[odd numbers of >>> bracket Justin's writing; even numbers are for mine.]
I wrote:>>>>Marx didn't say that price is proportional to value. in volume I of CAPITAL, he _assumed_ such proportionality in order to break through the fetishism of commodities, to reveal the macro- and micro-sociology of exploitation. (Trading "at value" is a standard of "equal exchange," in some ways like an assumption of perfect competition for modern orthodox economists (MOEs).)<<<< Justin responded: >>>Maybe we are not talking the same language. I do not mean by saying that Marx holds that prices are prop, to value that commodities trade at value, just that there is a function that takes you from value to prices, and that this function is statistically true, that is--that over the long run he thinks prices will tend to fluctuate around values, moreover, that values explain price levels. Surely he believed that!<<< I riposted:>>no, Marx shows convincingly in volume III of CAPITAL that as long as (1) the rate of surplus-value is constant and uncorrelated with the OCC; (2) the OCC differs between industries; and (3) the rate of profit tends toward equality between sectors, prices gravitate toward prices of production (POPs) that differ from values.<< He now says: >I don't see an inconsistency between the claim I am making and the you you correctly attribute to Marx. Let me clarify by saying that Marx did not believe that labor values were a ladder you could kick away once you had climed them, that all you needed, once yoy understood the whole story, was prices of production; rather, value exerts a "pull" on price; in fact; there is a systematic relation between value and price that can be at least statistically speaking represented, as we would say now, by a function establishing a proportionality: P=mV, where m is some complex function that takes into account the deviations of P from V due to various disturbances.< The business of the complex function comes from Bortkewicz, who came from what is now called the "neo-Ricardian" tradition. Crucially, he assumed that the rate of surplus-value and the rate of profit were equalized between sectors, an equilibrium that's unlikely to be attained given the way capitalism continually generates endogenous shocks (Enron, etc.) This kind of functional relationship is so restricted in its real-world applicability that we should ignore it, except as a very special case. The "pull" is macrosocietal: ignoring inflation, individual participants in the capitalist system can't receive incomes (in price terms) unless someone produces products that are sold, so that total incomes (total prices, corrected to avoid double-counting) = total value. A person can get income without doing work (as every professor knows) but someone has to produce the basis for that income. Second, no individual in society can earn profits (interest, or rent) unless someone produces more than is necessary to cover his or her costs of survival. Thus total property income = total surplus-value. I wrote:>>Maybe you're thinking of Ricardo, who saw exactly this kind of result from his analysis but assumed that the value/POP correlation was "good enough for early 19th century British political economy work" (embracing what historians of economic thought call the 98% labor theory of value [i.e., of price]). For Marx, the connection between prices and values is macroeconomic in nature, with total value = total price and total surplus-value = total property income, with the macro structure of accumulation limiting and shaping the microprocesses that make up that totality.<< JKS:>Right, but there's a proportionality. I'm not saying that Marx think that each price tends to converge on its value. I don't think he thought that would make sense, though he does seem to have thought you could talk about sectoral value, not just at the level of the whole economy.< he thought you could talk about sectoral value -- at a high level of abstraction. It's a mistake to equate different levels of abstraction. Unfortunately, due to reasons that aren't entirely Marx's fault (i.e., he died before he finished), he's not as clear as he should be about the level of abstraction. >>(BTW, later on in volume III, Marx is very clear that individual participants in the capitalist system don't give a shite about values or surplus-value. They see prices, profits, interest, rent, etc., what he sees as superficial representations of value and surplus-value.<< > As Sraffa, Steedman, and Samuelson would predict. Of course this is true!< what they don't understand is that Marx saw prices (etc.) as not only the determinants of the behavior of capitalists but also that he saw them as an incomplete (partial) vision of the totality of capitalism. It's also true that individual atoms don't know the "laws" of statistical mechanics and individual electrons don't know the "laws" of quantum mechanics. Does that imply that Sraffa, Steedman, Samuelson, and you would throw out those laws? should we understand the behavior of a system by asking the participants what's going on? (That would be like studying political science _only_ by doing polls.) >>>>As for "labor creating all value," that's a matter of definition.<<<< >>>Agreed, but definitions can be better or worse.<<< >>Definitions are always part and parcel of a theory, defined relative to other parts of the theory, as with the Newtonian force equation of physics: force = mass*acceleration. Each of the terms is defined by the other two. This says that "better or worse" have to be seen in terms of the theory as a whole.<< > Yes, so? Insofar as the theory as a whole requires this notion, it's weaker. But I don't think it does.< I've answered that already: value represents an alternative heuristic, which unlike price conceptions, does not saddle the analyst with commodity fetishism (the illusions created by competition) and thus allows him or her to dig below surface appearances to get a holistic understanding of capitalism that the main heuristic (price theory) will not provide, unless it borrows it from those, like Marx, who applied value concepts. >>Good. Do you agree that Roemer attempts a shot-gun marriage between neoclassical orthodoxy and Marxian theory, one that ultimately fails?< > No. See Skillman's work.< My article in Bill Dugger's book, INEQUALITY, shows Skillman to be wrong on this. JKS: >>>In this context "value theory" is the LTV.<<< >>why is that? who sets the context?