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To: Progressive Economics <pen- From: John Vertegaal -------------------------------------------------------------------------------- Charles Brown wrote: -------------------------------------------------------------------------------- From: John Vertegaal It seems to me that Marxism would be trying to have it both ways if the self-determination of its value concept, coming into being at the moment capital goods/commodities are produced, is applied to a capitalist-run economy _in terms of its distributional unit of account_, as if this were a valid observational point of departure in static equilibrium. For in that case, when, where, how and why does a disequilibrating thrust enter the picture? My own way out of this dilemma is that the power to pre-allocate cannot determine value, as investments are worth only as much as _others_ will substantiate they are _over_ time; determinism in terms of a unit of account is futile, when output can be spurned. ^^^ CB: Isn't the disequilibrium right there in production in that the workers are also the mass of consumers ( at least of personal consumption goods and services). So, with the surplus extracted the workers don't have enough buying power or demand to buy all they produce. We know right there that all the commodities produced can't be bought, that there is overproduction relative to demand. First off, the above says nothing yet about the effective demand created by "surplus extractors"; and so it's quite premature to "know right there" anything at all. But the question at hand was the value of means of production. And as a corollary: are its values determinate in a system of accounts where a return is sought, and where the absence of pertinent returns renders all property worthless. Of course a (Marxian) labour theory of value, by definition, rules out returns due to other influences than labour; but a "definition" doesn't explain anything. As such it is like an axiom, a more or less convenient approximation as a means to resolve a wider spectrum of questions. Empirical confirmation is next; and _any_ anomalies found, prove the incompleteness of the definition. The economics literature provides numerous examples of "labour theory of value" anomalies, and I'm not going to try to repeat them all here; in any case, the decision by its adherents is either to explain them, or turn their theory into a dogma. There is no other option; and a regress into mystics is the inevitable result of having to fall back on the latter. My own main objection to a pure labour theory of value is that in _our_ economic system, there is no coherent way to deal with growth. Output per unit cost of input is naturally elastic and we cannot possibly all be rewarded piecemeal. This means that profits are imperative to growth realization, as otherwise there wouldn't be enough available income to clear the market of that growth. The point is: are those profits indeed used directly, or indirectly through the newly hired, for that purpose? This is not some new idea, Sismondi basically figured it out already some 200 years ago. Rosa Luxemburg wrestled with it for a while and concluded that according to Sismondi, growth was impossible. But it's only impossible if value is "determined" at the outset. It's a classic case of "you can't get there from here". Don't try to determine value ex ante, and everything will fall into place coherently; but if you rather go for a dogmatic explanation of our economy, or a centrally planned command one, it's your choice. John V ^^^^^^ CB: You asked "For in that case, when, where, how and why does a disequilibrating thrust enter the picture? " I was answering that the disequilibrating thrust is there in the fundamental definitions and narrative. The problem with realization , whether for growth or simple reproduction, is created right in the basic exploitation. There is a misfit between supply and demand for personal consumption goods. This message has been scanned for malware by SurfControl plc. www.surfcontrol.com _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
