Steve--Ah, I see. Your best bet for a principled neoclassical response to
the Marxian claim that profit represents unpaid labor would be in some
history of thought treatise, e.g. by Mark Blaug. However, a couple of
comments about the like ly features of such a response:
1) Neoclassicals almost certainly wouldn't deny the conclusion asserted by
the Fundamental Marxian Theorem. At Michigan, for example, I saw Ted
Bergstrom present a version of the theorem in our general equilibrium class.
2) The question thus concerns the normative significance of the result. For
example, the FMT is not at all inconsistent with the claim that profit
represents a return to productively necessary and personally costly
risk-taking, or that interest represents a return to productively necessary
and personally costly "abstention" from current consumption. One can build
models in which the market supply of new investment funds is horizontal,
such that no supplier of such funds earns economic rent, meaning that
everyone just earns their "supply price" based on marginal risk aversion or
impatient time preferences.
In such a world the sense in which profit or interest represents
_exploitation_ of labor in any substantive sense is perhaps not immediately
clear, though one can still challenge the presumption that *capitalists*
should have the right to decide on the allocation of investment funds.
Questions surrounding the latter primarily concern the issue of alienation
rather than exploitation.
3) However the case outlined in (2) is unlikely to be the typical case. In
the "intermediate" case, the market supply of new investment funds is upward
sloping (e.g., because of empirically-supported income effects on time and
risk preferences), meaning that at least infra-marginal suppliers receive
economic rents even in competitive equilibrium. Specifically, if the rising
supply price is driven solely by income effects, then rich people earn
economic rents in these markets solely because they are rich and direct
("entrepreneurs") or indirect (workers) borrowers of these funds are not.
The charge of exploitation seems more plausible in this case.
In the polar case, suggested by Roemer and emphasized by Schweickart,
differential time or risk preferences have nothing to do with the
determination of interest or profit rates, even at the margin; positive
profit or interest is guaranteed solely by the relative scarcity of capital
given class inequalities in wealth (think of demand for "capital" crossing
supply where the latter is vertical, representing absolute supply
constraints in a given period). In this setting, the charge that profit and
interest represent exploitation of workers has the strongest bite.
4) However, since neoclassicals as a whole are pugnaciously agnostic about
normative judgments of income and wealth distribution, they are unlikely to
be moved even if the polar case described above best describes current
capitalist reality
(a claim for which I think there is good evidence). Thus they would still
reject the notion that workers are being "exploited" in any coherent
*normative* sense of the term, even under the above conditions.
Gil
>Thanks Gil, Patrick and Jerry for your suggestions. It is interesting that
>with the exception of Patrick's suggestion of looking at Samuelson's famous
>claim that it doesn' matter if capital hires labor or labor hires capital
>in a GE setting, all of the suggestions were authors who are or were
>Marxists. We read Roemer's and some of van Parijs's work in my Marxian
>economics class. But what I am looking for, and my student as well, are
>thoughtful, contemporary responses by neoclassicals to the Marxian argument
>that profit represents unpaid labor, and therefore a fundamental ethical
>critique of capitalism. Nozick of course is a source as well, but he is
>not an economist.
>
>I remember Steve Resnick (who was a student of Samuelson's at MIT in the
>early 60s) telling me in grad school that Samuelson understood well the
>power of the Marxian theory of profit as a fundamental challenge to
>neoclassical "parabels" and that was in part why he was so concerned to
>write about it, and dismiss it. Let me put the question slightly
>differently: Do neoclassical economists accept the fundamental Marxian
>theorem that the rate of profit is positive iff the reate of exploitation
>is positive? If not, why not?
>
>Steve C.
>
>p.s. Jerry, I'll say a few things about the RM conference laer when I get
>a chance. Your "friend" Louis P. figures prominently there as well.
>Thanks for asking.
>
>>Hi, Steve. I'd have the grad student start with Roemer's article "Should
>>Marxists be interested in exploitation?", printed as Ch. 13 in the Cambridge
>>U Press volume ANALYTICAL MARXISM. He can go from there to Roemer's book, A
>>GENERAL THEORY OF EXPLOITATION AND CLASS, if he wants to see the technical
>>details. Gil
>>>I have a graduate student who is writing a paper that includes a section
>>>where he argues why exploitation (capitalist) is bad. He was curious, and
>>>I couldn't help him much, whether there have been relatively recent (say,
>>>post WWII) sophisticated articles written by economists who have taken on
>>>the Marxian theory of unpaid labor. In other words, he's looking for the
>>>strongest case neoclassicals or others have made against Marxist theories
>>>of exploitation, as a normative or organizing concept.
>>>
>>>Can anyone help him and myself out with references and/or arguments? Or
>>>have neoclassicals basically ignored Marxist arguments after JB Clark?
>>>
>>>Steve C.
>>>
>>>
>>>***********************************************
>>>Stephen Cullenberg office: (909) 787-5037, ext. 1573
>>>Department of Economics fax: (909) 787-5685
>>>University of California Stephen.Cullenberg@ucr.edu
>>>Riverside, CA 92521
>>>
>>>
>>>
>>>
>
>
>***********************************************
>Stephen Cullenberg office: (909) 787-5037, ext. 1573
>Department of Economics fax: (909) 787-5685
>University of California Stephen.Cullenberg@ucr.edu
>Riverside, CA 92521
>
>
>
>