From: Paul Cockshott (wpc@DCS.GLA.AC.UK)
Date: Thu Nov 22 2007 - 17:09:21 EST
Andrew Kliman has asked me to forward the following email in response to Phils posting:
Hi Phil,
I much appreciate your critiques
(http://ricardo.ecn.wfu.edu/~cottrell/OPE/archive/0711/0214.html,
http://ricardo.ecn.wfu.edu/~cottrell/OPE/archive/0711/0215.html)
of Ajit Sinha's "review" of my book
(http://ricardo.ecn.wfu.edu/~cottrell/OPE/archive/0711/0205.html).
I also much appreciated your critiques of Mohun and Veneziani's alleged
demonstration of the "Incoherence of the TSSI."
Concerning your response to this supposedly "devastating" argument of
Sinha's:
"Let us suppose that the commodity-capital worth $100 in terms of gold was
used as inputs (including wages) in time 0, which produces 100 units of X in
the beginning of period 1. Let us suppose that in period 0 the price of X
was $1.2/X. However, since the capitalists have introduced more productive
technology in period 0, the price of X falls to $1/X in the beginning of
period 1. Kliman argues that this means that capitalists in the sector X
have made zero profits. But this is simply not true. Since in period 1 the
capitalists would need only 80% of the inputs that they used in period 0 to
produce the same 100 units of X, they can continue their business as usual
at the same level and pocket $20 as profit. In his examples of continuous
technical changes, Kliman forgets that even if prices of inputs remain the
same and the price of output is falling, it does not imply that the rate of
profit must fall; because the quantity of inputs needed to produce the same
amount of output must also continuously shrink due to rise in labor
productivity."
let me mention that my book anticipates and responds to this argument
somewhat in the manner to which you respond to it (though my book refrains
from claiming that any economic theory's definitions or concepts are right
or wrong):
"the replacement-cost defense maintains that the value rate of profit is a
healthy 20%, even though the capitalist farmers actually invested a value of
150 at the start of Year 2 and the value of their output is 150 at the end.
The farmers, on the other hand, are a wee bit disappointed. They think that
they made no profit at all. Some readers may wish to explain to the farmers
that they have been taken in by a metaphysical value theory: 'You have
actually done quite well. You've ended up with 20% more corn than you
invested initially, and your potential rate of accumulation is therefore 20%
as well--you can expand your operations by up to 20%.'
"Such readers are advised to think twice. If the farmers borrowed the 150
start-up capital from their bankers, then they end up with nothing, indeed
less than nothing. They must sell off their entire corn output, and use
their sales revenue of 150 to repay the principal on the bank loans. They
have nothing left over to expand their operations. _Even in physical terms_,
they are unable to accumulate. Moreover, they have not yet paid, and cannot
pay, the interest that they owe the bankers. (fn 9) [fn 9: Nothing is
really different if the farmers are able to finance their own operations.
Their books may not show that they owe interest to themselves, but if they
continually extend zero-interest loans to themselves, they continually
forego the interest that they could acquire by investing their money capital
externally.] The same situation occurs year after year, and soon the farmers
are drowning in debt." [_Reclaiming Marx's "Capital": A Refutation of the
Myth of Inconsistency_, pp. 86-87, emphasis in original]
So Sinha's charge that "Kliman forgets" is *false*. Equally bad, if not
worse, Sinha fails to inform his readers that his supposedly "devastating"
argument has *already* been responded to, and in the very book he is
reviewing! Why?! Is this an oversight, or is it intentional? Or is it
BOTH?--is the "oversight" a result of his all-consuming intention (to trash
me, the book, the TSSI, and Marx), such that he finds what he is looking
for, and doesn't find what he isn't looking for?
Sinha also wrongly portrays this "devastating" argument as a knock-down
clincher that no one has ever answered. But it has indeed been answered
before--for instance in the Kliman and Freeman "Rejoinder to Duncan Foley
and David Laibman" (_Research in Political Economy_, vol. 18, 2000, pp.
285-93):
"Imagine that our computer firm borrowed $1000 a year ago, and used it to
buy one computer in order to produce two computers, completed today. If the
new computers are worth $500 each, the firm's net worth has increased not a
whit. (Since interest is due, its net worth has in fact declined.) Its
earnings are zero, not only in money terms, but also in real, physical,
terms: it has no resources with which to expand its production."
Sinha had a responsibility to the reading public to inform them that his
"devastating" argument was indeed answered long ago, and in the book he is
supposedly reviewing.
I don't have time at the moment to respond to some of Sinha's other
"devastating" critiques, but I cannot ignore the false and *defamatory*
charge with which he begins his "review." According to Sinha,
"the reader is told that there exists a group of 'scholars' who claim that
no such internal inconsistency exists. And therefore, according to Andrew
Kliman, the author of this book, the conclusion follows: 'The very existence
of the TSSI [a name given to the interpretation of Marx's theory of value by
this group of 'scholars'] carries with it two important consequences.
