[was: Re: [PEN-L:9858] Re: Transformation problem [was US Consumer Confidence...]
Andrew Hagen wrote: > In the paper linked to above, Foley argues that the Labor Theory
of
Value can serve a similar function in political economics as Newtonian mechanics does
in
physics. (p. 23) <
I haven't read that one, but as you present it, it sounds dubious. But if he means that
such Newtonian abstractions as "hey let's think of bodies moving in a _vacuum_!" are
similar to Marx's insights (the use of abstraction to understand capitalist society),
then
Foley's right.
>There is also a discussion of whether Foley's theory is a mere redescription or more.
Although Foley means to base his concepts on Marx, I don't see how Marx could have ever
conceived of the big picture that Foley argues so well. Thus, I'd assert that Foley's
theory is original.<
So what if it's original? is there something wrong with originality? I doubt that Marx
himself wanted anyone to stop thinking and just follow his word mindlessly. He clearly
rejected dogmatism ("je ne suis pas un Marxiste"). Further, there are a lot of loose
threads in his argument (e.g., crisis theory), because he never finished writing any of
his books. So originality should be praised rather than indicating that Marx was
somehow
flawed. It's silly to get all one's ideas from a single thinker anyway. It would be
like
the scholastic followers of Aristotle who simply codified and debated his observations
rather than examining the world.
> The Foley solution is open to some criticism. The New Palgrave entry on
>"Transformation
Problem," written by E.K. Hunt and Mark Glick, for example, has a few criticisms of
Foley's theory as presented in 1982,developed simultaneously by Dumenil...<
of course there are criticisms! And there are criticisms of your point of view, too.
(and
mine!) But without indicating what they are, we can't decide if they're valid or not.
BTW, Glick has published an article (with Hans Ehrbar) in the Dumenil-Foley tradition.
I wrote:>>In addition to using Ricardo's phrase "labor theory of value" to discuss
Marx's
non-Ricardian "law of value," this is a misinterpretation. <<
> Marx's version of the LTV is better called the "law of value," I admit. It retains
>the
same grounding premise of Ricardo, though, that from labor springs value.<
What premises are these? "from labor springs value" is not enough, among other things
because you didn't define "value," which has different meaning for Ricardo and Marx.
Ricardo's vision is a labor theory of _price_, in which what are now called "unit labor
costs" determine the relative prices of products (98 percent of the time). Marx's
theory,
strictly speaking, is a labor theory of societal wealth -- and of property income under
capitalism -- and not a theory of prices at all. (Prices are part of the theory of the
distribution of wealth, not of its production.)
>It's true that Marx has a much more complex notion of value than this. In reality,
according to Marx, prices don't reflect value, except in society as a whole.<
right!
>Initially, in volume 1, Marx treated values and prices alike. Then, in what became
>volume
3, he wished to show that value and price did not proportionally reflect one another,
except at the general societal level.<
right.
>This fed into his complaint that something was awry in capitalism.<
This last point doesn't seem to follow. (I'm sure there's someone out there who agrees
with Marx's law of value while thinking capitalism is wonderful.) Marx's moral
critique of
capitalism, BTW, doesn't seem to spring from the "law of value," but instead from his
own
experience with the world, his empirical investigations, and the experiences of the
growing (at the time) working-class movements.
However, the law of value, with its emphasis on labor as opposed to mere exchange _did_
tell Marx that he should look at the "hidden domain" of production under capitalism,
the
despotism of capitalists over workers in the labor process.
>Prices seemed ordinary and real, though unstable. But according to Marx they were
>only a
thin veil that concealed a morally revolting hidden reality.<
I wouldn't say they're a _thin_ veil, since in practice, people act on the basis of
prices, not values. The alienation of capitalist commodity-producing society is real,
not
simply a matter of "false consciousness."
Marx's point is generally accepted by economists, even neoclassical ones. You can't
just
look at empirical reality if you want to understand it, so you have to look at it in a
theoretical way. Neoclassicals do this and come up with dubious concepts like the
Cobb-Douglas production function and Walras-Arrow-Debreu general equilibrium as
descriptions of the hidden reality behind empirical appearances. Marx came up with
other
results... One difference is that the neoclassicals are inveterate idealists, who tend
to
see empirical reality as an imperfect version of their models, whereas Marx tried to
abstract out the shared characteristics of empirical (material) reality, fully
conscious
of the heterogeneity of the world.
