[OPE-L:4214] Re: profit rate determination

andrew klima (Andrew_Kliman@msn.com)
Thu, 13 Feb 1997 22:59:56 -0800 (PST)

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I agree with Alejandro Ramos's view (ope-l 4211 and prior) that understanding
reality, and understanding how others view reality, cannot be separated. To
assert that understanding what others have said is literature review, and real
work in understanding reality begins where that leaves off, is to separate
them. It presupposes a separation between thought and reality, the very
separation against which Hegel and Marx fought. _Capital_ is, at one and the
same time, a critique of political economy as a system of categories and a
critique of the economic system to which those categories pertain, precisely
because the categories do pertain to the system. They are not just subjective
constructs. They are the system *as* apprehended by thought.

Ale writes: "If you are thinking e.g. in Andrew K., I believe --please
Andrew, correct me-- that he is claiming that Marx's draft (and theory) is
BASICALLY CONSISTENT (against people like Steedman or...Bohm) who say that
Marx's work lacks of logical coherence. Although Marx's work is a draft (and
by definition a draft cannot be 'complete') it is obvious that it could be
'consistent', so that there is no room to criticisms such as 'Vol 3.
contradicts Vol.1' or 'he fails to transform inputs' or 'it is impossible to
rigorously establish the double equality claimed by Marx'."

Yes, by definition a draft cannot be "complete," and Vols. II-IV of _Capital
are, in THIS sense, incomplete. This is obvious and innocuous, and it is not
what is meant by "incomplete" in statements such as "_Capital_ is incomplete"
or "Marx didn't complete his project" or "Marx's solution to the
transformation problem is incomplete." These statements all imply that a
THEORETICAL incompleteness exists, that this or that is incomplete IN ITS OWN
TERMS. The difference between these two meanings of "incomplete" is crucial
to recognize, because otherwise you can get hoodwinked into accepting that
evidence of one kind of incompleteness --- unrevised manuscripts --- is
evidence that the other --- theoretical incompleteness --- exists. For an
example of the difference, in the 1988 Kliman and McGlone article in C&C, we
have only a few paragraphs on the differences between Marx's concept of simple
reproduction and the concept formalized in general equilibrium, input-output
models, and we indicate that we will elaborate on this topic in a "future
paper." We haven't done so, and I doubt that we will ever do so. So in one
sense, those few paragraphs are incomplete: they are the "future paper" only
in outline. But they are not theoretically incomplete, because they are the
outline of the "future paper." In a rather similar sense, Marx many times
refers to this or that topic as one that belongs to a study of competition,
but I think it is at the very minimum not improbable that his theory of
competition was worked out when he wrote Vol. I, that he included the
important propositions in the text of that Volume and in the manuscripts for
the other three books at the points where they became relevant, and that any
study of competition would be an elaboration of what we already have.

The ideological function of statements that assert a theoretical
incompleteness is much like the ideological function of statements that assert
internal inconsistency: they provide justification not only for revising what
Marx wrote, ignoring certain things he wrote, blending them with other ideas
--- all of which is fine by me -- but also for claiming that the result is
Marx's, or an "extension" or a "development," etc.

Of course, the possibility that something in Marx is self-contradictory or
theoretically incomplete in its *own* terms cannot be ruled out a priori. To
make this perfectly clear and to make it harder for our enemies to accuse us
of dogmatism, I prefer not to say that "Marx's draft (and theory) is BASICALLY
CONSISTENT," but to say that the EVIDENCE shows that the allegations of
internal inconsistency are faulty, that they have been REFUTED, etc. (I'm
not, of course, denying the existence of all theoretical inconsistencies in
Marx: it is clear that he first adhered to the determination of value by
supply and demand, and not by labor-time, for instance.) The key points are
that (a) the consistency or inconsistency of the work is decidable in
principle; (b) it is decidable on the basis of empirical evidence; and (c)
there is no real evidence that _Capital_ is inconsistent --- all the alleged
evidence is faulty, because what is really shown is only that one or another
*interpretation* cannot comprehend the text in a consistent manner.

Now, I think the same is basically true concerning the issue of theoretical
"incompleteness." The truth-value of such claims is decidable, on the basis
of evidence, but the evidence is again faulty, in this case because the
"evidence" is obtained by begging the question (petitio principi): one
asserts what would be "complete" and shows that the text, or project, is
"incomplete" by this standard. (This begs the question because to assert what
would be "complete" is at the same time to assert what is "incomplete.") What
I've always found to be lacking is any way for the standard to be tested, so
it functions as a dogma, whatever the intentions of those who make the
assertions.

Getting back to the thread --- profit rate determination --- Ale asks what I
think is a very insightful question: "In the 60s --with a **economically**
triumphant capitalism-- Okishio Theorem sounded a very reasonable
formalization. But, how does it sound today? Now, is it 'reasonable' that an
increasing material productivity implies an increasing capitalist wealth?" I
don't think so, and lots of people out there don't think so. For instance,
when I was in New Orleans for the ASSA, my wife and I were having dinner with
some friends of hers, non-Marxists, non-economists, and they asked what my
paper was on. (It was on the TSS refutations of the Okishio theorem.) I
explained that Marx held that rising productivity leads to a falling profit
rate, which most economists, including Marxists, find difficult to accept or
even understand, and they looked at me like I'm in a profession full of
lunatics: it's obvious, they said, that when productivity rises, things
become cheaper and that reduces profitability. This is not the first time
I've gotten such a reaction. But of course all these people and Marx and
proponents of TSS suffer from false consciousness and fail to realize that the
true substance of wealth is the standard commodity or the numeraire :)

Andrew Kliman