O Connor Fiscal Crisis of the State
I had forgotten about James O' Connor's classic Fiscal Crisis of the State. Max Sawicky was writing a review of it. Max, do you write the review? May we read it? yours, r
Re: the Clinton years
Given, then, the specifically bourgeois form of the state--and I admit to being hardly clear as to what these structural limits on real democracy are, but this is what I would like to investigate--perhaps we should not be surprised by both (a) the limits on state stabilization policy and its increasingly class biased form (predicted by Mattick Sr, Mario Cogoy, Joachim Hirsch) Ernest Mandel actually published on this as well, in fact I translated a fairly comprehensive article of his called Methodological issues in defining the class nature of the bourgeois state (written for a festschrift for Leo Kofler) which never got published however. Jurriaan, I would like to read it. There is a chapter on the state in Late Capitalism, if I remember correctly. This would have been written after that? Mandel's argument is that the state derivation school which seeks to infer state functions and forms from the logic of capital is ahistorical, and do not probe the historical origins of the bourgeois state, nor the dialectics of free wage labour. Bob Fine has some interesting discussion of the functionalism of Marxist state theory. Another important text is that of Reuten Williams, although I do not agree with some of the value-form arguments. yes I have wanted to get a copy of this apparently important book. and (b) Shaikh and Tonak's very important finding that the welfare state never redistributed income downward even in the so called Golden Age, working class taxes may have exceeded transfers even before 'social democracy' was blamed for stagflation, and the regressive nature of the so called welfare state has only since worsened with relative cuts in social expenditures and regressive increases in the payroll and sales tax paying for tax breaks not even for investment The experience in this regard is different in different countries, depending on the balance of class power. how different? that's what I would like to know. Which is not to say that since the state is always a class state that the working class need not be bothered by its principles of organization. A police state is very much a worse institution for the working class than a representative democracy. Ultra left criticism that cannot see the real danger posed by Ashcroft is delusional. The terrain of extra electoral activity has to be preserved, especially for collective worker action. Agreed. I wrote a bit about taxation recently. Maybe the orthodox Marxist would froth at the mouth at this, but the orthodox Marxist never thinks about how socialist economy is actually organised, typically he just anticipates the breakup of capitalism as the moment of asserting his power over the working class. At the root of your statement is a misconceptualisation of reformism and revolutionism. ok. What I would like to consult again is Perry Anderson's exploration of the nature of representative democracy in his essay on the antinomies of Gramsci. Perhaps it's time to return to the debates over state theory, surveyed in Martin Carnoy's and Bob Jessop's now twenty year old books? My bias is that we should sort out the issues which Marx does not sort out, principally taxation, public finance, monetary manipulations including credit, that would be the main ones. Yes public finance. Why do Asian Central Banks continue to hold US govt debt now that the devaluation has already cost them $200 bn? Must they support the dollar given export orientation? Rakesh Jurriaan
Re: the Clinton years
Hi Rakesh, Jurriaan, I would like to read it. There is a chapter on the state in Late Capitalism, if I remember correctly. This would have been written after that? Yes. Mandel was influenced considerably by Leo Kofler (1907-1995), who was a German social philosopher/historian from Cologne. Kofler became politically active as socialist when he was twenty and in the 1930s operated on the leftwing of German social democracy, working with Max Adler. Now that is someone (Adler) who very much interests me. I found quite helpful Leszek Kolakowski's summary of his work (especially Adler's rethinking of the Kantian problem of transcendental subjectivity in light of a socialized and historically evolving humanity quite promising). Some of Adler's work was translated in Austro Marxism, ed. Bottomore and Goode. I have wanted to study the debate on state theory between Hans Kelsen and Max Adler in the 1920s, but I read German slowly at this point. Lúkacs and Trotsky seem to have despised Adler, but there seem to have been very sharp divisions with Austrian social democracy--Adler on the left, Bauer and Hilferding in the middle, and Renner on the right. While quite a bit has been written in English about Austrian social democracy between the wars, there seems to be nothing about the Adler-Kelsen debate which from what I was able to make out was conducted at a very high level. Adler also had great influence on Lucien Goldman. During the war he was in Switzerland and studied Lukacs. In 1947 he became professor in East Germany I think, but after a while fell out with the Socialist Unity Party who called him a Trotskyist which he wasn't. He published Zur Geschichte der bürgerlichen Gesellschaft (later revised) in 1948, and Geschichte und Dialektik in 1955. In 1950 he left with his wife Ursula to live in Cologne. In 1960 he published a sociological analysis of late capitalism called Staat, Gesellschaft und Elite zwischen Humanismus und Nihilismus. After that he became very interested in Marxist ethics, aesthetics and anthropology, and published a large amount of innovative books. Not much of it has been translated though. Mandel associated with many of these people, they were Marxists of some sort but neither in the CP or in the SDP, or at best on the fringes of it. thank you for having taken the time to write this up. Kofler seems very interesting indeed. Was Kofler's anthropological interest motivated by the desire to critique Gehlen? Bob Fine has some interesting discussion of the functionalism of Marxist state theory. Agreed. But my own preferred procedure in these matters is normally different from the Marxists and closer to Marx, because I prefer to study the facts and history first with a theoretical orientation, and then utilise detailed theory to explain it, or illuminate it, and establish a relationship between theory and evidence. The bad habit of Althusserian theoreticism and postmodernism is to spin theory out of nothing, they don't do much empirical or historical research. Fine is a political theorist, interested in the problems that Marx inherited from classical liberalism. Once reading his book, I had a better appreciation of the work done by Ahmet and others as well as why they had decided to research empirically certain questions. As regards Reuten's book, it is actually worth reading, it contains important ideas, particularly if you want to continue Marx's own project with the same sort of method and are interested in Hegel. A Dutch CP Marxist called Siep Stuurman wrote a good book on the state, very comprehensive in its review of the literature, but not translated. I think lateron he gave up on Marx and became some sort of liberal. how different? that's what I would like to know. I will try to think of sources, it's a long time ago now that I studied this. In the case of New Zealand, the situation changed over time. Initially, workers did get more or less what they paid in, but later it was more like the situation Shaikh Tonak describe. Initially workers would not pay income tax, only possibly some property tax, rates and so on. In settler colonies, social insurance provisions or social funds for the first wave of immigrant workers did not exist, and the state had to provide them, that is why around the 1890s for example people were talking about State Socialism in New Zealand, welfare provisions were provided by the state because there was no other way. The Webbs even went to New Zealand to investigate State Socialism there (there is also a book about it by William Pember Reeves). With social insurance-type funds you cannot really evaluate the exchange made other than over a long period of time. Very few Marxists outside of actually existing socialisms ever investigated public finance beyond a few main aggregates, but this is peculiar, because if you look at the history of it, one of the main reasons why bourgeois revolutions actually happened was to gain control over taxation, which
Re: value and gender: dirty deeds done dirt cheap ?
Title: Re: [PEN-L] value and gender: dirty deeds done dirt ch Jim notes the differential rate of exploitation divides and conquers the working class (either domestically or internationally or both) and all else equal, raises the over-all rate of exploitation. Similarly, the weaker the working class in terms of organization and consciousness, the less able to fight differential exploitation. Putting these together, we get a vicious circle. It seems like we're in that vicious circle nowadays. In terms of this theory the costs to discriminating have to to be less than the costs that would result from non discrimination if racial inequality is persistent. If the workplace is organized around an arbitrary group based hierarchy, then the rival groups of workers may be willing to rat members of the other group out for slacking. Without that hierarchy then workers may collectively organize and thereby reduce the average rate of exploitation so that the capitalist is left with less surplus value than he had foregone by agreeing to pay 'whites' uncompetitive wages. The members of the dominant group may think that they have benefitted from discrimination but they have simply taken the bait (as Doug knows, Patrick Mason has contested this idea as developed by Michael Reich, and I don't think pen-l has ever discussed the Reich-Botwinick/Mason-Robt Cherry debate). So discrimination is rational not for workers but for the employing class in terms of the management of an exploited workforce, and employers are likely to find ways of maintaining abitrary gender or racial or national origins hierarchy in the workplace even if they do not recognize that this is what they are doing. A divided workforce has simply evolved as the instutitional answer to the problem of the stabilization of exploitation. One could argue that such an institution has been less contested in the US with its workforce being made up large easily physically distinguishable groups which as a result of racism are likely to fetishize those superficial physical differences and maintain race group based identities rather than class ones. Again (as I have been concerned for years) the focus is not on the limits on the capitalist state and deterministic capitalist laws of motion but on the cultural and political reasons why the rate of exploitation is unusually high in the US which also suffers from a lack of those redistributive and training programs that a united working class would have fought for. Given Gramsci's critique of mechanical Marxism and his theorization of culture and hegemony--very well explored indeed by Joseph Femia--he became the hot figure in academic life, and the revolt against Capital was complete, though Gramsci's revolutionism was also eclipsed in the course of his appropriation by everyone from Genovese to Walzer to Keohane. The idea that the United States was a singularly unequal or exploitative or inhumane advanced industrial country due to continued racial problems--that racism was the secret to why there was no socialism in the US--was more persuasive before the trends towards inequality, cuts in social expenditure, high unemployment and labor bashing (from the defeat of the British miners to IG Metall today) proved to be operative elsewhere, even in the Scandanavian corporatist societies that were once a model for a left that wanted to think beyond race to human need and equality. Rakesh
Re: the Clinton years
Interesting that while Noam Chomsky is understood to be (or understands himself as) an anarchist or anarcho-syndicalist, he seems to support Robert Pollin's and Robin Hahnel's attempts to specify the essence of the rational state in terms of which the actual state is then criticized as corrupted by private interests. Given that Chomsky and Hahnel represent the far left of the American political spectrum, it just goes to show how little impact Marxian theory has had in the United States (Chomsky's anti Marxism, often peppered with quotes from Bakunin, is well known, but it has not lead him in an anarchist direction but rather into a fetishism of the state). The American left (including its vanguard publications such as Z magazine and Dollars and Sense) has never ventured in theory much beyond left Hegelianism or left Keynesianism (of course the Nation is willing to tilt in the favor of even New Keynesianism or the almost incomprehensible mismatch of reformism advocated by Greider). There are exceptions, to be sure: Paul Mattick, Sr. (limits to the mixed economy), my former teacher Paul Thomas (alien politics), and Hal Draper (KMTR, vol 1). All these theorists are interested not only in how the state arose through the execution of its main function of enforing equal rights between capital and wage labor into a new form of legal authority, a public power alienated from the people, an independent force distinct from society which acquires its own institutions and its own personnel (Robert Fine, p. 117); they are also concerned with the limits on real democracy that arise concomittantly with the state out of the enforcement of this main function (Poulantzas focused on how equal right before the law materially and coercively individualized the masses and thereby undermined class organization, creating the grounds for their regroupment as a people nation). Given, then, the specifically bourgeois form of the state--and I admit to being hardly clear as to what these structural limits on real democracy are, but this is what I would like to investigate--perhaps we should not be surprised by both (a) the limits on state stabilization policy and its increasingly class biased form (predicted by Mattick Sr, Mario Cogoy, Joachim Hirsch) and (b) Shaikh and Tonak's very important finding that the welfare state never redistributed income downward even in the so called Golden Age, working class taxes may have exceeded transfers even before 'social democracy' was blamed for stagflation, and the regressive nature of the so called welfare state has only since worsened with relative cuts in social expenditures and regressive increases in the payroll and sales tax paying for tax breaks not even for investment (as recommended by Paul O'Neill who was run out of town) but for the consumption of the rich (Bob Jessop refers to transition from Keynesian welfare state to Schumpeterian workfare state). I would imagine that for Shaikh and Tonak that this would not be evidence of the corruption of the state by private interest but rather (in a Marxian vein) evidence of the corruption of the state, given its form in a bourgeois society. But I do not think their findings are supplemented by an actual theory of the nature of the state. Which is not to say that since the state is always a class state that the working class need not be bothered by its principles of organization. A police state is very much a worse institution for the working class than a representative democracy. Ultra left criticism that cannot see the real danger posed by Ashcroft is delusional. The terrain of extra electoral activity has to be preserved, especially for collective worker action. Even Monthly Review's skepticism about whether the rational state (a state which could mediate the conflicts of civil society in an economically and normatively rational fashion) would ever become actual was based on skepticism that the state could ever achieve sufficient substantive autonomy from civil society to realize its rational essence, but there was no abandonment of the ideal of the rational state in theory. Magdoff seems to have been an exeption here to the Kalecki-inspired theses advanced by Paul Sweezy and John B. Foster. Perhaps it's time to return to the debates over state theory, surveyed in Martin Carnoy's and Bob Jessop's now twenty year old books? Rakesh
Re: the Clinton years and Social Wage
Ahmet, please don't mind my saying that while these findings are indeed presented in your co-written book, that book is difficult reading for the non economist. And it seems to me that your dissertation with even more explicit discussion of state theory in light of your very important empirical findings should be published with a diverse body of social scientists in mind (political scientists, sociologists, economists). We would then have an American contribution to the historical materialist theory of the state that rivals those of Miliband, Poulantzas, Hirsch and others of the capital logic school. I wonder where Erik Olin Wright's thinking is on these matters these days. the standard of living of workers is mostly shaped by labor-capital relations rather than labor-state, at least in the case of the US. The following last paragraph of our article says this clearly. If this is not only the case in the US, then we couldn't speak of the limits of the capitalist state. For example, many would argue that it is cross-national variation in the structure of race relations, which determines the manner and degree to which the relatively universal processes of technological change and globalization have affected the variations across the OECD in long-term trends in the distribution of income. That is, it is claimed that America's especially acute racial crisis explains why, while skill intensive technological change and globalization are relatively invariant across countries, the US suffers extreme income inequality which trade unions and the state could have otherwise reduced. The claim here is, more specifically, political: capital has been able to wean especially the white male working class from welfarism and labourism by manipulating its racialized resentments against affirmative action, crime and welfare. We have not here a theory of the limits of the capitalist state but rather a politico-cultural explanation for limits on income inequality attenuating policy in the US alone. Martin Carnoy seems to have moved in this direction. Yours, Rakesh
Re: the Clinton years and Social Wage
oops I meant to write If this the case ONLY in the US, then we couldn't speak of the limits of the capitalist state.
