Fred:
> According to marginal productivity theory, profit = MPK (or MRKP). Labor
> or surplus labor does not appear in this equation.
> Therefore, profit is determined in this theory independently of labor or
> surplus labor.
>
> How do you think that this theory can be reconciled with Marx's surplus
> labor theory of profit? I don't see it.
There are two questions: (1) the substance or qualitative
determination of profit and (2) the quantitative determination of
profit. What you call the "marginal productivity theory" (MPT) says
nothing about (1). MPT is only about (2).
Re. (2), ex post W = C + Y and Y = V + S are accounting identities.
They are not theories ("models") of how anything in the equations may
be determined. Ex ante, for a capitalist economy to reproduce itself
the quantities of value produced and consumed (as well as the
quantities of the concrete wealth in which such value quantities are
"embodied") must equalize. So, you can view these equations as
equilibrium conditions: pieces of some theory.
Now, for you to complete a theory of how S (gross profits, interests,
and rents) is determined, you need to specify, on the one hand, what
drives the *production* of S and, on the other hand, what drives the
*consumption* of S. MPT is just the general proposition that, under
certain abstract conditions, the return that capitalists expect from
an additional unit of means of production must equal its marginal
contribution to their top-and-bottom line, and that this equality is
enforced by "competition" -- which, understood in the terms proposed,
includes the class struggle as well. Indeed. It is a capitalist
economy and for it to reproduce itself the production and consumption
of *wealth* and the production and consumption of *capital*
(self-expanding value) must be duly balanced. Why would capitalists
with some capital to spare continue to build up their stock of means
of production if they can gain more (or lose less) by expanding
instead their labor force?
> Have you had a chance to read my papers on marginal productivity in the
> Real World Economics Review?
>
> If so, what do you think of my criticisms?
Yes, I read them both. And, with all due respect, Fred, I think they misfire.
Basically, the way I read them, your objections boil down to saying
that (1) aggregation into general categories (i.e. abstraction) is
impossible, because all real items in the universe are different, (2)
arbitrarily (abstract) "small changes" in a physical stock of means of
production are impossible, because some items are lumpy, (3) caeteris
paribus is impossible, because when one thing changes in the universe,
everything else winds up changed as a result, and (4) the simultaneous
determination of an endogenous variable is an idem per idem fallacy.
Re. (4), if you state that (a) y = 1 + 2 x, that (b) z = 4 - x and
that (c) y = z, you are not necessarily contradicting yourself. In
general, obviously, y cannot be equal to z: (a) and (b) are very
different equations. But, you can certainly find particular values of
x, y, and z such that all these equations hold just fine, i.e. x*=1
and y*=z*=3. Again, this is not in general, but in particular -- at a
"point," so to speak. So, no, you are *not* allowed to argue that
equations (a) and (b) "assume" x while the point of the theory is to
determine the particular values of x (i.e. x*) that reconcile the
system. If you do, then the logical contradiction is yours.
I addressed the other objections here:
http://juliohuato.org/2012/04/05/on-the-cambridge-capital-critique/
To sum it up: Abstraction necessarily entails -- as they say now -- a
"loss of information." Still, we need it. Cf. Marx's Capital I, 1867
German preface. I mean: we are willing to lose information (hopefully
"noise") on purpose, because in exchange we expect to gain compact
insight ("signal"). No pain, no gain.
Ultimately, societies are devices by which we humans produce and
reproduce our *selves*, our *humanity*. The relevant input and
output of these devices is our humanity, that thing whatever which
distinguishes us from the rest of nature (labor = conscious or
purposeful activity, quipped Marx). The physical stuff that bears our
humanity (and our humanity can only exist in the physical world, in
and through physical objects, our bodies, our products, etc.) is just
the material form of our humanity. We produce our humanity by means of
our humanity through our social structures. The physical world, the
rest of nature, our material products, etc. can only mean something to
us by reference to our humanity. Thus, human societies are
aggregators, by definition. We take stuff that is incredibly diverse
in its material form and "reduce" it to its human meaning, e.g.
commodity value, political power, etc. And, if we view things this
way, all these things (value, political power, etc.) appear now as
specific social forms of the productive power of our labor.
Productive of what? Of humanity! We continuously or recurrently
transform inputs into outputs, and substitute inputs for inputs and
outputs for outputs, because -- deep down -- all those diverse inputs
and inputs are (again) our very humanity under an array of cloaks.
Yes, adding apples and oranges into units of something we call fruit
and, ultimately, into units of something we call freedom or productive
power or welfare or whatever entails of necessity a "loss of
information" -- discontinuities exist. But we have done it, we do it
all the time, and we will keep doing it in spite of that. If we do
not understand this, then we do not understand the essence of "money,"
the essence of "political leadership," etc. (which, by the way, are
truly one and the same thing), and we have learned nothing important
from Marx.
Peace.
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