From: Alejandro Agafonow (alejandro_agafonow@YAHOO.ES)
Date: Sat Aug 11 2007 - 11:08:29 EDT
Jurriaan Badien: “Thus, contrary to what some Marxists falsely suggest, this law never applies to the valuation of ALL economic goods. It is never the case, as some Marxists falsely suggest, that the law can govern "a whole capitalist society", it could at best govern only its trade in new output of reproducible labour-products (though the cost-structure of new outputs no doubt influences the exchange-values of other assets). […] So the anti-Marxist, pro-Marx socialist critique of economics is that economics operates with deformed notions about what markets are, what prices are, what economic allocation is, what the dialectics of competition and cooperation are, and how economic life functions in the real world. […] Che Guevara's and Bettelheim's ideas are really a bit confused. The question is not about the law of value at all, the question is: given state control over property rights, enforced by a socialist army, how do you best allocate
resources so that the needs of citizens are met?”
The above is a clever statement. It summarizes the pitfalls of the Marxist transformation argument as well as the equilibrium mania of walrasian-paretian economists. Nevertheless, Jurriaan makes a mistake when writing in favour of a so called clear opened market mechanism without the industrial secrets that rivalry requires to be effective and, at the same time, thinks in the elimination of the whole circuit of intermediate transactions between producer and consumer.
These are opposed ideas because we can’t erase the circuit of intermediate transactions and retain at the same time any market mechanism, no matter how clear it is. The contradiction in Jurriaan an Engels rests in the defence of a direct way of fulfilling community’s needs surpassing the round about way of market, but forced to recognize the only (until very recently) institutional framework able to put in motion social production in a proper scale: market. Until very recently because today a totally planned economy is technically feasible, as Coclshott & Cottrell shows.
Another clever appreciation of Jurriaan is: “The problem of economic science is then to find ways to ensure that the different possible allocation principles adequately cohere with each other, and that they are indeed efficient and beneficial with respect to meeting people's needs.”
In fact I’m engaged in the development, in the long run, of a Dualist Theory of Value that surpasses the monism of the pure Labour and Subjective Theories of Values. The value phenomenon in actual or prospective democratic commonwealths goes beyond the exchange of goods and comprises the influence of the constitutional structure upon values, whatever we understand about it. Of course, there are also none-profitable exchanges forming a field of not ruled cultural norms.
By the way. Henry Dickinson’s market comprised a database filled with technical and financial information about all the enterprises in the socialist community, accessible by economic authorities as well as production managers in charge of those firms. But he never said that this imply to reject the circuit of intermediate transactions.
Kind regards,
Alejandro Agafonow
----- Mensaje original ----
De: Jurriaan Bendien <adsl675281@TISCALI.NL>
Para: OPE-L@SUS.CSUCHICO.EDU
Enviado: sábado, 11 de agosto, 2007 13:39:10
Asunto: [OPE-L] A startling quotation from Engels
I think what Engels means is that in a hypothetical socialist society there would be no problem of business secrets, hence no problem about obtaining economic knowledge, because there would be no business competition of a type that required essential business operations to remain a management secret. Socialist emulation would need to prove gains made in labour efficiency and efficiency in meeting needs precisely by "opening the books". The basis of economic life would be transparent, because
(1) there would no longer be any competition between private producers over sales, costs and profits, hence no conflict of interests between the producers in this respect. You would be welcome to inform yourself about economic operations. Knowledge would be pooled to produce the best results benefiting all, the only question that remains is what forms of co-operation work best to obtain the best overall result (and there might be competition about that). In this sense, Engels also believed that the problem of measuring Marx's economic categories and variables using price data was essentially one of lack of access to private data on business operations, that would allow the measurement to be made with any exactitude.
(2) a whole circuit of intermediate transactions between producer and consumer (and all the labour-time necessary for it) would be simply eliminated and redundant, because, after changing a series of property rights, this circuit is no longer necessary.