Re: the Clinton years
Gil, thanks for the well informed post. You raise the level of discussion. I suspect this assessment is myopic at best, and largely beside the point when it comes to comparing the Clinton and Bush II regimes. In the US, the trend toward greater wealth and income inequality began in the 1970s and continued full-steam through the Reagan and Bush I years, so Clinton inherited a tendency that was already built into the economy. how and what exactly was built into the economy? Are you referring to the general law of accumulation as being built into the economy? A significant portion of the increase in wealth inequality under Clinton was due to the stock market bubble, reflective in part of a robust economy that kept unemployment low, and since burst. What contribution did the absence of accounting regulation play in that boom? And I'm not sure what Pollin expected Clinton, or any one President for that matter, to do about the widening chasm between the richest and poorest 1% or 10% of humanity--insist that the UN adopt a progressive global income tax? Force the Gingrich Congress to increase US foreign aid to poor countries a thousand fold? Did he try? Also, what could Clinton have done to reverse the rising (pre-tax) ratio of CEO to average worker pay, and how much of a difference could it have made? Bargain for more regressive income and capital gains taxes with promises of tax incentives for investment and R and D? Domestically, Clinton did manage to get through a tax increase on the wealthy and a tax decrease for the middle class. But didn't he also substantially reduce capital gains taxes? On the other hand, to his eternal discredit, he went along with eliminating welfare as we know it without extracting from the Republicans, who were desperate to gut the welfare system, significant concessions for workers, like increased support for education, training, child support, etc., in return. right. Clinton, in other words, was a disappointment, and certainly not a leftist. Duh. But Bush II is an unmitigated, across-the-board disaster, and I think that those who insist there is no real difference between Clinton and Bush II are missing a key point. You think wealth inequality increased under Clinton? Clinton didn't call for eliminating the inheritance tax and dividends tax or for dramatic decreases in income tax rates on the wealthy. and what did the Democrats in Congress do to oppose it? Bush did, and got them with a sunset clause only as a political accounting shenanigan, and is now calling to make these tax decreases permanent. These regressive changes will surely lock in and further expand existing wealth inequalities. ok but if you say wealth inequality is built into the economy in such a way that Clinton cannot be blamed much for its accentuation, then why blame Bush much for its accentuation. Why not just say that state can at best moderate the general tendency towards greater intra and international inequality in income and wealth? Bush may not be moderating it while Clinton would have to some extent. Then ask about the limits of the state to do more than that. Also, the resulting massive structural deficit in the Federal budget will eventually render Medicare and Social Security infeasible; these programs would not have been seriously threatened under Clinton's budget management. It depends on how deep the dowturn turns out to be. A prolonged recession could have rendered infeasible these social expenditures. There is no reason to believe that Clinton would not have responded to a prolonged downturn with profit-led demand management; that is, increasing the costs of withholding from investment through regressive tax and anti labor legislation. And that is, of course only the beginning. Clinton favored signing the Kyoto protocol on global warming. Bush refused to sign it after saying that he would, and his administration has since censored reports on the issue by its own agencies in order to avoid dealing with it. The Clinton EPA actively pursued litigation against corporate polluters. The Bush EPA abandons much of this effort, raises nonenforcement to standard practice, leading several career EPA administrators to resign in protest, and introduces rule changes to let polluters off the hook re installing new pollution control equipment. Clinton didn't do much to reduce global income inequality? Bush shuts off medical and other aid for the poorest women in the world on the pretext of opposing abortion. Deplorable. Speaking of abortion, Bush has actively abetted the right's efforts to restrict abortion rights, while Clinton supported and defended these rights. Deplorable. And I haven't even mentioned the unfolding nightmares in Iraq and Afghanistan, Ashcroft's various incursions against personal freedoms, Frightening. But the roots are there in the first Patriot Act. the Bush administration's opposition to affirmative actionthe list goes on.
Re: the Clinton years
Oh darn I get annoyed when others submit corrections to their posts. And now I'll have done it twice in a day. Shouldn't send things off immediately. Since the discussion is serious and important, I should treat these emails as attempts at communication rather than private notes. I obviously meant PROGRESSIVE Even as a business Keynesian Clinton could have bargained for more PROGRESSIVE income and capital gains taxes with promises of tax incentives for investment and R and D. RB
Re: the Clinton years
Julio: At this juncture, you have an administration whose policies, domestic and foreign, are exactly what the left is supposed to be against. Yet, Cockburn is busy criticizing Bill Clinton and Paul Krugman! Well, who else is supposed to criticize the Democrats? Salon.com? The Nation Magazine? Bill Moyers? Clinton, well, he's pretty much flying under the radar nowadays. But Krugman is the leading voice in the mainstream media against Bush's current policies. I think that the point of Counterpunch (and PEN-L) is to address the necessity of transforming the system. We are facing a downward spiral in bourgeois politics that has been going on for decades. Richard Nixon's domestic policies were far more liberal than either Clinton's or Dean's. Relying on Robert Pollin, Cockburn seems interested in the criticism of Clinton's fiscal policy, not the system. That is, Cockburn seems focused on the fact that the neo liberal Clinton's fiscal policy was contractionary. Budget surpluses were realized mostly through compressing the rise in social expenditures in relation to the rise in GDP (Greenspan rewarded Clinton with low interest rates which however seemed more than anything to fuel the bubble economy, which shows the dangers of monetary policy as principal neo liberal tool of stimulus). Now I think we can assume that Pollin is not touting Bush's fiscal policy even though it is not contractionary (and the Randian Greenspan has accomodated these deficits). I would imagine that Pollin would have wanted the tax cuts come on the payroll side and the deficit expenditures to be socially directed rather than militarily oriented. This kind of short term stimulus would have given us stronger and more sustainable recovery on the employment side. That is, from the way Cockburn summarizes Pollin there seems to be an ideal of a rational state, a social democratic one that provides a deep stimulus in downturns and raises taxes a wee bit in a progressive manner in the upturn to keep government debt sustainable and pressure on long term interest rates contained. The assumption would be that through left wing Keynesian management the economy could be set on a path of a output growth with price stability and 'acceptable' levels of income inequality. (Prabhat Patnaik argues against the ability of any kind of Keynesianism to guarantee accumulation and stability without the external props provided by imperialism--this is closer to the structural kind of criticism that you are looking for Louis, and it is conducted as an immanent critique in the sense that its theoretical base is Keyensian.) In short, Cockburn's underlying criticism seems hardly structural; it seems to retain state fetishism. Rakesh
Re: the Clinton years
Title: Re: [PEN-L] the Clinton years Rakesh Bhandari wrote: In short, Cockburn's underlying criticism seems hardly structural; it seems to retain state fetishism. It's not at all structural because he wants to annoy liberal Nation readers. It doesn't seem like the most urgent political task of the moment to me, but I'm getting soft in my old age I guess. Doug Both Pollin and Krugman would obviously criticize Bush's actual state, but (going from Cockburn's summary) Pollin would criticize even Clinton apologist Krugman's ideal new Keynesian state from the perspective of his left Keynesian rational state (rational in that it would not only ensure output growth with price stability but also maintain a normatively sound level of income inequality). As Cockburn implies, Pollin wants to give a much more social democratic content to the rational state than given to it by new Keynesians. Pollin seems to be critical of the state's subordination to private interest and this subordination to be a corruption of the state's true essence. But Marx set off a different line of criticism; as Robert Fine shows in his important book Democracy and the Rule of Law: Marx's Critique of the Legal Form, Marx eventually abandoned in the course of his Hegel critique the ideal of the rational state. The task, as Marx put it, was no longer to find the essence of the state apart from social relations but in social relations. From the beginning, Marx was critical of the subordination of the state to private property: in his early works he regarded this as a corruption of the state's essence; in his later works he regarded it as the essence of the state's corruption. p. 87 rakesh
rate of profit
Paul, I would be interested in this paper. Given tendency for relative reduction in valorization base--coupled with fact that the higher the rate of exploitation already is, the less productivity gains can raise it further--I have trouble understanding how a rise in the rate of increase in the rate of exploitation can account for much of the stated recovery in the rate of profit. Do we have anything like a partial coefficient for the rise in the rate of increase in s/v in accounting for profit rate recovery? Perhaps if the rise in the rate of increase in the rate of exploitation is accomplished through increasing shifts per day, the losses that would have obtained as a result of moral depreciation are neutralized and the rate of profit thereby bolstered? I would imagine that foreign outsourcing of mfg has its roots not so much in cheaper wages per se but in the greater ease at which machines can be kept at work around the clock. So just how much of recovered profitability can be accounted for by the rise in the rate of increase of s/v and specifically how exactly was the rise in the rate of s/v accomplished? And if the rate of profit did recover as much as reported, then shouldn't have the rate of accumulation picked up more than it did? Or did the rate of profit not fall and the OCC not rise exactly because the rate of accumulation remained weak? Another question: can the available data be reworked to construct measures of the Marxian rate of profit and the value composition of capital? And you made no mention of any international dimension in the recovery of profit rate. But in Brenner's account lower post Plaza dollar allows for more sales abroad and thereby the greater economies of scale by which unit costs are reduced and profitability bolstered. For Brenner this wouldn't count as a true recovery in the rate of profit in the system as a whole but rather recovery at the expense of others accomplished through politically managed relative currency values. There is also no mention of the cheaper price of oil and other internationally traded commodities. Yours, Rakesh
rate of profit
I hope that Fred comments on why and how he measures the VCC differently than Wolff. It's unclear why in one period there would be capital saving innovations and in another period not. Schumpeterian bouts of innovation? As for sectoral disaggregation, I don't see how the movement of capital into FIRE if these are the examples of new low OCC sectors can raise the rate of profit in a Marxian sense. These relatively low OCC sectors are unproductive in a Marxian sense. It makes more sense to me to think of structural transformation in two other ways: first, the reorganization of existing assets through mergers and acquisitions that cut costs and thus raise the rate of profit and, secondly, the closing down or outsourcing of those sectors of the economy (James Galbraith C's sector) most vulnerable to international competition, leaving the industrial sector more top heavy with Galbraith K's industries (high end chips, aerospace, pharmaceuticals, speciality steel, etc) in which value added is high in part due to monopoly protections. Of course the K sector tends to be even more depressed in the course of a downturn. Has anyone worked through Rigby and Webber's econometric analyses of profit rates? Rakesh
