Jurriaan Bendien wrote:
>... Most of the people who currently claim consistency with Marx – the TSSI
> crowd, the far-left Grossman devotees, the International Socialists and HM
> devotees, and various wellknown academics ... – argue for a
> falling rate of profit theory. The most orthodox position is, that as the
> organic composition rises, the profit rate falls and that this is the root
> cause of the crisis. ...
As I said, just because some people claim to be "orthodox" does not
mean that they actually orthodox. As I said, 100 years ago, the
self-proclaimed orthodoxy was "disproportionality" theory, a view that
almost everyone sees as trivial. The whole idea of "orthodox Marxism,"
of course goes against the Marx's view that his ideas would help
promote the collective self-liberation of the working class.
Because it specializes in mystification, "bourgeois" theory is the
appropriate realm for orthodoxy, as with the take-over of
macroeconomics by DSGE [dynamic stochastic general equilibrium] and
the theory of the "great moderation," which meant that the mainstream
macrotheorists were totally unprepared for 2008.
> It might be, in the Aristotelian best presentation of the argument, that you
> can prove, despite inaccurate data and despite the problems with the
> concepts underlying the data, that the industrial average rate of profit
> does indeed have a general tendency to fall, at least in the long term....
I don't get this. Why is this relevant? I was not arguing that the
rate of profit always suffers from an irreversible tendency to fall.
Does anyone who is active on pen-l argue for this theory? (Shane
Mage?) In any event, there is no logically-coherent theory that proves
that there exists an irreversible tendency for the rate of profit to
fall.
And when doing theory ("the Aristotelian best presentation of the
argument"), the accuracy of the empirical data is irrelevant. There's
a difference between the world of theory (and abstraction) and the
concrete world of the reality outside our minds. That means that it's
possible (for example) for the Keynesian theory of aggregate
expenditure (an abstraction) to work pretty well _despite_ the fact
that the national income and product accounts are imperfect. That
theory worked well even before the NIPA were invented.
> ... we could ask ourselves, how could it possibly be the case, that a
> drop of a few percent in the industrial profit rate across several years,
> can cause a huge slump, when the actual total capital invested in industrial
> means of production is only a smallish minor part of the total social
> capital?
have you heard of multiplier effects? accelerator effects? have you
heard that (compared to other individual economies) the US economy has
a disproportionate effect on the world economy?
> Personally, I just don’t believe very much anymore about the economic data,
> because I used to work as research statistician together with other people
> who produce this data. At the best, the data can provide a rough indication
> of whether the trend is up or down, during a few years. Long time series are
> suspect, because so much changes qualitatively, even within the space of a
> decade. Moreover national accounts are prone to repeated retrospective
> revisions which introduce new data distortions.
This is hardly a new point.
> As regards the Marxist reworking of the data, the distinction between
> productive and unproductive labour has to my knowledge never been
> convincingly defended.
The concept makes total sense to me. However, I don't see its
relevance to crisis theory. Specifically, I see no reason to include
the wages of "unproductive" labor as part of surplus-value. In fact,
since it the measure that is most likely to affect capitalist
behavior, a "bourgeois" measure of the rate of profit (which includes
the wages of unproductive labor as part of costs) is most relevant to
understanding capitalist dynamics.
> What the FROPists actually do, when they are confronted with empirical and
> logical objections, is that they just change their storyline a bit. They
> still believe the FROP is true, but then “at a different level of
> abstraction”. For example, they say that the FROP doesn’t “immediately”
> cause the crisis, but only “in the long term”. But they provide no testable
> relationships of cause and effect.
All serious economists, whether "bourgeois" or not, use the concept of
levels of abstraction, along with ideas of the short run versus the
long run. Without such concepts, we are mired in crude empiricism.
--
Jim Devine / "Reality is that which, when you stop believing in it,
doesn't go away." -- Philip K. Dick
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