The law of value is a regulating principle applying to the economic exchange of new output of tradeable, reproducible labour-products, stating essentially that the relative exchange-values of those products in the trade among private producers, usually expressed by money-prices, are proportional to the average amounts of human labour-time which are currently socially necessary to produce them.
The law reaches its maximum force, if there is open (free) competition not just in the circulation but also in the production of all commodity-products, i.e. if all obstacles to market-competition are removed from both production and circulation. In that case, there is nothing that regulates economic exchange except value.
Simply put, this is a general law of commodity trade, which emerges with the growth of regular commodity trade, and which evolves with respect to the form in which it is expressed, as this trade grows more sophisticated.
Thus, contrary to what some Marxists falsely suggest, this law never applies to the valuation of ALL economic goods. It is never the case, as some Marxists falsely suggest, that the law can govern "a whole capitalist society", it could at best govern only its trade in new output of reproducible labour-products (though the cost-structure of new outputs no doubt influences the exchange-values of other assets). The law can apply only to the production and circulation of new commodities, but obviously this captures only part of the total transactions of a whole society.
To the extent that human labour is eliminated from production and exchange, the law of value ceases to apply. But the law also ceases to apply, if goods are no longer allocated on the basis of exchange, or on the basis of their economic/commercial value.
Goods can be, and are, allocated on the basis of innumerable different criteria - these criteria could be legal, cultural, political, ethical etc. Bourgeois economics shows a poverty of thought and an anti-historical approach in this respect, it focuses very narrowly on allocation via market-prices and private property, even although this allocation itself would be completely impossible without all kinds of non-market activity, non-private property rights, and non-market allocation criteria. For every waged hour worked in any real economy, for example, at least one unwaged hour is worked.
So the anti-Marxist, pro-Marx socialist critique of economics is that economics operates with deformed notions about what markets are, what prices are, what economic allocation is, what the dialectics of competition and cooperation are, and how economic life functions in the real world. Because of these deformed notions, economics fails to explain very much at all about any real economy, it is shot through with "ceteris paribus" clauses, it functions more as an ideology while real economic decisions are based on understanding the total context of trade in the real world, regardless of what a theoretician might say.
From an anti-Marxist, pro-Marx perspective, Che Guevara's and Bettelheim's ideas are really a bit confused. The question is not about the law of value at all, the question is: given state control over property rights, enforced by a socialist army, how do you best allocate resources so that the needs of citizens are met? Which allocation principles and property rights do you use, for which type of output or asset? The advantage in the situation is that you can choose all kinds of allocation principles and all kinds of property rights. If market-trade works best in this respect, you use market trade, if another allocation principle works best, you use that allocation principle. The problem of economic science is then to find ways to ensure that the different possible allocation principles adequately cohere with each other, and that they are indeed efficient and beneficial with respect to meeting people's needs. You have to reconcile sensible
cost-economies with what people actually need (in this sense, Guevara acknowledged that even neoclassical economics might offer useful insights). The political problem is then one of reconciling the overall priorities of the society as a whole, with the priorities of individuals and groups so that efficient cooperation results, and the moral-legal problem is one of adequately specifying the relationship between rights and duties.
An implication of the anti-Marxist, pro-Marx critique is that you can have many different kinds of socialisms, something already made very clear by Marx himself (see e.g. Hal Draper, "The Critique of other socialisms"). Personally, I would absolutely reject many socialisms (e.g. Pol Pot socialism), and support others. The reason is that some socialisms assist human development, and others ruin it.
Many problems in socialist economics have their origin in Preobrazhensky's false opposition of planning and markets, of the law of value and socialist planning, which itself grew out of the experience of "war communism". This shaped the subsequent debates. Moreover, the bolsheviks had put about the idea, that "markets are evil", but their understanding of markets was very poor. This caused a lot of suffering for four generations of people in the soviet republics.
Jurriaan
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