What follows are my thoughts on how we should proceed.
The basic idea is that we start with value and see where
that takes us. In so doing, we may want to consider its
treatment as Marx developed it from 1857 till 1883.
What follows is my way of convincing myself that that
is "What is to done."
1. Within the field of Marxian economics, two problems are often
discussed.
a. The transformation of values into prices of prod-
uction.
b. The falling rate of profit.
Until serious attention was given to the Okishio theorem, the
two seemed unrelated. That is, the arguments over the falling
rate of profit between, say, Sweezy and Cogoy focuses primarily
on the manner in which the capital-output ratio changes in
modern capitalism. Ira Gerstein's piece on transformation which
Steedman criticizes does not discuss accumulation. Indeed, as
I began reading the literature, there seemed little point to the
transformation problem debates and a great deal of significance
in the FRP arguments as the FRP was seen to be the primary cause
of crisis in CAPITAL.
2. As I read Marx's work a bit more closely, I began to see
problems with Cogoy's notion that the capital-output ratio
must rise for there to be a fall in the rate of profit.
Indeed, there were two major difficulties:
a. In CAPITAL and the so-called CAPITAL MANUSCRIPTS, Marx
himself often argues for a falling capital-output ratio.
b. My own experience as I left teaching and began
to get into the mailing industry provided me with
numerous examples of outputs seemingly increasing
faster than inputs. To be sure, I realized that I was
often looking at outputs in physical terms and inputs
in terms of prices.
3. For me, Shaikh's 1978 criticism of Dobb was an eye-opener.
Shaikh took on a task that Dobb avoided by attempting to
show a falling rate of profit as real wages were held
constant or, in other words, he tried to show Okishio's
theorem to be an inadequate critique of Marx. By
distinguishing the profit rate and profit margin, Shaikh
brought fixed capital into the argument. Like many others,
however, I could not agree with Shaikh that capitalists
knowingly invest in techniques that bring about lower
returns as they attempt to increase profit margins. At the
same time, I did agree with Shaikh that Dobb's notion of
the falling rate of profit was not in agreement with Marx.
4. Noting that both Dobb and Shaikh used a similar concept of
value -- one in which the values of inputs and outputs are
simultaneously determined -- I began messing around with
historic valuation. After some thought, I wrote, " "
in the early 80's. The piece had its good points and,
unfortunately, its bad points.
5. Good points.
a. A great deal of importance was given the to
the concept of value in that the accumulation
process was viewed both from the material
side and the value side. In that the two did
not coincide, consideration of both seemed
necessary. Hence, Steedman's idea of the
redundant nature of value was now foreign to me.
b. By using a Grossmann-like scheme for describing
the value side of accoumulation, the necessity of
crisis was built into the model.
c. Given that as the value rate of profit falls, the
"visible" rate of profit rises, I could see the
danger in testing Marx's law empirically.
6. Bad Points.
a. I used a one commodity, circulating capital model.
This, in turn, made it difficult to relate "price"
and "value." Today, I think I could have used the
Marxian concepts of individual value and social value.
b. By ignoring fixed capital, the model seems highly
unrealistic. That is, the productivity increases
appear abnormally large.
c. Like Grossmann, I never related the crisis itself to
the turnover of fixed capital.
d. The transformation of values into prices of production
and the development of market values and prices are
absent.
e. Given a crisis within a one commodity model, one cannot
see the possiblity of a fall in the rate of profit in
terms of what I called "value."
7. The task ahead. For me, that seems simple; develop a model
that does away with what I call the "bad points." Why this
group? First, I think it will take seriously the notion of
historic valuation. Indeed, others on our list have written
more extensively than I on the concept, ie. Kliman, Freeman.
Second, the relation between historic and simultaneous
valuation needs to be developed. I cannot think of a better
place to do it than one in which many might see little to
be gained in introducing idea of historic values. Third,
there are few places where Marx's idea of relating the
periodicity of crises to the turnover of fixed capital is
taken seriously. Within the group, at least one participant
has given it some thought.( See Perelman's 1987 book.)
John Ernst