For Marx, a commodity has both a value, representing an abstract characteristic it
shares
with other commodities, and a use-value, representing the way it differs from other
commodities, the heterogenity of the mass of commodities in society. Both are part of
the
story.
>Only Marx's application of the dialectic could penetrate the veil and allow the
proletariat to see reality for what it was, and thereby to progress to class
consciousness. Thence, to revolution.<
this is crudely put, but says a lot about what Marx was saying. Marx understood the
fetishism of commodities (the illusions created by competition) and was able to get at
the
"hidden reality." Once revealed, a lot is backed up by empirical evidence. So if you
don't
like Marx's "dialectical" methodology, you don't need to use it. However,
understanding it
helps one avoid misinterpretations of what he was saying.
BTW, Levins & Lewontin's DIALECTICAL BIOLOGIST has a good discussion of what
"dialectic"
means.
>But reality is much more complicated than this supposed bait and switch [?], even the
commercial reality of price and value. I won't deny that prices often don't reflect
what a
commodity is actually worth.<
One of the central points of Marx is that the meaning of "what a commodity is actually
worth" is contested, so we can't simply talk about "worth" without some sort of
definition. What it's worth to an individual in use (its use-value) differs from what
it's
worth to individuals in commodity-producing society (its price), which in turn differs
from what it's worth to the capitalists as a class (the surplus-value associated with
it),
which in turn differs from what it's worth to the community of workers (its value). I
could go on...
of course reality is more complicated, as was Marx's theory. I think it's a "bait and
switch" to take Marx's complicated theory and then simplify the life out of it and then
turn around to criticize it for being too simple.
> But there seems to be much more going on in the capitalist economy than this naked
deception.<
"deception" makes it sound like Marx espoused a conspiracy theory of capitalism, which
isn't true. And _of course_ there's more going on. As Sweezy argued in chapter 1 of THE
THEORY OF CAPITALIST DEVELOPMENT, Marx's theory in CAPITAL is abstract whereas reality
is
concrete, so that we have be very clear what "level of abstraction" we're discussing.
Marx
was conscious of this, though he never wrote a book explaining his method: the level of
abstraction of the EIGHTEENTH BRUMAIRE is quite different from that of CAPITAL.
> The [so-called] Transformation Problem arises because Marx's math didn't add up at a
crucial point in volume 3. He didn't live to finish editing those anuscripts,
unfortunately, so one can argue that Marx had the right idea, but simply had not
expressed
himself well. To me, however the Transformation Problem is indicative of the larger
problem in Marx's law of value. <
you said this before. Again, I don't want to get into technical discussions (I think
it's
inappropriate to the list and also to the nature of e-mail). More importantly, I think
the
way that most people think about the so-called "transformation problem" is wrong. They
think about it in terms of deriving individual prices from individual values (which of
course suggests that we could derive values from prices).
Instead, a commodity has both a value and a price: one shouldn't try to derive one from
the other. Similarly, an atom of matter has both an atomic weight and a specific
number of
protons. Though these two are related (because of the limited number of neutrons that
can
be added on top of the protons), no-one tries to "derive" one from the other.
Similarly,
cats have weights and a certain number of fleas. While these may be related, in that
bigger cats may have more fleas, ceteris paribus, we shouldn't try to "derive" one from
the other, even if there were some reason to do so.
Getting back to the commodity, Engels' phrase is relevant. He refers to the
contradiction
between the socialized nature of production and the individualized nature of
appropriation
of wealth. The "value" of a commodity represents its societal characteristic, while the
price represents its individualized nature. These are not the same, though Marx did
abstract from the horizontal dimension (society vs. individual) in volume I of CAPITAL
(after chapter 3), while focusing instead on the vertical dimension of class relations.
This abstraction is embodied in his value = price assumption.
I wrote: >>Further, just because uses a single measure (e.g., the Celsius scale for
temperatures) doesn't imply "monovalency," i.e., a single-factor theory of why the
temperature is so high today.<<
> You're right. The Celsius scale measures air temperature, and is susceptible to bad
temperature approximations if placed in shade, or if there is a significant so-called
"windchill effect," etcetera.<
I'm not sure that those are "bad temperature approximations" _per se_. They're only
"bad"
in the sense of not being good guides for human action. But from other perspectives,
they
might be good.
