From: Jurriaan Bendien (adsl675281@TISCALI.NL)
Date: Tue Apr 17 2007 - 12:39:24 EDT
A lot of what Kliman does, is branding. He has the franchise for the TSSI brand, and then he tries to get endorsements for that brand. But the dispute about equilibrium versus non-equilibrium economics is confused in nthe meantime. Formally, equilibrium economics states the thesis that unimpeded markets will always tend toward a supply-demand balance, or what amounts to the same, that there exists a set of prices at which all markets will clear. But substantively what the argument is really about, is that if there is a free market then supply and demand will adjust to each other. The formal argument cannot be proved absolutely, but with the latter argument Marx never actually disagreed. Marx knew very well that supply and demand adjust to each other, they will do that even if there is no market at all, and he refers freely to "equilibrating" forces. The real dispute is about which kinds of trade are beneficial, and which are not, and what adjustments are acceptable, and which are not. That is the critique of political economy. "Can one develop through the analysis of the logical construct of simple reproduction an explanation of why capitalist dynamics will likely be characterized by constant non equilibrium, with equilibrium which is the rule presupposed by political economy only at best a momentary transitory point?" (Rakesh) I think the answer to that question is no, for exactly the same reason that supply-demand curves prove very little. It all depends on what numbers you feed into the equations and what assumptions you make. There exists no logical proof that capitalism must always tend towards equilibrium, or towards disequilibrium. There exists only the empirical evidence of a succession of booms and slumps. Metaphysicians want to deduce logically from first principles that capitalism must break down, or spontaneously balance itself, but scientific people want to explain the observables. What Henryk Grossmann really argues, is that Marx does use the hypothesis of equilibrium: "He assumes a state of equilibrium with respect to supply and demand, both on the commodity market and on the labour market, in order to be able to cover the more complicated cases later. http://www.marxists.org/archive/grossman/1929/breakdown/ch02.htm and: "This identity of price and value is in turn only possible if the apparatus of production is assumed to be in a state of equilibrium." http://www.marxists.org/archive/grossman/1929/breakdown/ch02.htm Here Grosmann obviously goes wrong. Marx makes no particular assumption about equilibrium, he assumes only that products will be bought and that they will sell, and - at least initially - that prices and values are the same. The fact that products will be bought and sold, and that they will sell at prices which reflect their real value, does not automatically imply any supply-demand equilibrium at all. That would be very sloppy thinking. Long ago Roman Rosdolsky and Ernest Mandel explained clearly why the reproduction schemes cannot be the basis for a theory of crises. Why people are still trying to base the theory of crises on the reproduction schemes is rather puzzling to me. I suppose that some people have a sentimental attachment to certain Marxist theorists. Jurriaan
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