Re: RE: Re: Re: marx's proof regarding surplusvalue and profit
I actually do deny the existence of a physical surplus, in the real world. ok Andrew you deny the existence of A physical surplus. The concept is appealing, but ultimately meaningless. Physical things are heterogeneous, and there are surpluses of some, deficits of others. There cannot be any the physical surplus. now you deny the existence of THE physical surplus. Granted there is not a single dimension in which this physical surplus can be expressed. Granted that with technical progress--say computers--it would be difficult for example to determine how many more computer means of production in which the surplus value is embodied. But I think it's a mistake to deny that with rising productivity there is indeed some rough sense in which we can say that the mass of surplus value even if it falls falls relative to the advanced capital is in fact being expressed in a greater physical quantity of means of production and wage goods, even if we have no precise measure for that physical quantity. If you deny this, you miss a crucial source of the elasticity and explosiveness of accumulation. My criticism of the TSS school again is that it is anti physicalist. And again here is Marx on the matter: Here is an example of Marx's ability to understand the surplus in both its aspects: ...the development of labour productivity contributes to an increase in the existing capital value, since it increases the mass and diversity of use values in which the same exchange value is represented, and which form the material substratum, the objective elements of this capital, the substantial objects of which constant capital consists directly and variable capital at least indirectly. The same capital and the same labour produce more things that can be transformed into capital, quite apart from the exchange value. These things can serve to absorb additional labour, and thus additional surplus labour also, and can in this way form additional capital. The mass of labour that capital can command does not depend on the its value but rather on the mass of raw and ancillary materials, of machinery and elements of fixed capital, and of means of subsistence, out of which it is composed, whatever their value may be. SINCE THE MASS OF LABOUR APPLIED THUS GROWS, AND THE MASS OF SURPLUS LABOUR WITH IT, THE VALUE OF THE CAPITAL REPRODUCED AND THE SURPLUS VALUE NEWLY ADDED TO IT GROWS AS WELL. Capital 3, p. 356-7. vintage Rakesh
Re: RE: marx's proof regarding surplus value and profit
Andrew writes: A physical surplus and the physical surplus mean exactly the same thing in this context. ok I do not deny, but affirm that with rising productivity there is indeed some rough sense in which we can say that [a falling] mass of surplus value [corresponds to] a greater physical quantity of means of production and wage goods. This is the ESSENCE of anti-physicalism. ok but then what are the consequences on accumulation from this greater physical quantity of means of production and wage goods? Are you in fact keeping both the value and the use value or physical dimensions in mind when analyzing the accumulation process? I think you have bent the stick too far in the value direction. A rough sense is fine for many purposes, but not for looking at whether surplus-labor is the sole source of profit. ok. Again I have not read your paper, and cannot assess your claims. My knowledge of the Fundamental Marxian Theory derives from Catephores' book. RB
Re: Re: Marx's Proof
I am just trying to get Marx's basic vision. Does this sound right? By c and v, I mean the money sums laid out as constant and variable capital The cost price (c+v) of each commodity drops. It gives the first moving capitalist an immediate advantage, and greater ability to all capitals to survive wherever the price level settles. Moreover, the ratio of v/c tends to drop. But this does not mean that c need rise in absolute terms per commodity; it can rise as long as v drops by more than the rise of c, which of course only says that the cost price (c+v) has to drop. This is labor saving change. If c per commodity drops--that is capital-saving change--v per commodity will tend to drop even more, so that v/c tends to drop even though the denominator is falling in absolute terms. Machines are becoming ever cheaper and more powerful. If one provisionally assumes a constant rate of surplus value, the drop in v/c in the course of accumulation requires that the rate of accumulation must be fast enough to ensure that the mass of profit rises. So say as a result of the fall in V/C the rate of profit is halved each year. If the amount of profit is to remain the same, then the total capital must double each year. This is the absolute minimum rate of accumulation: the multiplier indicating the growth of total capital must be equal to the divisor indicating the fall in the rate of profit. The accumulation of capital is made possible by the greater quantity of use values in which the diminishing flow of surplus value relative to total capital advanced is expressed. Rakesh Doug, I think everything is a bit off the cuff here and perhaps misses what might be important. Among other things you wrote: Not getting value theory right has inhibited just what political or intellectual progress exactly? Yet this is a good question. Let me suggest some possible answers: 1. We, radicals, have little sense of how technical change takes place in capitalist society. That is, the common interpretation of Marx is that technical change is labor displacing at all costs. Laibman goes as far as to say that capitalists innovate in a Rube Goldberg fashion. That is, labor replacing technical change takes place at all costs. That is what ortho Marxism has held for over a century. I doubt this is true and do not impute that view to anyone, save David, in particular. So what? Seems to me that anyone with this view could easily grab hold of the idea that an alternative to capitalism could exist side by side with a society growing in such Rube Goldberg fashion. 2. Within traditional approaches to Marx as well as in standard eco thought, little if any attention is paid to moral depreciation. Indeed, the qualitative and quantitative aspects of this type of depreciation disappear as one simultaneously values inputs and outputs. Thus, in theory, we can create situations in which a capitalist invests $100, ends up with $20 and have a rising rate of profit. The usual understanding of Marx's concept of valuation incorporate this absurd possibility. Put simply, using Marx's concept of value, we should be able to grasp how technical changes take place in capitalism and what are the consequent changes in valuation. If we can't, we should move on to something else. I do not feel that seeking answers to this problem is a sub for activism nor do I find the concepts alienated. John
Re: Re: Re: Re: Re: Roemer and Exploitation
Gil writes: On the first question, I suspect the distinction Keynes is alluding to involves the difference between *physical* and *revenue* productivity. OK, I get that An investment may lead to a new machine being built, but not necessarily to any money being made from the use of the new machine. But how is this possible if the new machine is as, if not more, productive in physical terms than the extant machinery? Keynes does not seem to applying a Ricardian diminishing returns principle to the capital stock, right? So how does he explain the divergence between physical and revenue productivity? Rakesh writes I also had written the following on which Gil did not comment: To say that additional capital is increasingly in short supply vis a vis the new and displaced laboring population as accumulation progresses only means that in the course of accumulation the primordial source of this capital, surplus value, becomes progressively more scarce, too small, in relation to the already accumulated mass of capital I skipped this because my response would have been redundant: i.e., whether or not surplus value becomes progressively more scarce...in relation to the already accumulated mass of capital has no particular relation one way or another to the question of whether labor is subsumed under capital, and thus no particular reason to venture into the hidden abode of production. Again, there's no reason to think that the possibility that surplus value becomes progressively more scarce can't be demonstrated in the context of the appropriate empirically motivated Walrasian model. Gil, there is no connection between the hypothesis of the progressive relative scarcity of sv--the primordial source of new capital--and Marx's theory of the dynamics of (relative) surplus value production? Gil replies: I rid, I mean read, this statement as corresponding to Marx's KI/25 analysis of the general law of capitalist accumulation, to the effect that any rise in wages above subsistence due to demand pressures from capital accumulation is necessarily self-limiting, since the resulting loss in profit leads to a corresponding reduction in the rate of accumulation. (This self-limitation is further reinforced by tendentially rising OCC.) But I don't see why anyone has to venture into the hidden mode of production to yield *this* particular point. which point exactly? the point in the excised paragraph above about the primordial source of capital? Yes, necessarily, since it's equivalent to the point I answered explicitly. darn, we're nearing our impasse again. How do you explain persistent scarcity? What do you mean by scarcity? Re the second question, you first: what did you mean by the phrase progressively more scarce in the paragraph you appended at the top of your post? It's likely we mean very much the same thing by this term. The first question is not at issue. What *is* at issue is whether the appropriate explanation can be couched in Walrasian terms. In your post 23776, you suggested it could not be. You refer at some point to capital constrained equilibrium--is this a well understood defintion of scarcity to the economic theorists on the list? Are these questions taken up in your formal reply to which Roberto V has referred? I think so, but you'd have to ask the other economic theorists on the list re the first question. On the second, yes. I'll await Roberto V's reply to you. By the way, what do you make of Keynes' argument about the relationship between the declining marginal efficiency of capital as capital becomes less scarce though not necessarily less physical productive? What is the connection between the scarcity to which you refer and Keynes' nebulous idea of capital scarcity (or the lack thereof)? Re the second question, roughly speaking, a condition of capital scarcity implies the marginal efficiency of capital is strictly positive. Of course if capital were not scare, then various forms of state coercion could still a positive prospective yield on capital, no? I took this issue up in my response to Roberto Veneziani when I suggested there was no necessary connection between the economic conditions leading to the subsumption of labor under capital (i.e., capital's reign over the hidden mode of production and those capable of explaining the persistent scarcity of capital in the face of capital accumulation. I am not suggesting a necessary connection. If there is no necessary reason to refer to the hidden mode of production in discussing reasons for persistent capital scarcity, then I believe I've answered your criticism of the Walrasian framework that prompted this exchange. I think Marx's theory of accumulation provides a a highly plausible explanation for the persistence of scarce DOPA. I don't understand your explanation for said persistence in the course of both extensive and intensive capital accumulation. Rakesh
Re: Re: marx's proof regarding surplus value and profit
Since Andrew said he wasn't getting all his incoming messages, I shall repost the following questions (of course if John E or Manuel or Gary or Mat has answers, I would appreciate it): And one can reply: well didn't Marx himself make such an assumption of classical natural or equilibrium prices in his own reproduction schemes and transformation analyses? Do equilibrium prices not exert *any* force at *any* point in the course of capital accumulation or the business cycle? Are they of *no* theoretical interest *whatsoever*? Isn't it towards an equilibrium point based on the new adopted technology that the economy is moving in Schumpeter's recession phase of the cycle? Or do Andrew and Alan Freeman reject this Schumpeterian assumption just as it is rejected by Alan's father Chris Freeman, perhaps the leading economic student of science and technology in second half of the 20th century? Rakesh ps Andrew I'll copy your paper at the library since I won't be able to read it.
