? Given that Marx thought that unit values changed not only because of productivity changes in their own sphere of production but as a result of productivity improvements in any of the branches supplying means of production, there is no reason at all to believe that the produced commodities will have the same value (or even be qualitatively identical) to any of the commodities used as means of production and wage goods . Marx himself never said that the cost prices were determined on the assumption that the means of production and wage goods had sold at value, and he never said that the cost prices had to be transformed retroactively by--in the modern jargon--transforming the inputs from values/simple prices to prices of production. Marx has successfully 'modeled' the relationship between value and price and shown how the law of value may assert itself in a mediated fashion as a result of the contradiction between socialized and general commodity production and the tendential equalization of profit rates resulting from private profit making through the production of commodities by means of wage labor. We can't ever know with precision the respective values of the produced commodities as we can only roughly infer the value of the used up means of production from their flow price which we know with the introduction of the category of price of production is not proportional to actual value, but that does not undermine Marx's theory. Indeed our ignorance here is simply the result of the fetishistic representation of labor time relations. The quantitative problems are crucial-- the movement of the mass and rate of profit and inter-temporal changes in exchange ratios are quantitative problems after all. But as for seeing value at one point in time in exchange ratios, that is impossible. Indeed this is Marx's point. But if you are not satisfied with this, I still the Shaikh fixed point iteration can do enough to save the value hypothesis under the conditions of simple reproduction or equilibrium in the neo classical sense. The iteration surely does not give us good grounds for believing that value is 'underneath' (a misleading metaphor; hence my very qualified analogies to quantum mechanics) price but shows that it is not impossible. Rakesh > One >step at a time: if you can get that right, then maybe you can move >on to the case of continuous change, but that is an order of >magnitude more complicated. > >You emphasize the philosophical aspect of Marx's discourse. Fair >enough, that it is an important aspect. But you're not giving >another aspect its due: Marx's attempt at a quantitative >understanding. That is a valid intellectual discipline in its own >right, and you can't short-circuit it by trying to understand >"everything at once", including continuous change in all the >terms. Not if you want to produce meaningful results. > >Allin.
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