[Ian gave me permission to send this one-to-one communication to the pen-l list as a whole.]
I wrote:>>the real-world fallacy of composition (or division) is crucial: in this context, it says that the microeconomic processes governed by prices do not correspond to the macroeconomic processes described and understood by value concepts. This contrast leads to crises, among other things.<< Ian writes:>I don't see how the failure of capitalists or their economists to understand value concepts leads to crises.< the use of value concepts allows the understanding of the capitalist system as a totality. Lacking this understanding -- and more importantly, the ability to act on this understanding -- is one aspect of the "anarchy of production," a necessary component of the existence of crises. >>I don't see Marxian (labor) values as normative, except as representing "bourgeois right" (sale at value is treated as "equal exchange" in CAPITAL).<< >How is the concept of exploitation, which seems to be the heart of the LTV, not normative? < As Cornel West's analysis of Marx's take on morality suggests, Marx applied the standards of "bourgeois right" (trading at price = value) to show that capitalist violates _its own standards_. Marx clearly had his own moral standards, but he never elaborated on them (he was never an ethicist): living in an era (not that different from our own) when people throw around moral slogans and then routinely turn around to violate them, he focused instead on the contrast between moral theory and practice. West argues that Marx gave up on the project of finding the fundamental basis for all morality. [partly because he saw efforts such as Kant's as so sterile.] >If I had tried to explain to my co-workers that the reason they were exploited was because of the LTV I would have been laughed out of my job; in that sense, to lots of workers, exploitation is like pornography. You can't quantify it but you know it when you 'feel' it. I think it's a big mistake to go the quantitative route in positing a viable theory of exploitation that workers and citizens find easily intelligible, it's precisely why I prefer a labor theory of property approach.< The Law of Value is not specifically a normative theory. The way I explain exploitation's ethical edge is by the phrase "taxation without representation." Capitalist exploitation rests on state use of force, on domination of workers' lives in the workplace and elsewhere, and on the structural coercion inherent in the reserve army of the unemployed. The role of coercion makes exploitation like taxation. Now, in theory, this exploitation could be the basis for building up civilization and the like. But workers have no say -- no representation -- in any of this. ... >... I'm all for avoiding the pitfalls of MI [methodological individualism], but I don't see how value concepts help us on that issue.< Value theory starts with the notion that we all live in a society which works as a group (though often poorly coordinated). That basic notion of interdependency is missing in MI. >Ok, but whenever I see the word cost I think of price, but since SOC means something other than price to you --feel free to correct me if I'm wrong-- I'm still stumped at how value concepts can explain market failure better than a rigorous analysis of the distribution of contracts and property rights and the accompanying politics that led to the failure. As Daniel Bromley has said 'no market failure without state failure.'< I wasn't positing value concepts as a substitute for the theory of market failure. Rather, I was pointing to similarities between the value/price distinction and the social opportunity cost/private opportunity cost distincition. >I was working from your use of the term 'free lunch' which I thought meant getting something for nothing. If the capitalists don't get something for nothing from the working class, then what is the basis for a critique of profit as a reward to ownerhsip of the MOP if we agree that ownership is not productive activity. < the capitalists get something for nothing _from_ the working class, but that doesn't mean that profits simply pop out of thin air. One _can_ get a "free lunch" by stealing it, but that's not what the phrase "no free lunch" refers to. Rather it means that _someone_ pays. Jim
