Hi Jim, Thank you for your comment on this, I do aim to take your idea seriously. For Marx in Cap. Vol. 3, I think there is a difference between "property income" and surplus value, namely
- "property income" is basically "profit upon alienation" which does not correspond to the creation of net additional wealth by labour employed (it is a net redistribution of capital), and - "surplus value" is profit from the sale of new products produced by labour employed (it is a net addition to the stock of capital assets). Admitedly in first developing the concept of surplus-value, Marx himself creates possible confusions. When he first introduces the concept of surplus value in Capital Vol. 1, it is in the context of M-C-M' which suggests that surplus value means "making money from exchange", the trade profit. Only later does it become apparent, that surplus labour is the basis of the trade profit (that the profit is a surplus product). When Nobuo Okishio and Michio Morishima launched the "fundamental Marxist theorem", it was supposed to be a non-dogmatic proof that all profit originates from surplus value. But this is an error, which any businessman can refute, not just Roemer. It assumes either that an economy exists only of production, and that nothing is exchanged except new products, or it assumes that any profit realized at time T can be traced back through a circuit of transactions to a previous time T-N when it originated in production. In other words, Okishio and Morishima either ignore non-productive capital assets, or they ignore the relative autonomy of circulation from production (the modalities of the exchange process). Bortciewicz assumes, that the total price of output produced in a cycle of production or production period is equal to the labour-value of the output. To say that total prices = total values, and say, at the same time, that the difference between price and value is only quantitative, is to say that there is no qualitative difference between prices and values. In that case, why talk about values at all? The metaphysical transsubstantiation of the transformation problem is that something is at the same time equal and not equal to something else. I am aware of your explanation of Cap. Vol. 3 but I don't agree with it, that's all, I never have agreed with that sort of explanation, from the time I read Cap. Vol. 3 and studied macroeconomic statistics empirically and conceptually 1985-1990. Your interpretation is I think the result of the failure to resolve the transformation problem, with the effect that the domain of prices and the domain of values become totally separate from each other. But there exists a mass of evidence in Cap. Vol. 3 that this is completely counter to Marx's intention. Marxists have never solved these problems, because (1) they have almost never read the text properly (2) they fail to define basic concepts properly and scientifically, (3) they keep interpreting Marx's theory through the prism of alien theories, (4) they have no real knowledge of how economic life actually works. So long as the discussion revolves around what Sraffa said, or what Steedman said, nothing will be solved. Sure, you can construct models "without fixed capital" etc. but it's almost meaningless. How can you expect economists who have no real understanding of business, no understanding of the practical use of categories, and no thorough empirical grounding in the facts about economic reality, to produce good models of the economy which have genuine predictive and explanatory power? There is simply no scientific proof, either logical or empirical, that total values = total prices. It is simply assumed to be true, by definition. To test it, you would need to prove, that an observable distribution of prices is explicable only and exclusively if the identity holds, but that is logically not possible, or at any rate it is not possible unless you introduce many additional assumptions. So it remains an interpretation. Because it is in the final analysis not truly testable, however, it is a metaphysical interpretation. Metaphysical statements can be quite coherent. It is just that they are not testable or falsifiable, that is all. The accounting definitions used in national accounts to group observations are also metaphysical. This logical truth alone is sufficient to destroy the scientificity of the "static and equilibrium" interpretation of Marx's theory in Cap. Vol. 3. Marx's real purpose of introducing price-value deviations, instead of assuming standard supply prices, in Cap. Vol. 3, is to explain the dynamics of competition propelling the production system forward vis-a-vis the constraints of labour requirements - through the clash between the production requirements and the trade requirements for the accumulation of capital. In Marx's theory, markets do not create economic equilibrium, that is a category mistake. When Ricardo ran into his "numeraire" problem, because he could not reconcile capital returns with labour expenditures, this did not just make his theory "inconsistent". The Ricardian inconsistency signified a theoretical fault in the whole way in which the accumulation of capital from production was being viewed. We have textual proof that Marx already recognized this in 1844. What Marx actually does, is "reframe" the whole issue. This means, that the whole classical portrayal of the "natural equilibrium prices" is overturned. We will fail to understand the meaning of Marx's reframe, however, so long as we believe Marx was merely making Ricardo's theory more consistent. What Marx is saying is, that Ricardo cannot reconcile his theory of price with his theory of value, precisely because Ricardo is unable to frame economic relations and economic causation properly. The root of that problem is, that Ricardo cannot theorize the difference between simple commodity production and capitalist commodity production, between simple exchange and capitalist exchange. For the theory of capitalist dynamics, - scientifically it does not matter, if total values does not equal total prices. - the identity is strictly only a methodological assumption. It says that people will ordinarily not trade goods or services far above or below what they are worth, among other things because they cannot afford to do so. As I have mentioned in my wikipedia article on the law of value, Marx himself very explicitly stated, that the identity cannot hold in reality, because of continual changes in productivity, and Engels also denied it explicitly, saying that it was merely an "idealization" intended to demonstrate the main economic forces involved. It will probably take a few more decades before the problems of Marx's theory are solved. The reason is that the New Left authorities, who put everybody on the wrong track, just like the Marxist-Leninists before them, have to die out first. The Stalin/Mao chatter, Sraffa chatter and Althusser chatter has to die out first. As long as that chatter continues, no progress will be made. Jurriaan _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
