From: Andrew Brown (A.Brown@LUBS.LEEDS.AC.UK)
Date: Tue Jun 06 2006 - 09:02:18 EDT
Ian, just time to briefly comment on your remarkable and important paper. I broadly agree with Paul' Cs set of comments (minus the point about socialst planning). Also agree with the thrust of Paul C and Ajit's remarks to the effect that the paper is rather more within the Sraffian tradition than what I would take to be a critical Marxian angle on that tradition (this is not a criticism rather a statement if where I stand in relation to the paper). One general issue: I'd suggest that there needs to be a discussion in your paper of the relationship between accounting procedures/propositions and theoretical propositions. It is the ommission of such a discussion that is responsible I think for the *appearance* that you are offering a very non-Marxian theory of profit (as pointd out by Ajit), which in a sense your paper revolves around. No doubt this is not intended, but without actually discussing the general issue regarding how accounting and theory propositions relate it is impossible to debate this key issue - so impossible for you to avoid giving this non-Marxian impression to the reader. Specifically: Marx, (imperfectly) followed by the Sraffian system, does indeed exclude capitalists' consumption from the inputs. You are essentially arguing that it should not be so excluded. One thing your paper does is confirm from a different angle the key point (stated by Shaikh 1984 and no doubt by others) that it is this exclusion of capitalists' consumption from inputs (Shaik's 'circuit of capital') that is responsible for the issues arising in the transformation problem. But you seem to argue that capitalists' consumption (funded by profit) should be included as an input because profit is a cost of money-capital lending. This is anathema to my understanding of Marxian theory, it is a 'surface appearance' from my perspective. Crudely put, profit is surplus labour in money form (surplus value) from which various deductions have been made, including the deduction of interest (and rent). Interest and profit need not have the same magnitude. For a given amount of surplus value, the amount of interest is crudely down to the relative power of finance capital as opposed to industrial capital - finance capital siphons off some of the surplus value generated by industrial capital. There is no general law of 'interest', nor even of 'profit', rather there is a law of surplus value. Interest, rent and profit fight over the available surplus value magnitude. No doubt profit and interest must be positive otherwise capitalists starve. Perhaps then a small proportion of capitalists consumption might be considererd a true 'input', in the same way as unproductive labour can be treated like constant capital. But this merely sets a lower limit on the magnitude of capitalist consumption, a lower limit of relatively small magnitude. Capitalist consumption should not appear as an input, on this view. To compare our respective approaches to the TP: we agree that capitalist consumption is the key. I say (with Shaikh and Paul C... and perhaps even Sraffa... ) that capitalist consupmtion goods will have, on average, close to the economy average OCC hence aggregate equalities will approximately hold despite it not being input. You say it is an input hence aggregate equalities hold exactly. Much more to be said but no time.. Many thanks Andy
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