> Celsius is not, however, a reliable determinant of such a basic thing as at what
>point
does water boil, because that varies with altitude, air pressure, and other factors in
addition to temperature. Temperature measurements are useful, but they can't be our
only
tool.<
that's what I said.
>>"Overdetermination" refers to an actual theory, usually to a theory of how history
works. Any specific institution or concrete event can be seen as the result of several
different causes, with the political and ideological "levels" playing a role along with
the economic. (I like Althusser's vision of overdetermination better than Resnick &
Wolff's, in which everything determines the character of everything else.)<<
> Overdetermination is dialectic, as far as I can tell.<
"dialectic" refers to a general way of thinking, in terms of conflicts within a
totality,
or to a theory that says that reality works like a dialectic. "Overdetermination" isn't
the same. Rather, it's saying that abstract theories should be recognized as being
abstract, so that more information is needed if we want to understand concrete,
empirical,
reality.
>I don't see why we should use overdetermination or dialectic to understand that social
system we call "capitalism," but not to understand that phenomenon of capitalism and
other
economies we call value. <
the proof of the pudding is in the eating. That is, the "why" of using dialectics or
overdetermination depends on one's goals and whether these methodological "tools" help
one
attain those goals. For me, I find the dialectical method to be quite useful, mostly
because people so often leave out important parts of an analysis, rather than trying to
understand the totality, and so end up with "one-sided" or partial understandings.
The dialectical method tells us, for example, that we can't just look at the dynamics
of
capital (as in Marx's CAPITAL) but that we have to look at the dynamics of the
working-class movement in conjunction. (That Marx was quite conscious of this
limitation
of CAPITAL is the point of Mike Lebowitz's BEYOND CAPITAL.)
> Ricardo's contribution is fallacious that the overall amount of value present in a
society, subject to distribution, is all created by labor. <
I wouldn't say that's Ricardo's theory at all.
> Ricardo uses deduction extensively. In this way he follows Hume. IMHO, Hegel
>undermined
Hume by resurrecting the contributions of those Greek philosophers who came before
Artistotle, notably Socrates. Of course that contribution was the dialectic.<
Hegel's dialectic is quite different from that of the ancient Greeks.
>The scandal of philosophy was said in the 1920s to be induction, but this is no
>scandal.
Thanks to the Hegelian dialectic we have induction available again for academic
discourse.
Without induction, I'd argue inductively, there could be no deduction. (It's late.)
It's
important to note that these were Marx's feelings about Hegel, except that Marx said
Hegel
had simultaneously uncovered, but then partially concealed the dialectic. Marx
endeavored
to fully reveal it.<
okay. To me, "dialectical method" would say that both deduction and induction should be
used.
>From an ecological viewpoint, Ricardo's observation is simply wrong that from labor
>comes
all value.<
again, you have to define what "value" is.
I can't speak for Ricardo, but for Marx, [non-human] nature is quite important. It's
crucial to use-value. On Marx and the environment, recent books by John Bellamy Foster
and
Paul Burkett are relevant.
>Unless faith holds the trump card, it is from the sun that all things in our solar
>system
come. (That object which slammed into the Earth billions of years ago, in the process
separating the early Earth into two and creating the dual planetoids, one of which
became
our Moon, the other Terra, would conceivably be a relevant exception). Perhaps this is
too
"spaced-out," but I think it's notable because much of what is valuable to humans was
not
created by us. Originally, we stayed warm and safe in natural caves, for example.
Furthermore, oxygen is released by photosynthetic organisms. Water is not created by
humans, either. From these observations, we should be able find that Ricardo's
observation
must have been incomplete or even wrong.<
If you remember Ricardo's _goal_, i.e., to develop a theory of prices (and of
distribution), his labor theory of price isn't that bad. It's probably better than the
neoclassical alternative. What you're saying is that you disagree with his goals or his
general perspective, which is a different matter. Ricardo wasn't thinking of a theory
of
"where all things come from."
> Thanks for taking my message seriously. I appreciate your criticism very much.<
you're welcome. I think that clear thinking is absolutely necessary (especially given
the
bad situation the left finds itself in), so that serious criticism at all existing
thought
is needed.
-- Jim Devine
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