<< > Here, Marxists.< However, the critics of value theory have also set the context. One of the problems with the whole debate is that neither side seriously thought about what the purpose of value analysis was in Marx. Too many got into futile algebraic discussions centered on bizarre equilibrium models that shed no light on the nature of capitalism. The "transformation problem" literature is one of the most sterile I've seen. Dum�nil's and Foley's work got us beyond a lot of that (though Lipietz's article in JET tried to get us back to the equilibrium fold). Actually, in the context of our discussion, you asserted that Roemer didn't use any value theory. I was asserting that he did, just not a Marx-based one. If you define all "value theory" as the so-called "LTV," then you ignore other value theories, such as the subjective theory that Roemer uses. >>the long tradition of writings on the so-called "labor theory of value" (what I would call the "law of value" following Marx ... or the "labor theory of property" for clarity's sake) << JKS: > No! Gaaak! That is Locke's and Nozick's theory of property _entitlements_, a totally moral and non-explanatory notion.< Yes! Gaaak! Marx's a critic of Locke (and by implication, the late Nozick) who looks into the idea that "the turf my servant has dug" (to quote Locke) ends up being Locke's property rather than being the servant's property. Unlike Locke, Marx finds that class power implies that property owned has little or no connection with labor done. Obviously, Locke and Marx differ on lots of stuff, but it's important to remember that unlike Smith or Ricardo, and like Locke, Marx did not assume that the origin of property rights was something beyond explanation, something to simply be taken as given and for granted. Locke's explanation is very weak (to say the least), but it's the origin of a lot of Smith & Ricardo's ideas and was the ruling ideology among political economists when Marx wrote. With the "value = price" assumption of volume I, Marx is assuming that Lockean "bourgeois right" applies and then showing how it works in practice. the Marxist literature >> has contrasted the "objective theory of value" of Ricardo and Marx with the "subjective theory of value" of the neoclassicals, Austrians, etc. << > Yes, and?< let me finish my paragraph (I think in paragraphs, not sentences). But my point is that everyone who thinks about economic issues has a "theory of value," contrary to your assertion that Roemer doesn't. >> I don't really like that distinction, so I would differentiate labor theories of property(Locke, Marx) << > A desperate confusion.< why is that? I could simply reject your ideas as desperate and confused. How would that contribute to rational argument? (I paid for an argument and all I get is a contradiction!) >> from labor theories of price (Smith, Ricardo) and scarcity theories of price (the MOEs). But I think that the old tradition of seeing a "theory of value" as the philosophical/methodological "moment" or "means of analytical entry" makes a lot of sense. The MOE "theory of value" that Roemer embraces -- or embraced, since he's retreated into purely normative analysis -- is that prices _are_ values, so that only what Marx called "the surface of society" (supply, demand, non-market institutions, property rights, and the like) counts.<< > A fair cop on certaion versions of neoclassical economics, and excatly the criticism I made of Roemer's critique of Marx.< good. It's the problem with Skillman, too. >>"labor contributes some value"? what do you mean by "value"? >>I believe that for Marx, it has the following kind of meaning: since he views all societies as essentially communities of workers (and perhaps non-workers), the value of a product represents the contribution of its producer to the community as a whole, from the perspective of the community. (Price would be from the perspective of individual participants in the system.) In this perspective, labor is value, as judged from the perspective of the society (that's the "socially-necessary" part of SNALT).<< >What I mean by value is roughly this: In a nonmarket precapitalist economy, producers create and nature to some extent offers a certain quanity of physical stuff that nonproducers in large part appropriate. What they want is more stuff.< they do? then why do Kwakiutl chiefs give so much away in potlatches? If you're saying that pre-capitalist systems (and the old USSR) are concerned with use-values rather than exchange-values and surplus-values (or even their phenomenal forms), I'd agree. >In a market economy, the nonproducing bosses are not interested in the stuff somuch as in what they can get for it. On the phenomenological level, that's the price, but price is related to something deeper, since prices can diverge from what the stuff is really worth. Whatever determines what they are really worth is what I call value.< what they are "really worth" -- from what point of view? to whom are they "really worth"? >I hold a mixed objective-subjective theory, in which SNALT and demand both play a role.< Marx saw demand as playing a role in determining SNALT, as I said. >>>Who cares anymore [about AM]?<<< >>you seem to, since you rose to the defense of HISTORICAL MATERIALISM when they were attacked on methodological grounds.<< >No, you misunderstood me. I was offering and explanation. not a defense. I used AM as a shorthand. Anyway, I don't acre anymore, so you can tarsh AM and relentless reductionist to your heart's content. Just remember that by my definition, you are an AM, and by yours, I am not. Of course I do not claim to be any sort of a Marxist, so it doesn't bother me that I am not an analytical Marxist.< I didn't say you were an AM. Michael Perelman says we're not supposed to "characterize" each other. I am not an analytical Marxist, except to say that some analysis is needed to attain synthesis. I learn from _all_ schools, though the AM school doesn't have that much to offer except to give Marxists an opportunity to clarify their theory in response. I got three publications out of criticizing Roemer, maybe helping me to get tenure, but that doesn't further political economy much at all. >>BTW, I would rise to their defense in another way: I thought their issue on Brenner's NLR article had a lot of interesting articles that made some valid points.<< > That's the only kind of defense that matters.< right. Jim Devine