Re: RE: Re: Re: marx's proof regarding surplusvalue and profit
I'm not sure what the below is in response to, but briefly: Andrew, If you are going to address me, please use my name at some point. Please do not use the passive voice as Jim D in replying to one of claims. It has been asserted that... For example, you could have said I'm not sure what Rakesh [or Bhandari] is responding to below, but briefly.. Devine could have said: It is asserted *by Bhandari* that Fred's criticism of me has echoes of the young Strachey's criticism of Robinson, but this assertion is baseless. At the very least, claims should remain tied to authors for the purposes of clarity. Secondly, please do not give me orders most especially when they are opaque. We Marxists should not be in the business of bossing people around. You order me not to confuse classical equilibrium prices with the simultaneist equilibrium stationary prices. But you don't tell me what the difference is and you don't prove that Marx does not use the latter. So you have VERY OBNOXIOUSLY given me an order without clarifying what it is or why I should heed it. Thirdly, I think your point that classical equilibrium prices are not themselves a force but a resultant of forces is valuable, though I need to think about it. It seems that the whole discussion is shot through with metaphors from physics. Fourthly, I am not clear as to what classical equilibrium prices are; my reading of Ricardo does not suggest to me that he meant by them what many interpreters mean by them; my reading of Marx suggests that his price theory is much more dynamic than Ricardo's, so it is not obvious to me that Marx recognized the existence of classical equilibrium prices. Rakesh Marx generally thought that market prices tend to fluctuate around equal-profit rate prices -- classical equilibrium prices. (I would dispute your reading of the end of Vol. II and Ch. 9 of Vol. III if I had time.) Such prices have theoretical interest to me. They do not exert any force -- they are the outcome of the workings of various forces. Real magnitudes determine derivative magnitudes like averages, not v.v. All of this has zip to do with the equilibrium -- stationary -- prices and the associated equilibrium profit rate of simultaneism that we critique. Do not confuse the two. The latter is of no interest whatsoever. This is a very strong claim, and you give me no reasoning or no citation where the reasoning behind this very strong conclusion can be found. Rakesh I have no position on the rest. I'd need to study the question carefully. Andrew Kliman
Re: RE: marx's proof regarding surplus value andprofit
Silence = suppression of Marx. Diversion = suppression of Marx. Sarcastic dismissal = suppression of Marx.. Andrew Kliman I do not see how these identities were arrived at. As general statements, I cannot imagine anything more absurd. At the very least, it seems to me that such equations easily read as an attempt to make critical, spirited enquiry into Marx or the very attempt to develop other radical traditions engender guilt and danger, but such an attempt will doubtless backfire by turning people away from any enquiry into Marx at all. Need to unsub again for awhile. Gil, if you respond on Keynes, I'll check the archive. Rakesh
Re: re: Strachey/Robinson debate (wasMoseley/Devine)
In a pen-l message on March 12, it is asserted that:It seems that Joan Robinson and John Strachey had an argument similar to the recent one between Devine and Moseley. The record should be clear that there is no similarity between the quoted passages to the discussion between myself and Fred. We were talking about the causes and importance of empirical fluctuations in the profit rate. Jim Devine Jim, I have some web addresses for all natural memory boosting supplements if you want them--haven't had to use them myself yet--though in your case I think a little less blind knee jerk reaction would be the best cure. Are you sure that there is no similarity between what Strachey who was at this point in 1938 still, like Fred, a FROP theorist was trying to say in response to Joan Robinson and what Fred is getting at in his response to you? Even if turns out that careful analysis reveals that there is no overlap between the Strachey riposte to Robinson and what Fred said below in a response to you--and I am not denying that your later response to Fred was quite reasonable, if not persuasive--I think I can be excused for thinking there may be a connection. After all, I said that the old argument *SEEMS* similar to the present one. Show me why not; or please do consider apologizing. I would appreciate it. I doubt that Michael will encourage you to do so, but that would be nice. You could also express appreciation for my having taken the time to have typed in the hard-to-get quotation from a defunct journal and raised the question of whether there are echoes of an old debate in the new one. rb Date: Sun, 17 Feb 2002 23:56:17 -0500 (EST) From: Fred B. Moseley [EMAIL PROTECTED] To: '[EMAIL PROTECTED]' [EMAIL PROTECTED] Subject: [PEN-L:22962] Re: Devine/Moseley discussion Reply-To: [EMAIL PROTECTED] Sender: [EMAIL PROTECTED] This is a belated response to Jim D.'s post of Feb. 3. Jim, thanks again for your thoughtful posts. I too have found our discussion stimulating. I have been thinking about our agreements and disagreements, and trying to further clarify my own ideas. Due to limited time, I want to concentrate on the last part of your post which deals with the key issue of what adjustments are necessary for a sustainable recovery from the current recession. This last part of your post is as follows: On Sun, 3 Feb 2002, Devine, James wrote: The other crucial question is: what is necessary for a sustainable recovery from the current recession? I argue that a sustainable recovery requires an increase in investment spending, which in turn requires an increase in the rate of profit. One of the main ways to increase the rate of profit is to cut wages. This conflict between profit and wages is an unavoidable fact of life in capitalism, and it is intensified in recessions. Cutting wages is the old time religion for capitalists. (To quote Andrew Mellon, the Paul O'Neill of the late 1920s and early 1930s, liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate.) It perhaps makes sense within the logic of capitalism - an essentially anti-human system - that the only way capitalism can prosper is on the backs of the workers. But, as I've said in my papers on the origins of the Great Depression of the 1930s, this logic only works if there's enough aggregate demand to allow the realization of the increased profits that result from cutting wages (relative to labor productivity). In a serious recession of the sort I think may be developing, business investment spending is blocked by extreme excess capacity, business debt, and pessimistic expectations. In that situation, capitalists are in a double bind: conditions push them to slash wages and speed up labor processes, which helps with profit production but (all else equal) makes the realization problem worse. This is what I've called the underconsumption trap. (If, in addition, we get into a full-scale deflation process involving falling nominal wages, that makes things even worse.) In this situation, the workers' struggle to prevent wage cuts and the like (or to actually raise wages) actually help capitalism, by allowing consumer spending to stay stable (or to rise). Keynesian fiscal policy can work here, though of course with the current balance of political power it's likely to involve tax cuts for the rich and increased military spending. You seem to be agreeing with me when you say the following: However, cutting wages will also reduce consumption in the short-run, and thus will make the recession worse. This is especially worrisome at the present time, because of the unprecedented levels of debt of all kinds - business debt and household debt and US debt to foreigners. These high levels of debt make the economy vulnerable to a more serious downturn. Therefore, the current dilemma seems to be: that which is necessary to
Re: Re: Re: Roemer and Exploitation
Gil wrote, quoting me: The basis you offer for the first statement is It is the scarcity of surplus labor in the production process that ensures the relative scarcity of capital with respect to labor: the diminishing flow of surplus value relative to rising minimum capital requirements constrains and discourages the rate of accumulation that would be needed as the OCC rises to absorb not only a growing population but also the proletarians, artisans and peasants continously displaced by technological change and the expansion of commodity production. I also had written the following on which Gil did not comment: To say that additional capital is increasingly in short supply vis a vis the new and displaced laboring population as accumulation progresses only means that in the course of accumulation the primordial source of this capital, surplus value, becomes progressively more scarce, too small, in relation to the already accumulated mass of capital Gil replies: I rid, I mean read, this statement as corresponding to Marx's KI/25 analysis of the general law of capitalist accumulation, to the effect that any rise in wages above subsistence due to demand pressures from capital accumulation is necessarily self-limiting, since the resulting loss in profit leads to a corresponding reduction in the rate of accumulation. (This self-limitation is further reinforced by tendentially rising OCC.) But I don't see why anyone has to venture into the hidden mode of production to yield *this* particular point. which point exactly? the point in the excised paragraph above about the primordial source of capital? For example, Marx's argument holds if it's true that the only funds for accumulation come from the retained earnings of capitalists. This result could certainly be generated by the appropriate (and empirically motivated) Walrasian intertemporal model. I took this issue up in my response to Roberto Veneziani when I suggested there was no necessary connection between the economic conditions leading to the subsumption of labor under capital (i.e., capital's reign over the hidden mode of production and those capable of explaining the persistent scarcity of capital in the face of capital accumulation. How do you explain persistent scarcity? What do you mean by scarcity? You refer at some point to capital constrained equilibrium--is this a well understood defintion of scarcity to the economic theorists on the list? Are these questions taken up in your formal reply to which Roberto V has referred? By the way, what do you make of Keynes' argument about the relationship between the declining marginal efficiency of capital as capital becomes less scarce though not necessarily less physical productive? What is the connection between the scarcity to which you refer and Keynes' nebulous idea of capital scarcity (or the lack thereof)? I took this issue up in my response to Roberto Veneziani when I suggested there was no necessary connection between the economic conditions leading to the subsumption of labor under capital (i.e., capital's reign over the hidden mode of production and those capable of explaining the persistent scarcity of capital in the face of capital accumulation. I am not suggesting a necessary connection. Gil writes: Exactly. And *given* such socially-determined differences [in time preferences--rb], I show that one can account for the persistence of capitalist exploitation. Well, this very concept of time preferences surely needs unpacking. Rakesh
Re: Re: marx's proof regarding surplus value and profit
Michael writes: One more short, but obvious point regarding profit and surplus value. Marx did offer one simple proof of the role of surplus value in the creation of profit. Suppose, he says, that we take the working class as a whole. If the working-class did not produce anymore than it consumed, profits would be impossible. Michael, no one disputes that surplus *labor* is a necessary condition for both the existence of profit and the existence of surplus value. It does not follow from this that surplus value has a role in the creation of profit. It could with equal (non-) logic be said that profit has a role in the creation of surplus value. Similarly, it does it follow that value... is fundamental to price, in the sense that prices and profits depend on what happens in the sphere of value. Gil I have not read Andrew's paper, but it would be nice to be able to assess his provocative claim that the assumption of simultaneous valuation *logically* precludes one from asserting that surplus labor is a necessary and sufficient condition for positive profit. Andrew seems to have a good taste for difficult, important and in this case fundamental problems in the so called modern interpretation of Marx It would be helpful, I believe, if we could discuss as topics in the history of economic thought (a) the idea of the surplus (I would like to defend Marx's unappreciated idea, recovered by Grossmann, that it has two forms--a value form and a use value form, one the product of abstract, general homogenous labor and the other the product of concrete labor; Marx, who was after Babbage perhaps the greatest 19th century economic student of science and technology, NEVER says that changes in the use value quantity of physical surplus are conditioned solely on changes in the surplus quantity of abstract homogeneous, general social labor time ) and (b) the methodology of comparative statics, in particular its working assumption of simultaneous valuation. For topic a, there is a good, introductory discussion in Peter Lichtenstein's An introduction to post-Keynesian and Marxian theories of value and price though I think he misses entirely Marx's discovery of the dual form of the surplus. And the existence of two surpluses comes up in Andrew and Freeman's work which studies the relationship between surplus *value* and the *physical* surplus. I have offered a criticism of their treatment. I do not read them however to be denying the existence of a physical surplus but rather to be demonstrating that the attempt to calculate the profit rate based soley on the physical surplus (as well as a fixed distributional parameter) necessarily presupposes the dubious simultaneous assumtion of input=output prices and that such an assumption is at odds with both Marx dynamics vision and more importantly the dynamics of capital accumulation. And one can reply: well didn't Marx himself make such an assumption of classical natural or equilibrium prices in his own reproduction schemes and transformation analyses? Do equilibrium prices not exert *any* force at *any* point in the course of capital accumulation or the business cycle? Are they of *no* theoretical interest *whatsoever*? Isn't it towards an equilibrium point based on the new adopted technology that the economy is moving in Schumpeter's recession phase of the cycle? Or do Andrew and Alan Freeman reject this Schumpeterian assumption just as it is rejected by Alan's father Chris Freeman, perhaps the leading economic student of science and technology in second half of the 20th century? What would be a good introductory treatment to problem (b)? Aside from logical claims, I thought Michael's (as well as Shane's) point was not that the labor theory of value is provable or deducible but rather that it is a reasonable working hypothesis which can be applied on the basis of the categories developed out of it to the empirical analysis of capitalist dynamics (Shane's dissertation) and in particular to the problems of capitalist crisis (Michael's qualitative value theory). John E has added--and I was hoping for good replies--that it provides the best basis for aggregation and the analysis of totalities as well. Much economic criticism of Marx aims at showing that the labor theory of value is not a reasonable working hypothesis in a complex capitalist economy (the hoary transformation problem) so it shouldn't even be allowed to be applied to analysis and serious problems. This is not something serious scholars do, it is something propagandists, hacks and worse of all metaphysicians do. And so on. Rakesh
Re: Re: Marx vs. Roemer
Michael writes: For Marx, value is unobservable. It is a fundamental to price, in the sense that prices and profits depend on what happens in the sphere of value, but Marx paid little attention to the manner in which value gives rise to prices. Marx however was concerned with exactly why the value of a commodity (thing) could only be expressed by way of another thing and eventually money price. I don't see that Marx paid much attention nor was he very concerned with the mechanics of the transformation problem. Marx's transformation demonstrates the collective nature of exploitation. This is an important result, and I don't think we should be intimidated by Bortkiewicz. The so-called transformation problem is a problem only if you believe that the precise relationship to prices and values is important. That the relationship breaks down even in the aggregate-in particular that prices can and do rise for some time as the value of commodities are falling--is not a logical contradiction in the labor theory of value but a real contradiction in the capitalist economy. In the course of a boom, there is optimism, even exhiliration, but even Keynes hints that there are *objective* facts which determine the changing mood: The disillusion comes because doubts suddenly arise concerning the reliability of the prospective yield, perhaps [!!!] because the current yield shows signs of falling off (GT, p.317) But this still seems to contradict Marx. For why would profits both as a mass and possibly even as a rate rise at all in the upward phase of the cycle since with increasing investments, accumulation of capital and concentration of production, technical improvements, etc, the OCC is growing and the tendency for the rate of profit should be falling? I would think that in the course of the boom demand outstrips supply as a result of the extension of credit and thus allows the price level to become unhinged from values. Perhaps the general price level rises faster than money wages in particular? Y/K may rise as well. However, as the yield on the marginal investment show signs of falling off--an objective fact despite Keynes' attempt to overpsychologize--credit is no longer used primarily to expand production but to speculate on the stock market and outguess rivals in futures markets. The Fed may tighten in the face of speculative excess. The price level cannot be sustained. The crisis is on. I read Marx as saying that what goes on in the sphere of value is far more important than the sphere of prices. The system will prices and profits does become important in so far as it shows how an economy based on values is dysfunctional and will eventually will become a source of great dissatisfaction, so much so that people will eventually will reject the market. Yes the value dimension becomes visible at some point like one can be reminded of the law of gravity when one's roof falls on one's head. Rakesh