First, the allegations of inconsistency are unproved. Second, they are
implausible.' Thus the reader has been strongly forewarned of the quality
of reasoning s/he is expected to encounter in this book."
... "When I started to read this book, I thought this must be a minor slip
on the author's part. But to my great surprise, I found that this is the
general norm of his method of reasoning--he simply shows no truck with the
basic tenets of logic."
Sinha (correctly) compares the above argument--"there exists a group of
'scholars' ... and therefore ..."--to an argument that, "there exists a
group of 'scholars' who argue that ... creationism is consistent with
empirical evidence," and therefore "the claims of evolutionism are unproved
and they are implausible!"
Ha ha ha ha. Completely devastating. Kliman is quite the bombastic and
illogical buffoon. So there's no need to take seriously the claim that the
allegations of inconsistency are mythical, no need for Marx's erstwhile
critics to do the right thing by doing their part to set the record
straight, no need for reparations.
However, the premise of the above argument--"there exists a group of
'scholars' who claim that no such internal inconsistency exists"--is a
complete fabrication. It is purely Sinha's invention. It is not the actual
premise from which I drew the "consequences" that "the allegations of
inconsistency are unproved ... [and] implausible." Note that although Sinha
QUOTES almost the whole of my argument, he "PARAPHRASES" the premise. So it
*looks* like Sinha is quoting me, it *looks* like he's dealing with my
actual argument, when in fact he has subtly replaced the actual premise of
my argument with his own version--in order to make it appear that the author
"simply shows no truck with the basic tenets of logic."
Had Sinha quoted my whole argument, here is what the reader would have
found:
"An alternative interpretation developed during the last
quarter-century--the temporal single-system interpretation
(TSSI)--eliminates all of the apparent inconsistencies. The very existence
of the TSSI carries with it two important consequences. First, the
allegations of inconsistency are unproved. Second, they are implausible.
When one interpretation makes the text make sense, while others fail to do
so because they create avoidable inconsistencies within the text, it is not
plausible that the latter interpretations are correct. Thus the charges of
inconsistency, founded on these interpretations, are implausible as well."
[_Reclaiming Marx's "Capital"_, p. xiii].
So instead of arguing the logical equivalent of
"there exists a group of 'scholars' who argue that ... creationism is
consistent with empirical evidence," therefore "the claims of evolutionism
are unproved and they are implausible!"
my *actual* argument is the logical equivalent of
"creationism is consistent with the empirical evidence, and creationism
makes the empirical evidence make sense while the theory of natural
selection does not, therefore the claims of evolutionism are unproved and
they are implausible!"
(I of course do not agree with the premises of this last argument; the point
is that the logical fallacy that's present in Sinha's version of the
argument is absent from the original one.)
Was it intentional that Sinha quoted the conclusion of my argument but
"paraphrased" my premises? How could this decision have been unintentional?
The Corn Fairy made him do it? Did she threaten to take away his maximum
eigenvalue?
Was his misrepresentation of the argument's premises "unintentional"? How
can anyone unintentionally confuse "An alternative interpretation ...
eliminates all of the apparent inconsistencies" with "there exists a group
of 'scholars' who claim that no such internal inconsistency exists"?--
especially since "An alternative interpretation ... eliminates all of the
apparent inconsistencies" is the sentence that *immediately* precedes what
Sinha chose to quote.
(It is of course irrelevant to the *logical coherence* of my argument,
which is what Sinha is impugning, whether the premises are true or false.
If Sinha did not know this beforehand, he should have learned it from my
book, which emphasizes this point throughout.)
Again, I don't have time right now (it's a holiday in the U.S. and I've been
ill for 7 weeks) to respond to Sinha's other "devastating" critiques. And
I refuse to fall into the trap of responding to some of the review, because
some of it is diversionary. The book is purely about the allegations of
inconsistency, not about whether Marx's theory as interpreted by the
TSSI is correct or not, fruitful or not. But a good deal of Sinha's review
is about these latter issues and wrongly implies that my book is also
about these latter issues. As I note in the "Preface,"
"In recent years, Marx's critics have found it increasingly difficult to
defend the allegations of inconsistency against the TSSI critique. Thus
they generally try to avoid this issue altogether. Instead, they now prefer
to debate the pros and cons of Marx's work and of alternative approaches
to Marxian economic analysis. In other contexts, these are of course
important and interesting topics, but to discuss them here and now is to
fall into a diversionary trap, at the very moment when correction of the
record has become a real possibility. I will be glad to discuss these topics
with Marx's critics once the record has been set straight and they have done
their part to help set it straight. This book, however, purposely refrains
from offering a positive case for Marx's ideas or for Marxian economic
analysis informed by the TSSI. [_Reclaiming Marx's "Capital"_,
pp. xiii-xiv].
