Well this is in Ellman's book which you recommended earlier ("Soviet
Planning Today"). It's the difference between "economic cybernetics" and
"political economy" as set out by the Central Economic Mathematical
Institute of the USSR Academy of Sciences. The first of these is what you
learn in business school -- operations research, etc, etc and, as
Kantorovich et al proved, can in general be derived without making any
assumptions about values or preferences, as the outcome of a maximisation
problem in control engineering.
The second of these is what you have to learn to parrot in the approved
manner, or you won't be allowed into business school. It's the question of
what kind of thing goes into your model; whether you're going to assume that
wage labour is a cost to be minimised, and whether you're going to measure
your output by reference to monotonic, independent, transitive etc utility
functions.
The confusion between cybernetics and political economy (economics as
engineering and economics as politics) is responsible for a lot of problems
on both sides of (for example) the planning debate (Stalin was of the
opinion that cybernetics was intrinsically bourgeois and beleived that plans
should be made on the basis of purely political-economy considerations, with
predictably disastrous consequences), and the issues dealt with in value
theory economics are right on the cusp of the two approaches. But I
disagree with you that Marx didn't think that the LTV was basically a
statement about political economy (in the sense used above) and think that
those people are correct who believe that to confine the importance of the
LTV to technical discussions about the production and allocation of goods
under capitalism is to reduce Marx to the status of a "minor Ricardian".
cheers
dd
-----Original Message-----
From: Justin Schwartz [mailto:[EMAIL PROTECTED]]
Sent: 04 February 2002 15:11
To: [EMAIL PROTECTED]
Subject: [PEN-L:22310] Re: RE: Re: Historical Materialism
Well, you know better than I. But they don't teach marxian value theory
either, and the USSR's early attempt to use what it thought was that theory
as a planning tool was a disaster. So, anyway, maybe if Daniel was right, we
don't need a value theory at all. jks
>
> >Oskar Lange used say that Marxian economics is the economics of
>capitalism
> >and neoclassical economics is the economics of socialism. If you want to
>do
>
> >monetary and fiscal policy, design an antitrust regime, figure out the
> >impact of opening new oilfields on existing transportation options, make
>a
> >plan for your own enterprise, you use subjectivist theory. They teach it
>in
>
> >B school cause it works in short and medium term. I don't have to prove
>it:
>
> >the proof is in the practice.
>
>I don't agree with this, and I've been to business school. The
>subjectivist
>value theory of neoclassical economics is the von Neumann/Morgenstern
>axioms, and they are completely orthogonal to the economics you learn at
>business school (you learn them quite thoroughly in an economics degree,
>but
>that's not the same thing). At business school, you learn in detail the
>parts of economics which are not dependent on a value theory and are more
>properly part of what one used to call "operations research", plus you
>learn
>a bit of kiddies' (often surprisingly heterodox) macroeconomics under the
>title of "International Financial System" or some such.
>
>Think about it this way; almost the only module which is compulsory in
>every
>MBA at every business school is Marketing, and there is still, after about
>150 years of trying, no decent classical or neoclassical theory of the
>advertising industry. Subjectivist value theory is honoured much more in
>the ignoring than the observance.
>
>dd
>
>
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