Re: Re: Re: Marx vs. Roemer
Shane Mage When we read on a printed page the doctrine of Pythagoras that all things are made of numbers, it seems mystical, mystifying, even downright silly. When we read on a computer screen the doctrine of Pythagoras that all things are made of numbers, it seems self-evidently true. (N. Weiner) Shane, do you endorse this idealism? Mario Bunge has argued against the myth that the universe is made of bits rather than matter, a myth strengthened by the enormous role that information plays in industrial societies has given rise to the myth An instant's reflection suffices to puncture this idealist fancy. In fact, an information system, such as the Internet, is composed by human beings (or automata) that operate artifacts such as coders, signals, transmitters, receivers, and decoders. These are all material things or processes in them. Not even signals are immaterial: in fact, every signal rides on some material process, such as a radio wave. In other words, it is not true that the world is immaterial or in the process of dematerialization - or, as some popular authors put it, that bits are replacing atoms. We eat atoms, not bits. And when we get sick we call a physician, not an electronic engineer. What is true is that E-mail is replacing snail-mail. But both the electromagnetic signal that propagates along a net and the letter carried by a mailman are concrete items. The information revolution is a huge technological innovation with a strong social impact, but it does not require any changes in worldview: today's world is just as material and changeable as yesterday's. Bunge, Mario A humanist's doubts about the information revolution.(The Freedom to Inquire) Free Inquiry v17, n2 (Spring, 1997):24 (5 pages)
Re: Re: Re: The Incomplet Recession
Tom Walker wrote: I see the hair-shirt left-wing gloomster crowd is at it again wringing their hands in ghoulish glee at the misery that will befall the working class and lead lickety-split to the final conflict. When will you guys ever learn that rotten and corrupt as it is, capitalism provides the best damn goo-gahs on earth. I'm kidding, of course. Just wanted to save Doug the trouble of his usual rant. Thanks, but I'd never say best damn goo-gahs on earth. Nice try, though. I'd deliberately kept quiet, though, so I could watch you all cope with the likely end of the U.S. recession. You haven't disappointed, so far. Doug, the strength of the US recovery could be quite disappointing from the point of view of the expansion of global capital. Despite the recovery there may be quite a bit of intl jostling over who suffers losses. rb
protectionism
Jim D wrote: It's interesting that a foreign-tradefinance expert like PK never mentions that a lot of the steel industry's problems recently have been due to the steep appreciation of the dollar (relative to its biggest trading partners) since 1995. __ Yet this raises the question: if the high dollar has cost jobs, should protectionism be adopted? I wonder whether Jim agrees with Krugman's criticism of protectionism? Since Jim is ostensibly ignoring me, perhaps someone else can put the question to Jim so that we can be clear about what he agrees and disagrees with in the columns of his former college roommate? Rakesh
Strachey/Robinson debate (was Moseley/Devine)
It seems that Joan Robinson and John Strachey had an argument similar to the recent one between Devine and Moseley. Unlike Fred, Strachey was by the time he wrote the following about to abandon revolutionary Marxism. this is from the Modern Quarterly, no 4, vol 1 (October, 1938): Mr Keynes formeost supporter, Mrs Joan Robinson, includes in her volume, Essays in the Theory of Employment, a review of my book The Nature of Capitalist Crisis. She declares that for me the merit of the LTV is that it enables us to know 'the law of motion of capitalism.' 'And this law,' she continues is based primarily upon the proposition...that an increase in the ratio of capital to labour tends to lead to a fall in the in long period rate of profit on capital. Now the argument by which this proposition is derived from the labour theory of value is completely circular, but the proposition itself in unexceptional. 'Thus when all the verbal jugglery is finished we arrive at a perfectly definite conclusion. In Marx's view the rate of profit tends to decline as capital accumulates, and an ever greater rate of accumulation is necessary to maintain production [sic should be to effect an increase in the mass of profit--rb]. As soon as the rate of accumulation is checked the crisis is upon us. The only way to cure the crisis is to increase accumulation. But this can only be done by reducing consumption. The system can only function so long as the capitalists are amassing more and more capital and the rest of the community less and less goods. The pivot of the whole argument is that investment cannot increase unless consumption declines...' And Strachey replies: Marx did not say the ever increase rate of accumulation necessary to keep the wheels of capitalism turning could oly be achieved by 'reducing consumption.' What he did say was that in capitalist societies consumption could not be allowed to increase, at any rate substantially, rapidly, or to be precise, in proportion to the increasing productivity of labour, because of the necessity to maximize accumulation. Thus 'the pivot of the whole argument' is is not that 'investment cannot increase unless consumption declines.' The pivot of the argument is that investment (or accumulation) cannot be increased sufficiently rapidly to keep the wheel of industry turning if consumption is allowed to rise as fast as teh rise in the productivity of labour. It is this which blocks the way to all those attractive solution by means of a policy of high wages with which we are familiar. pp. 246-47
Re: Re: Strachey/Robinson debate (wasMoseley/Devine)
Strachey's explanation is a bit mechanical. Rising wages can put pressure on capitalists to renew their capital. Strachey has an implicit response, though I think there are many questionable assumptions embedded in it. Say rising wages leads to adoption of new and improved capital goods which will yield a satisfactory rate of profit by means of dispensing with labour. Then still fewer workers will now be needed to produce the amount of consumers' goods which can be purchased. The amount of consumers' goods which can be purchased will no doubt rise to some extent, if the entire number of displaced workers can be reemployed. But they will only be reemployed if a gerater rate in the production of new capital goods is achieved. Therefore this still greater rate of accumulation becomes a condition for avoiding mass unemployment. But the second set of new capial goods in turn must be of improved, kabour saving kind, or their production will not seem profitable. But is their appearnace will necessitate a still larger creation of capital goods, at the third remove, in order to absorb the labour displaced from the production of consumers' goods. And so on and so on. rb
Re: Re: Re: The Incomplete Recession
In economic terms, the current rot can be traced to a business backlash against gains made by labor after WWII. Galbraith and Ferguson point out that government policy was vastly better 40 years ago than it is today, despite, obviously, the horrid social relations then extant. Bill, how and why did govt policy get worse? And if we count as part of capitalism those who live and work within it but who seek to change it, they have been strengthened in many ways, as can be seen from the sorts of protest visible in Seattle, something largely unthinkable 40 years ago. Not all change of liberal, global capitalism points in emancipatory direction. I think Seattle--or rather the AFL CIO's Seattle--was complex in its meaning and effects: it set the stage for a nasty anti China campaign which I think made the Chinese leadership so fearful of an arbitrary loss of markets that it caved into the US WTO demands, aka economic recolonization; heavy protectionist measures against Cambodia, Africa; possibly the electoral victory of Bush; reneging on promises made to Caribbean nations; and the recent steel decision. Clinton and Summers were tremendously stupid (hi Brad if you are reading) to have recognized and thereby legitimized the unions' defacto protectionist demands which are not even in the interest of the majority of *American* working people, though guarantees as to pensions, medical benefits and life insurance would be ;for, having legitimized those union protectionist demands, they thereby legitimized to the workers (as only the highest official authority can) those politicians (Nader, Bush) who claimed that they would better advance that protectionist agenda. I know that I am pretty alone here in my harsh criticism of Seattle, but I am not critical of everything that happened at Seattle. Roberto, I see that you may be a colleague of Meghnad Desai, and have read his not yet released book on Marx and globalization. Do you share his views? And what are they? Of course if you don't have time, I'll read the book when it comes out. Rakesh
Re: Roemer and Exploitation
Gil had written: 1) SCARCITY. Skillman: As Roemer quite explicitly explains elsewhere in GTEC, the means of production must also be *scarce* for exploitation to arise. .. this is equivalent to asserting the equivalence of exploitation with differential ownership of *scarce* means of production (DOSMP). ] Roberto Veneziani writes in reply: If the issue is about ECONOMIC SCARCITY, namely the relative scarcity of capital with respect to labour, such that profits remain positive, then Skillman's point confirms my result! I show that in Roemer's subsistence economy exploitation and profits (thanks to Theorem 2.2) disappear. Skillman says: your result would not hold if profits remained positive. I agree. The point is that there is no mechanism guaranteeing such scarcity in Roemer's models, and this scarcity disappears even in the absence of accumulation, so that the physical balance between labour and capital does not change in time. 2) G. Skillman suggestion about scarcity is the following: let K be some other factor guaranteeing the scarcity of capital (namely, positive profits), how do positive profits guarantee the scarcity of capital; are they not rather an index of said scarcity? then Roemer's argument should be more precisely stated as: [X persistent + K persistent = Z persistent]. Well, it is difficult to disagree: since K guarantees persistent positive profits, by Theorem 2.2, this guarantees persistent exploitation. However, in this case, unless one shows that X is fundamental in the causation of K, namely that X implies K (so that in the end it is still only X that matters), the logical claim remains true: DOPA is not necessary and sufficient by itself to generate persistent exploitation and profits. Theorem 2.2 does not change this conclusion, and the claim that a perfectly competitive neoclassical model with utility maximising agents is unlikely to provide exploitation (and profits) as a persistent phenomenon. Why is there economic scarcity, a shortage of capital with respect to labor? And I ask this about real capitalist economies, not about Roemer's models of susistence economies? It is the scarcity of surplus labor in the production process that ensures the relative scarcity of capital with respect to labor: the diminishing flow of surplus value relative to rising minimum capital requirements constrains and discourages the rate of accumulation that would be needed as the OCC rises to absorb not only a growing population but also the proletarians, artisans and peasants continously displaced by technological change and the expansion of commodity production. To say that additional capital is increasingly in short supply vis a vis the new and displaced laboring population as accumulation progresses only means that in the course of accumulation the primordial source of this capital, surplus value, becomes progressively more scarce, too small, in relation to the already accumulated mass of capital Production (P) is explanatorily fundamental to the scarcity of DOPA (S) and thus the persistence of exploitation (E). That is, P=E implies P+S=E It's into the hidden abode of production one must enter to explain the persistence of scarce DOPA relative to labor, no? Walrasianism Marx is not suited for that kind of investigation, is it? (1) differences in preferences are the typical neoclassical argument to justify differences in wealth, and Roemer explicitly rejects this sort of argument. See for instance, the discussion about differences in rates of time preference in Roemer 1981, p.85, and Roemer, 1982, p.12. (A particularly detailed discussion is in Free to loose, but I do not have the reference because I left my copy in Italy!!). Gil, what are the page numbers here, do you know? I don't either. This is the only point in which I think there is a mere misunderstanding, probably due to my poor explanation in the paper. I do not think Marx's theory requires a walrasian model with imperfections: exploitation does not appear thanks to monopoly power, externalities, etc. The theory should work in a competitive economy, too, at least at the highest level of abstraction. The point is not the adjective competitive, but the adjective walrasian. Once again, I do not think one can provide microfoundations to exploitation within a perfectly competitive neoclassical-walrasian model. But by attempting to do so, one can speak the same language as fellow economists and more importantly prepare one's students to do well in other economics courses. And this can be more important than understanding Marx on his own terms, no? Rakesh
Re: Protection, Contagion, Reflation
Ian thanks much for forwarding this. US exports to the EU and Japan are capital goods heavy, no? Need to look at James Galbraith's and Andrew Warner's data. So it's not reflation per se the US wants but reflation insofar as it engenders a surge in investment demand, demand for new capital goods in particular. So how will profitability or the so called marginal efficiency of capital be restored? Traditional fiscal policy is not doing much good, Krugman's radical monetary (money crank) policy does not seem to be a panacea. So the options for a surge in the marginal efficiency of capital become an inflation such that prices rise faster than costs, especially wages; or class war deflation as wages fall faster than prices. The call for reflation seems to indicate that US capital prefers the former strategy. At any rate, the US ruling class is saying to its counterparts that the rate of accumulation which it sustains on the basis of American style hyper-exploitation and massive indebtedness is no longer strong enough to carry the burden of ensuring the expansion of East Asian and European capital as well. The fraternity of capital has broken down. By taking away the easy solution of the US market, US capital is pressuring other imperialist capitals (a) to raise the rate of exploitation through machinations in the realm of circulation (reflation), reform of their labor markets, tax cuts for the wealthy and concomittant reductions the social wage and thereby (PRESUMABLY) (b) stimulate the rate of accumulation which will then allow them to absorb their share of American exports which are increasingly capital goods. This is a high stakes game, and the world economy could indeed implode into rival trade blocs and the military rivalries to which that will give rise. Rakesh [Financial Times] US warns steel trade tensions may spread By Guy de Jonquières and Edward Alden in Washington Published: March 10 2002 21:22 | Last Updated: March 11 2002 01:14 The US administration has warned that strains in international trade relations could spread from steel to other sectors unless the European Union and Japan reflate their economies. Grant Aldonas, under-secretary of commerce for international trade and one of the architects of the decision last week to impose steel tariffs of up to 30 per cent, said other sectors affected could include agriculture and semiconductors. In an interview with the Financial Times, Mr Aldonas said: We have told people over time that if you don't see stronger growth abroad, you end up seeing friction on the trade account, he said. There is only so much patience that you have when you are talking about very serious macro-economic issues that have been out there for a long time. This is the first time the Bush administration has linked the steel measures to larger problems in the global economy. Mr Aldonas indicated Washington was determined to stand firm in the face of the international outcry its steel measures had provoked. This is one of those situations ... where things have to get worse before they can get better, he said. He also said the US would reject EU demands for $2bn in immediate compensation for the steel curbs, in the form of lower barriers to other imports. Washington insists the EU should first prove its claims in the World Trade Organisation. The rejection means the EU must decide whether to escalate the dispute by retaliating against US exports or await the outcome of its separate legal challenge to the steel curbs in the WTO, which could last more than a year. Mr Aldonas said Washington was prepared to stiffen its stance on trade partly because it no longer feared unnerving financial markets. Such concerns led the US to accept much higher imports from east Asian economies after their 1997 financial crisis. However, Mr Aldonas pointed out that recent turmoil in Argentina had not spread. He said failure by the EU and Japan to reflate their economies, combined with the strength of the dollar, would imperil recovery by the US agriculture and high-technology industries, which depended heavily on sales abroad. On agriculture, Mr Aldonas said the effect of deflation in Japan and recession in Europe had been to drag down commodity prices across the board in the US, while the strong dollar had hurt exports. He said Washington planned no specific trade measures to protect those sectors.