So let me just leave you with the following thought, which I originally
wrote last year in my response to Roberto Veneziani's critique of Marx and
the TSSI ("Veneziani's Critique of Marx and the TSSI," presented at 2006
AHE conference, July; emphasis in original):
"In an effort to avoid conceding that their interpretations of his theories
of value, profit and the falling rate of profit are incorrect, Marx's
Marxian and Sraffian critics again and again put forth false, baseless,
irrelevant and other diversionary critiques of the TSSI. As soon as one set
of false allegations and 'proofs' by one author is refuted, another critic
comes out with another set, etc., etc. And thus the suppression of Marx's
critique of political economy, in its original form, continues.
"There seems to be no sign that the critics have any intention of stopping
this stratagem. Indeed, they have no interest in stopping it as long as the
benefits of the stratagem outweigh the costs. And at the moment, the
stratagem carries no costs at all, because - after proponents of the TSSI
have refuted a set of false allegations - there is nothing that compels Marx
's critics to concede error, much less to set the record straight regarding
their claims of inconsistency, claims that serve suppressive functions. The
critics can (and do) put forth new false claims, and/or divert the
discussion, and/or simply remain silent and wait for the next prize-fighter
to step in the ring against Marx.
... "Why answer false and diversionary critiques one more time, if doing so
is a pointless, Sisyphean task? It takes up time and energy and wears one
out, especially because one knows that this set of false and diversionary
critiques will be followed by yet another set, or by silence - not by
forthright concessions that the critic has erred, much less a renunciation
of false allegations of internal inconsistency, much less any proactive
effort by Marx's critics to help set the record straight.
"I'm not sure that there _is_ any point to this. But if we fail to answer
the critics, observers might think that we have no answer, so that the
allegations of inconsistency might be correct after all.
"The only way to negotiate this situation, it seems to me, is to take the
offensive. The main thing that is needed is an organized campaign to
establish new rules, rules that punish people for making false and baseless
allegations, either knowingly or because of reckless disregard. In other
words, something analogous to laws against defamation is needed."
I invite all those who care about honesty and intellectual integrity to help
establish rules that punish people for making false and baseless
allegations, either knowingly or because of reckless disregard.
I'm am copying this message to Paul Cockshott, who has kindly offered to
forward it to what he calls "the ope-list," an offer I accept.
For pluralism, for justice, against defamation --
Andrew Kliman
Paul Cockshott
Dept of Computing Science
University of Glasgow
+44 141 330 3125
www.dcs.gla.ac.uk/~wpc/reports/
-----Original Message-----
From: OPE-L on behalf of Philip Dunn
Sent: Thu 22/11/2007 12:40 AM
To: OPE-L@SUS.CSUCHICO.EDU
Subject: Re: [OPE-L] book review of Kliman's book
On Tue, 2007-11-20 at 11:34 +0000, Paul Cockshott wrote:
> I am posting I review of Kliman's book to the list, that was
> sent to me by an old friend. I post it with his permission.
>
>
>
> I find it quite a devastating critique of Kliman.
>
>
>
p. 5
"Let us suppose that we are in n-good world and there is a sector X
which produces a non-basic good and does not use itself as an input. Let
us also suppose that there is continuous increase in labor productivity
in this sector; whereas in all other sectors (including gold sector) the
labor productivity remains constant. In this case the price of the
commodity X would continuously fall. Let us suppose that the
commodity-capital worth $100 in terms of gold was used as inputs
(including wages) in time 0, which produces 100 units of X in the
beginning of period 1. Let us suppose that in period 0 the price of X
was $1.2/X. However, since the capitalists have introduced more
productive technology in period 0, the price of X falls to $1/X in the
beginning of period 1. Kliman argues that this means that capitalists in
the sector X have made zero profits. But this is simply not true. Since
in period 1 the capitalists would need only 80% of the inputs that they
used in period 0 to produce the same 100 units of X, they can continue
their business as usual at the same level and pocket $20 as profit. In
his examples of continuous technical changes, Kliman forgets that even
if prices of inputs remain the same and the price of output is falling,
it does not imply that the rate of profit must fall; because the
quantity of inputs needed to produce the same amount of output must also
continuously shrink due to rise in labor productivity. If the sector X
was a basic sector, then a continuous rise in labor productivity in this
sector would have a complicated effect on all prices. Okishio (1961)
showed that in this case the prices must change in such a way that the
uniform rate of profits in the system rises. Kliman, on the other hand,
has no theory of prices. He simply takes arbitrary prices at two
different periods and concludes: Voila! 'I proved Okishio wrong!' But
Kliman has a problem, which Okishio does not. As I show in our
example above, Kliman's reasoning suggests that the capitalists in
sector X are making zero profit but still we find that they can run
their business as usual at the same level and yet pocket $20 for their
enjoyment. Where from do they get this $20?"
Magic. The $20 was part of the original capital advanced. To recover
this is not to make a profit, even if it released as cash. They can,
indeed, pocket $20 for their enjoyment but this is known as consuming
capital (unproductively).
Schoolboy howler after schoolboy howler.
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