Yen still overvalued
Re: Re: Yen still overvalued by Peter Dorman 05 March 2002 22:33 UTC Thread Index Let me try another tack here. My understanding has been that Japan has been historically locked into a pattern of development characterized by high savings rates and high investment shares of GDP (the exhilirationist model). Each validates the other, and both are made feasible by a large trade surplus: this prevents the high rate of savings from becoming a Keynesian burden and it generates the induced demand for investment. _ This suggests a psychological or exhilirationist motivation for this kind of accumulation. But let us begin with the real labor constraint Japan faces, and see if Marx's theory which of course begins with the definition of value as SNALT can do real explanatory work as opposed to value free theory which seems to founder on the very persistence of exploitation. At any rate, this labor constraint will motivate a capital intensive pattern of growth--that is strengthen the tendency towards a falling V/C. But--to get back to Marxian basics as recovered by Grossmann--any fall in V/C in the course of accumulation requires that the rate of accumulation must be fast enough to ensure that the ***mass of profit*** rises. So say as a result of the fall in V/C the rate of profit is halved each year. If the amount of profit is to remain the same, then the total capital must double each year. This is the absolute minimum rate of accumulation: the multiplier indicating the growth of total capital must be equal to the divisor indicating the fall in the rate of profit. If the rate of profit tended to fall faster in Japan as a result of greater upward pressure on the value composition of capital--as seems to have indeed been the case--then the higher the minimum rate of accumulation had to be. I shall leave aside here the microfoundations by which the more than this minimum rate of accumulation, as well as a falling V/C, is enforced. But it seems reasonable at first glance to say that especially in the context of Japan's labor short island the very technical progress that first increased each capitalists' profits, next reduced the rate of profit on all of them, and so drove them all--not out of exhiliration but out of brute competitive necessity--to compensate themselves by augmenting their total capital at the maximum rate of accumulation, in order that, in spite of everything, they might increase their amount of profit. This derided Marxian law of the falling rate of profit does seem in fact to have industrialized Japan in short order. In fact the theory explains not only the rapid rate of accumulation but also how and why the system has come to jamb. Now that in Japan the productive powers have been put on new basis, upon the basis of the most advanced mechanization, the falling tendency of the rate of profit has begun to close on their system. Capital has become less and less organic: the organic composition of capital has become unfavorable to the living growth of the system. The once much vaunted rate of capitalisation of surplus value turns out not to have been evidence that consumption meant little to the Japanese ruling class; it was only by a high rate of capitalisation that the mass of profit could be enlarged until the system began to close in on the Japanese bourgeoisie. _ Peter writes: According to this view, Japan is in the midst of a protracted adjustment crisis, which can either be explained by increased competition with other east Asian exporters for the available (i.e. US) markets, or by the maturation thesis, according to which domestic consumption can no longer be constrained and the economy loses its export advantage. In either case, much of the capital stock is revealed as misinvested -- and this on top of the bad bets made during the bubble period. The Japanese system of pooling financial risk supposedly slows down the adjustment process; hence the outside calls for restructuring via write-offs and default. If this is true, the problem shows up in Keynesian fashion (reduced net exports), deflationary pressure (competition with lower-wage producers in the region), and persistent financial fragility. Comments? _ Again Marxian theory does clarify the kind of ruthless adjustment that Japanese capitalism has to undertake since as a result of technical progress, the bottom has dropped out of V/C. In order that every penny be made available to the further accumulation of capital by which as a result of a rising mass of profit the fall in the rate of profit can be beaten off, wages have to be pushed below the value of labor power. Seniority systems have to be destroyed; job protection eviserated; ruthless consolidation of industries carried out (note Chris B's commnents on changing
protectionism
Jim D wrote: It's interesting that a foreign-tradefinance expert like PK never mentions that a lot of the steel industry's problems recently have been due to the steep appreciation of the dollar (relative to its biggest trading partners) since 1995. __ Yet this raises the question: if the high dollar has cost jobs, should protectionism be adopted? I wonder whether Jim agrees with Krugman's criticism of protectionism? As Eisner pointed out, protectionism on behalf of US based textiles or steel may limit the supply of dollars abroad and raise the value of the dollar, which could say tip the balance in favor of Airbus over Boeing. The high dollar may be a problem but I think Krugman is correct that tariffs and indiscriminate usage of import surge and anti dumping clauses are not a good response to it. I also think Krugman is correct that trade nationalism, strong among the left, put that rather unlovely dude in office, but then Doug and Max already know I warned long ago that not vociferously and analytically critiquing the post Seattle trade nationalism was a huge political mistake. It's too bad leftists don't fight trade nationalism--are we to defend our capitalists against others as they all jostle in deciding whose excess capacity is to be eliminated? I have recalled a book by Michael Billig, Banal Nationalism; I think it will make for very good reading. rb
Re: Re: Yen still overvalued
Those who theorize the possibility of Japanese capitalism being reformed peacefully--despite some painful short-term adjustments--into a mature, high consumption and slow growth society seriously misunderstand the nature of capital and the violence by which it can only move forward as long as the means of production remain predominantly in private hands. I'd say Japan is a mature, high consumption, slow growth society. However, worldwide industrial overcapacity (e.g., in cars), the commodization of most electronic goods with intense competition from China, S. Korea and Taiwan, aggressive bilateral trade and financial policy from the US (which, for example, shut Japan out of the production of processor chips and OSes for pcs and forced financial liberalization on it), and a chronically overly high yen have all caused it to come to grief. Charles Jannuzi Charles (J), I don't think you are suggesting that if Japanese capitalism were to protect itself from world competition--in particular dumping by other Asian capitals overburdened with excess capacity--and allow for the home market to expand by increasing direct and social wages, such a national quasi socialist system could settle--after some adjustments--into equilibrium? Is there a Japanese Oswald Moseley for the 21st century? Rakesh
Re: Re: Re: Re: Re: Re: Re: Marx vs. Roemer
After all, for value to be surplus, you need a notion of what it is that is surplus. Justin, the surplus concept has to be thought through. It would be very helpful if we could do this on the list. I think one of the ironies of economic thought here is that while Marx criticized Ricardo for ultimately reducing capital and the surplus to money value terms--Ricardo only cares (Marx noted) about net revenue, whether an employer makes the same 10% of $2000 on an advance of $20,000 whether that advance employs 100 or 1000 workers; Ricardo cares little about gross revenue, the volume of production and consumption in terms of use value and hence according to Marx denies the importance of life itself, Ricardian political economy thereby reaching with such abstraction the peak of its infamy; the neo Ricardians on the other hand treat the surplus only in physical terms--as a collection of the various use values not needed for replacement/reproduction. It seems to me that the neo Ricardian surplus is thus more like the physiocratic one than the Ricardian conception of net revenue which according to Marx ultimately loses all touch--as if it were as abstract as the Hegelian dialectic--with the process of production and the quality of consumption in technical and quantitative use value terms. For Marx, the surplus however has two aspects--a value form and a physical form; the surplus is both a monetary expression of unpaid labor time and a collection of more or less use values. For Marx, the surplus in the latter form has great indirect insignificance for the accumulation process. Unlike the Physiocrats, Ricardo and the neo Ricardians, Marx does not treat the surplus in either value or use value terms; he grasps both aspects of the surplus in his theory of accumulation. His ability to do is based on his key discovery of the dual aspects of labor. Here is an example of Marx's ability to understand the surplus in both its aspects: ...the development of labour productivity contributes to an increase in the existing capital value, since it increases the mass and diversity of use values in which the same exchange value is represented, and which form the material substratum, the objective elements of this capital, the substantial objects of which constant capital consists directly and variable capital at least indirectly. The same capital and the same labour produce more things that can be transformed into capital, quite apart from the exchange value. These things can serve to absorb additional labour, and thus additional surplus labour also, and can in this way form additional capital. The mass of labour that capital can command does not depend on the its value but rather on the mass of raw and ancillary materials, of machinery and elements of fixed capital, and of means of subsistence, out of which it is composed, whatever their value may be. SINCE THE MASS OF LABOUR APPLIED THUS GROWS, AND THE MASS OF SURPLUS LABOUR WITH IT, THE VALUE OF THE CAPITAL REPRODUCED AND THE SURPLUS VALUE NEWLY ADDED TO IT GROWS AS WELL. Capital 3, p. 356-7. vintage
Re: Re: Re: FW: Bell-curve racism for nations
michael perelman wrote: Sabri, please be more respectful of Dr. Rushton. He will probably win the Nobel Prize or even imortatlity, I believe, for having discovered the inverse relation between IQ and penis size. I know this is a joke, Michael, but the bourgeois science thinks Rushton is a fraud and an embarrassment. Before Hitler, racist science got plenty of respect, but it doesn't really anymore. Cultural differences are made the explanans but the question of the persistence of cultural differences is left unasked, allowing racial assumptions to fill in the gap. Blacks have 1/10th the wealth of whites (defining wealth to include stocks, bonds, homes, cars, jewlery, etc; this is not wealth defined in Marxian terms). Why? At the very least, a racial world view could remain entrenched behind the curtain as economists reason from the assumption that those individuals who remain miserable proletarians as opposed to joining the wealthy have a very steep present time preference, i.e., lack of fortitude and foresight to forgo present consumption. For those who content themselves with the assumption that persistent cultural differences explain individual variance in time preference and thus the non random distribution of wealth across ethno-racial groups, all Rushton does is force them to their own implicit conclusion that such persistent cultural difference is most plausibly explained by probable heritable group differences. That's exactly where D'Souza ended up despite his attempt at a purely cultural theory of racial inequality. I suggest that the hostile reaction to Rushton is merely the return of the repressed. Rakesh
bye
have to unsub. good luck to all, r
Re: Krugman Komes Around
By PAUL KRUGMAN First comes the victory parade. Later we'll find out if we won. We won't have a serious recovery until what economists call final demand shows substantial increases, and workers start being rehired. Where will that recovery come from? Krugman makes an astonishing logical lapse here. He assumes rather than proves that current investment is determined by either current or expected consumption. Marx refers to this as the stupid dogma that the aim of capitalist production is consumption. This has not been a standard recession, in which nervous consumers pulled back and will start spending again once they have been reassured. In fact, consumers have continued to spend freely right through the slump. So the surge in consumer demand that usually drives recovery seems unlikely. As Fred M has underlined. What drove this recession was a plunge in business spending, as companies realized that they had over invested in the bubble years. Which was not provoked by a decline in current consumption, as Fred noted. What that means is that most taxpayers, when they reach line 47 of their 1040's, will discover that they owe $300 more in taxes than they expected. In other words, the one piece of the Bush tax cut that probably did help the economy last year is about to be snatched away. The direct monetary impact will be significant; the psychological impact, as taxpayers realize that they've been misled, may be even greater. ok but as consumer demand then gives and final sales suffer, couldn't firms be forced to scrap old technologies and excess capacity and invest in those processes that lower costs faster than prices are falling? Moreover, for those investment projects that are meant to meet a long term trend couldn't a drop in immediate consumption be favorable as firms may decide that it's favorable to build on the trend and thus take advantage of lower depression prices in materials, wages and possibly interest rates? In short, Krugman does not show clearly why the drop off in final sales will compound rather than have little effect or even possibly ease the fundamental problem of weak investment demand. Rakesh
Re: Re: On the necessity of socialism
In response to Doug's (tongue-in-cheek?) comment Never. It was a ruse devised by the bourgeoisie to occupy the attention of otherwise smart and knowledgeable Marxian economists on something addictively divisive but politically irrelevant. Charles writes Charles: Isn't it worse than that ? Marx asserts as principle the insolubility of the transformation problem. The unsystematic relationship between value and prices is symptomatic of the basic anarchy of capitalist production. If the problem were solved , Marx would be refuted. Depends on what you think the transformation problem refers to. As I read Marx, the problem, as he posed it in Chapter 9 of Volume III, lies in showing that aggregate prices equal aggregate values and aggregate surplus value equals aggregate profits even if commodities exchange at prices of production which are disproportional to their values (which is the general case). Issues have been raised with the logic of Marx's original demonstration, and interpretations of his value theory have been offered that get around these issues at the cost of raising others. But the real question, it seems to me, is whether anything at all that is critical to Marxist political economy hinges on this demonstration. And I agree with Doug's negative response to this question. Gil Does the Sraffa model which presumably makes Marx's demonstration redundant explain the source of profit any better the Quesnay model to which as Heilbroner notes it bears a family resemblance explains the origin of the produit net? rb
Re: Re: Re: Re: Mommy, what's a corporation?
Title: Re: [PEN-L:23072] Re: Re: Re: Mommy, what's a corporat Btw, the last time I talked to Richard, he suggested the following piece ought to be looked at by all troublemakers who can get their hands on it: ARTICLE The Thirteenth Amendment Versus the Commerce Clause: Labor and the Shaping of American Constitutional Law, 1921-1957 James Gray Pope Vol. 102 · January 2002 · No. 1 http://www.columbialawreview.org/ thanks, Ian, this seems to be a very interesting analysis indeed. ARTICLE 102 Colum. L. Rev. 1 (2002) The Thirteenth Amendment Versus the Commerce Clause: Labor and the Shaping of American Constitutional Law, 1921-1957 James Gray Pope During the twentieth century, Congress's power to regulate commerce grew sensationally while its human rights powers atrophied. The author traces this phenomenon back to the choice, made by lawyers and politicians in the early 1930s, to base labor rights statutes like the Wagner Act on the Commerce Clause instead of the Thirteenth Amendment. Unions and workers argued that the rights to organize and strike made the difference between freedom and involuntary servitude. But a bevy of progressive lawyers who styled themselves "friends of labor" undermined labor's Thirteenth Amendment theory. The author argues that this clash reflected not merely tactical differences among allies, but fundamentally conflicting constitutional goals. He contends that the Supreme Court upheld the Wagner Act not because of the lawyers' Commerce Clause arguments, but because workers staged a series of sit-down strikes that confronted the swing justices with a choice between industrial peace or war. Afterward, unions and workers interpreted the Wagner Act decisions as victories for labor freedom, but the Act's Commerce Clause foundation pointed in a different direction-one leading to fateful distortions in the jurisprudence of congressional powers. We apologize, but the full text PDF of this article is currently unavailable.
Re: Re: Re: Krugman Komes Around
I had written: Krugman [suffers] an astonishing logical lapse here. He assumes rather than proves that current investment is determined by either current or expected consumption. Marx refers to this as the stupid dogma that the aim of capitalist production is consumption. ok but as consumer demand then gives and final sales suffer, couldn't firms be forced to scrap old technologies and excess capacity and invest in those processes that lower costs faster than prices are falling? Moreover, for those investment projects that are meant to meet a long term trend couldn't a drop in immediate consumption be favorable as firms may decide that it's favorable to build on the trend and thus take advantage of lower depression prices in materials, wages and possibly interest rates? In short, Krugman does not show clearly why the drop off in final sales will compound rather than have little effect or even possibly ease the fundamental problem of weak investment demand. Michael responded; Andrew Carnegie used to follow Rakesh's strategy. It worked for him, but then the long term trend for steel was very strong. Fiber optic cable ??? The theoretical point here is--to use Hayek's metaphor--that the continuous flow of the river of investment can vary independently of the level of the tide (sales of final goods) at the mouth. The upper reaches of the volume of water is affected by the immediate flow of the tributaries to the maintstream (variations in new and replacement technology). In any given period there is no obvious correspondence bttween changes in the upper reaches and the sale of final goods; nor between the sale of final goods and employment. Moreover, as Marx first and Hayek later recognized, it is generally the case that in a slump the revival of final demand is an effect rather than a cause of revival in the upper reaches of the stream of production. Even in the absence of a high tide at the mouth of the river, the recession could be exited on the basis of replacement investments (in which new technology would be embodied) or new supplemental investments in, say, the completion of high speed connectivity (assuming the overcoming of regulatory hurdles). Intel's investment surge seems predicated on the belief in just this possibility. I am not saying any of this will come to pass. My point here is to challenge the dogma implicit in Krugman's analysis that the aim and driving force of capitalist production is consumption. There is also the question of the possible overlap in the Perelman-Brenner critique of Keynesianism and the Hayekian one! Rakesh
Re: Help Stop Ohio's Anti-Choice Resolution
[Please forward to your pro-choice friends in Ohio] Diane, have you had a chance to read Rickie Lee Solinger's criticism of framing the fight for abortion rights in terms of choice (there was a favorable review in the NY TImes review of books a few weeks ago). I have only read Solinger's first book Wake Up Little Susie which is excellent and disturbing. Here are the amazon.com reviews of the last book. Rakesh Beggars and Choosers: How the Politics of Choice Shapes Adoption, Abortion, and Welfare in the United States is a thorough feminist history of public policy on abortion since Roe v. Wade, as well as a reconsideration of recent political strategy. Rickie Solinger's third book on reproductive rights hinges on a crucial semantic shift in the 1970s from abortion rights to the softer, less direct choice and pro-choice, itself an attempt to shake off the awkward pro-abortion tag. While rights are undeniable, Solinger asserts, choice is a market-driven concept. Historical distinctions between women of color and white women, between poor and middle-class women, have been reproduced and institutionalized in the era of choice, she continues, in part by defining some groups of women as good choice makers, some as bad. Solinger also advances a troubling economic thesis about adoption, defined roughly as the transfer of babies from women of one social classification to women in a higher social classification or group. Bracing and well-researched, Solinger's arguments should be considered by anyone working for women's and children's rights. --Regina Marler From Publishers Weekly Feminists need a paradigm shift, argues Solinger (Wake Up Little Susie;, The Abortionist), away from the post-Roe v. Wade concept of choice and back to the '60s concept of rights, based on the approach of the civil rights movement, which argued that all citizens were entitled to vote, for instance, regardless of class status. Choice evokes a marketplace model of consumer freedom, she explains, while rights are privileges to which one is justly and irrevocably entitled as a human being. The shift from the language of rights to that of choice was deliberate, aimed at reducing the federal welfare tab and increasing the pool of adoptable children, which began to diminish after the early 1970s, Solinger argues. Once the pill and legal abortion were available, poor women could be considered bad choice-makers if they kept having babies they couldn't afford hardly the government's responsibility. (Never mind, Solinger observes, that many poor women can't afford either option and might want children, just as middle-class women do.) Is this progress? No, Solinger writes: women with inadequate resources... must... have the right to determine for themselves whether or not to be mothers. With its crisp, jargon-free prose and copious footnotes, Solinger's reexamination of those twin bogeys the Back Alley Butcher and the Welfare Queen is a provocative read for any modern feminist. Copyright 2001 Cahners Business Information, Inc. From Booklist Historian Solinger argues cogently that the post-Roe v. Wade decision to articulate the women's movement's goals in terms of choice, not rights, had fateful consequences for women and for the movement. Choice shifted abortion into the marketplace, as one of many consumer choices, leaving women who were too poor to qualify as consumers at the mercy of antiabortion politicians. Many activists, she observes, didn't think about the fact that pregnancy and childbearing have historically and dramatically separated women by race and class in this country. Solinger traces that separation, analyzing powerful stereotypes such as the back-alley butcher and the welfare queen and exploring the shifting qualifications imposed on women as gestators, mothers, and decision makers. In particular, she considers the interaction between advocates of choice and women who sought but did not always receive feminist support in their
Re: Re: Re: Re: Re: Krugman Komes Around
Where did Hayek use that metaphor? The Austrian Critique, The Economist, 11 June, 1983 pp.45-8 as reported in GR Steele The Economics of Friedrich Hayek. I think Justin's interest in Hayek only extends to the socialist calculation debate, not his theory of capital and business cycles? Also, I discussed the overlap between H*yek and Marx before in my Marx book, but the overlap I emphasized was in the relationship between crises and problems in coordination via the market. I do think there is a question of whether there is any similarity in Hayek's (implicit) critique of Keynesian demand management and your and Brenner's criticism of the contradictory effects of Keynesian stimulus policies. If I remember correctly, Marxists such as John Strachey in the Nature of Capitalist Crises and Leo Huberman in Man's Worldly Goods tried to show how Marxian theory captured the strong sides of the Hayekian and Keynesian diagnoses of the Depression while presenting a clear alternative in both theoretical and practical implications. rb
Re: Re: Re: Re: Re: suppression
Rakesh Bhandari wrote: Why is that when the question of oil economics came up, I seemed to be the only one who remembered Bina's work though Bina had been a co-editor (I believe) of RRPE with many of you? Hey, I had Bina on the radio. You're not the only one. Doug Doug, this was weeks after discussion had gone on your list without any serious mention of the important works in oil economics (Massarat, Roncaglia, Bromley, Spiro, Adelman and Bina) and after I had posted about my surprise of the low level of discussion on LBO here (I believe) and about Bina's work publically (on the OPE-L) and to you privately a couple of weeks before you interviewed him, no? You hadn't mentioned his work before that right? Before that there was no mention of his work, no acquaintence with his argument against what came to be called the oilism thesis. I am not now defending Bina's argument though it's nice to know that he's a nice guy--never met him myself. But this is far from the point. I am merely saying that discussion of oil economics went on weeks without mention of his work even for the purposes of refutation. And I ask myself why does it seem that no one knows about critical political economic work by a colleague on the economics of oil and US foreign policy when the US has been pursuing a very destructive policy for the last ten years or so? Was no one concerned to read and think hard about Bina's work? Why did his work so easily slip out of memory? I had no interest in revisiting our arguments about trade. This arose out of Michael's insistence that my behavior and tone are just obstacles. It would be much too much for anyone on this list to express appreciation for the concerns that I raised. After all, I did help to stimulate a discussion which was culminated by a very informative post by Hari Kumar. There is much too much unjustified confidence implied in Michael's and Jim D's negative comments about my style that in the absence of sharp and impolite questioning--questioning which does not assume in the face of contrary evidence that the addressee is not ethnocentric and does not respect the desire to be free of the imposition of having to consider matters from the point of view of another oppressed group--there would be easy overcoming of ethnocentric fallacies by which I mean the inability to see matters from the point of view of another oppressed or exploited group with which good American progressives and populists do not identify here as a result of nationalist, ethnic or gender prejudices of which they are not even or at best dimly aware. That I have reached this conclusion about many of my interlocutors does make me ipso facto impolite. Rakesh
Ill-Treatment on Our Shores
Title: Ill-Treatment on Our Shores The Progressive http://www.progressive.org/0901/amc0302.html March 2002 Issue Ill-Treatment on Our Shores by Anne-Marie Cusac On October 24, Muhammed Butt died of a heart attack at the Hudson County Correctional Center in Kearny, New Jersey. Butt, a Pakistani national, was detained on September 19 by the FBI as a suspect connected with the September 11 attacks. He was then transferred to the Immigration and Naturalization Service (INS), which charged him with a visa violation. The New Jersey state medical examiner conducted a preliminary autopsy that showed Butt died of natural causes related to a heart ailment, Emily Hornaday, a spokesperson for the state Division of Criminal Justice, told The Washington Post. On October 1, reported The Nation, Butt underwent a routine physical. His blood pressure and medical findings were normal. However, the dentist prescribed a five-day regimen of antibiotics for gingivitis. That's all he complained about, county spokesman Jacob De Lemos told The Washington Post. Butt's cell mate at the Hudson County facility tells a different story. On January 27, César Muñoz and Allyson Collins of Human Rights Watch visited the Elizabeth Detention Center in New Jersey. Both say they met with the cell mate, whose name the group is not releasing. Muñoz says he is concerned the prisoner could suffer retribution for speaking out. Collins and Muñoz say the cell mate told them Butt's collapse was anything but sudden. Even days before, he wasn't feeling well, relays Collins, associate director of Human Rights Watch's U.S. program. What the roommate told us was he helped Butt fill out request forms for medical attention, says Muñoz, a Bloomberg Fellow with the group. He told us Butt filled out five or six. Butt's written requests began about ten days before his death, Muñoz was told. He would fill out one and wait two days. When there was no answer, he'd fill out another one, Muñoz says, paraphrasing the cell mate. Butt never got any answer. On the day he died, at around 6 o'clock [a.m.], Butt said he was feeling pain, continues Muñoz. He banged on the door for five or ten minutes. Getting no response, Butt went back to sleep. He never woke up. The cell mate, say both human-rights advocates, found Butt later that morning. The INS denies the claims. We have absolutely no information to substantiate any of the allegations being propagated by Human Rights Watch, says Kerry Gill, an INS public affairs officer in Newark. This is the first we are hearing allegations like that. The allegations of mistreatment are not confined to Butt's case. Many others who were rounded up on orders of Attorney General John Ashcroft after September 11 claim to have been beaten, locked in solitary confinement, injected with substances against their will, or denied blankets, food, and toilet paper. Their allegations are generating media attention and prompting human rights organizations to demand that the U.S. government treat the detainees in a manner that conforms to international law. In November, Amnesty International sent Ashcroft a document entitled Memorandum to the U.S. Attorney General--Amnesty International's Concerns Relating to the Post 11 September Investigations. Drawing on numerous interviews with detainees and their lawyers, the organization expressed concern that many of those detained during the 11 September sweeps are held in harsh conditions, some of which may violate international standards for humane treatment. The memorandum cites allegations of physical and verbal abuse of detainees by guards, and failure to protect detainees from abuses by other inmates, as well as reports suggesting that immigration detainees arrested after 11 September are being subjected to more punitive conditions than before in some facilities and reports that people of Muslim or Middle-Eastern origin are treated more harshly than other in-mates. Traci Billingsley, spokes-person for the United States Bureau of Prisons, says she doesn't have any public information on any individual detainee. But she denies that any prisoner in a federal institution has been mistreated. All inmates are treated in a fair, impartial manner and are treated in a humane way, she says. Russ Bergeron is the chief press officer for the INS. Regarding claims that some detainees at INS facilities were not fed during interrogations, Bergeron says such events are the exception rather than the rule and that the policy of Immigration and those facilities is not to withhold meals. In response to allegations that INS detainees were held in isolation, Bergeron says, I don't even see that as an allegation. Isolation, he says, is an appropriate and recognized process in a detention environment, especially if you have an individual who is a subject of an ongoing criminal investigation, and all these individuals are, or were at some point in time, the subject of a terrorist investigation. The INS adds
Re: Re: Re: On the necessity of socialism
Sabri Oncu wrote: P.S: Any forecasts on when we will be able to solve this transformation problem? Never. It was a ruse devised by the bourgeoisie to occupy the attention of otherwise smart and knowledgeable Marxian economists on something addictively divisive but politically irrelevant. Doug For the neo Ricardians, the transformation problem is only one of the liabilities of Marx's theory of value, though as I indicated in a previous post, drawing from Geoffrey Pilling's very stimulating Marx's Capital, Marx's own transformation is a theory of class contradiction raised to the level of society as a whole. For the neo Ricardians, there are also questions of redundancy and derivativeness and the possibility of negative values. If Frank Roosevelt's Cambridge Economics as Commodity Fetishism is in fact correct (in Jesse Schwartz, ed. The Subtle Anatomy of Capitalism--has anyone read the disseration on which this was based?) there are clear political implications. Marx's value theory clarifies the struggle for the self emancipation of the working class from alienated labor while the neo Ricardian theory defends the interest of functioning capitalists, as well as fetishisizes science and technology, against rentiers. Roosevelt argues that it was not accidental that Joan Robinson became a champion of Maoist party leaders and factory managers, not the workers themselves whether they be in the West or the East, the North or the South. I suppose from this reading it would not be accidental that the neo Ricardian theory was embraced by former Stalinists such as Meek and Dobb, either. If this kind of sociology of knowledge has any weight, then one would expect say for it to be defended by those close to those Brahmin controlled CP's in India. Roosevelt's argument has been overlooked, I believe, because it is not a piece of technicist economics but in essence a philosophy of labor. And so little is written which makes a contribution to the philosophy of labor. One thinks of Raya Dunayevskaya (a lot can be learned from her), Lawrence Krader, Enrique Dussel, Istvan Meszaros, Chris Arthur. But there are libraries on dialectics, structural causality, totality, the theory of history and other weighty topics. Marxism seems in fact to have become the last refuge of the bourgeoisie. But there are criticisms to be made. Roosevelt compares the idea of the surplus as physical surplus, as a quantity of mere things to the concept of surplus as surplus *value* which indicates an exploitative social relation in the production process itself. But the surplus does in fact have to be analyzed in terms of use value and value, physical quantity and social labor time ; for while a smaller quantity of the physical surplus could have the same value as a greater quantity, the effects on the accumulation process would be markedly different. For example, if there are more means of production in physical terms, then more labor and surplus labor and surplus value can be absorbed in the following period. I think the value theorists such as Roosevelt are often too anti physicalist in their criticisms of neo Ricardian theories (I submitted this criticism of Kliman and Freeman). Marx's strength was that he analyzed the accumulation process in terms of value and use value. The quantity of the surplus in terms of physical goods matters as much as the quantity of the surplus as value (again Grossmann was the first to emphasize this). Marx's transformation tables are in fact not good at all in capturing the former side; and in this sense the simple neo Ricardian physical input-output matrices do seem to have an advantage over the Marxist value based transformation examples. And I say this despite my great sympathy for the criticisms made by Lebowitz, Roosevelt, Shaikh and Mattick Sr of neo Ricardian theory. Rakesh
politeness
What is politeness? It involves--says an old anthro book--recognition that every competent adult member of a community has a public self image, a face and thus a fear of losing face (humiliation or embarrassment) as a result of being insulted or ignored. To be polite is to attend to face in interaction; one not only tries to maintain and enhance her or his own face but cooperates in keeping others' faces because their own face depends on others whom they therefore try not to offend. To be polite then is to meet the desire that self image be appreciated and approved of. Politeness of course also means respecting peoples' need for non distraction and need to be free of imposition. So to be polite involves meeting both the positive and negative face needs of others. So I take this concern about my impoliteness to mean that I am often not at all providing for the face wants of my addressee. And one may ask why others refuse not only to provide for but also contravene my face wants. But if one assumes that I am a rational person--though this assumption can only be provisional in the case of anyone--one may ask why I often chose such an impolite communicative strategy. I shall say part of the reason is the nature of the internet with its high noise to signal ratio. In order for points not to be lost it seems that it is often best to be sharp and direct. I also think the importance of freeing our theoretical understanding from both the gods of the marketplace (i.e., bourgeois ideology in its focus of markets, exchange and demand) and ethnocentrism (the nationalism of our own respective bourgeoisie) makes any loss of face trivial to the gains in clarity and truth which are achieved in the course of ruthless criticism. For example, I sense that it is impolite not to honor peoples' desire to be free of the imposition of thinking about what motivates US policy in the Arab world or what the majority of third world trade unionists are thinking about globalization. So one is defacto impolite in raising these questions, in trying to prevent a return to a comfortable state of non distraction by those other kinds of concerns. Such an impolite discursive strategy is more Foucauldian than Habermasian as Dreyfus and Rabinow would argue. I am not as hostile to Foucault (and certainly Bourdieu) as many Marxists. And there is the disturbing implication that my impoliteness or offensiveness indicates my sense that I as an immigrant minority am in a hostile situation (and do remember that I grew up as one of only two or three Indian kids in a community and one of the very few Asian Americans in the humanistic social sciences in which little recognition of my own history was made) --that my interlocutors instead of being prejudice free interlocutors are in fact mired in the prejudices of their time and place. But in all honesty I think the social democratic prejudices of pen-l interlocutors are more much more entrenched than ethnocentrism, and there should be no question that social democrats are quite capable of being very impolite to their Marxist opponents whose face needs are met with charges of being a dummie, obscurantist, ideologue, flag waver, religious zealot. This impoliteness is a two way street. But where do we go from psychopathology? Are temporal value theorists now to be accused of running a child prostitution service? And there is finally the possibility that I offend for no reason other than to win the attention of good people in a forum in which I and any one person can easily be drowned out; that is, a message from me is always already chili-coded and thus more likely to be opened and focused on than messages from other interlocutors. Impoliteness is an attention winning strategy. I shall try to check my opportunistic reasons for impoliteness since they are destructive of rational and scientific argument. But there are other reasons too, though any communicative strategy may prove to be counter-productive. Rakesh
Re: suppression
Eric has now switched his thesis from RRPE did not put a ban on Kliman because of his politics to a RRPE ban does not constitute suppression because Kliman was free to publish elsewhere. Not very fast footed work. Devine continues to imply that much should not be made out of the rejection of a single paper but that's not the question which is why did RRPE decide it never wanted even to consider a paper by Kliman. Eric writes: Even if RRPE decided never to publish anything written by, say, Milton Friedman, this would not constitute suppression as RRPE would not stop Milton from publishing somewhere else. Well let's say RRPE had a ban on Friedman and Kliman. Why those two? Two answers suggest themselves. i. RRPE will not publish articles by a man shorter than 5'7'' ii. RRPE will not publish anything from the right or very much from the so called far left; unlike say Capital and Class it is a social democratic journal whose basic political economy combines the neo Ricardian theory of distribution with a radicalized Keynesian or Kaleckian theory of effective demand (unlike mainstream Keynesians RRPE puts more focus on better domestic and global income distribution and more aggressive public works in generating the effective demand needed for full employment). In fact that is what radical political economics is both theoretically and programatically (or all that it can be rationally be)--so why should RRPE allow in authors and papers (except on rare occassions) that do not attempt to develop but spit out irrational diatribe against radical political economics as so defined? Won't driving Kliman out put RRPE on its way to becoming the theoretical wing of the American Prospect and all that respectability that it implies? This is America after all, and a radical academic journal cannot survive with a Marxist orientation; a social democratic, neo Ricardian and radical Keynesian one has a chance though. Isn't this the issue? Irony of ironies though. I have not read Shaikh's work on the contemporary US economy--Doug refers to it often--but would it not be interesting if the strongest case for the strong long term growth that can undergird bottom up income growth and make manageable good sized govt deficits can be made on the basis of Marxian value categories, e.g., stabilization of OCC, reduction in what Foley calls production and realization lags as a result of better technology and thus lower interest costs, cheaper raw material costs as a result of the globalization of the economy, etc. What happens if the shallowness of this recession indicates that we (or at least Americans) are in a long wave upswing a strong case for which can also be made on the basis of Marxian value categories? Then the road to social democracy and peace with capitalism goes through Marxian value theory. How exactly does RRPE prevent or prohibit anyone from publishing their work in another journal? You have changed the question. Rakesh
Re: Denial
In pen-l 22914, Eric Nilsson charged that Andrew Kliman sent me an e-mail message threatening me with legal action unless I stop sending messages such as those I have been sending to pen-l. I did not. I sent him an e-mail message yesterday, but it contained NO threat of legal action. This is not an isolated incident. A few days ago, I was falsely accused on the OPE-L list of having threatened another RRPE editorial board member with legal action. After I denied the accusation, and asked for a retraction, it was suggested by me Rakesh that no retraction was necessary, because a threat of legal action had perhaps (!) been implicit. Implicit in what? In having your lawyer contact someone. Of course a threat of legal action is implicit in having your lawyer contact someone. Do you deny that your lawyer contacted that editorial board member? I also said that I would happily retract the allegation if it was agreed that you did not have your lawyer contact that editorial board member. You call for pluralism, yet in my opinion you caricatured on LBO a couple of years ago Grossman's argument though the theoretical tradition which you are attempting to develop derives from his work. You call for pluralism, yet you recognize anticipations of your arguments only in Dunayevskaya who was beaten to the punch by Grossman, Mattick and Shoul. What kind of pluralism is this--it seems to me to be party work.. You call for pluralism and yet you threatened another list member with better watch your step or some such threat. And then never apologized! You're the one who put this in the gutter, Kliman. In fact you told me that better watch your step is not a threat and cannot be reasonably taken to have been one. Absurd. I am not denying that you have been victimized by a lack of pluralism. I am saying that you do not practice the pluralism that you preach. You are as devoted to your party line as the social democrats are to theirs. You might find that distasteful, but it's not the same thing as showing me why I am wrong. Let your friends Ernst, Freeman, and McGlone tell me that I am being unfair to you. Let Ernst rise to the defense of your caricature of Grossmann; let Freeman rise to your neglect of precursors to your theory other than Dunayevskaya; let McGlone openly defend the better watch your step comment and refusal to apologize for it. At any rate, I did make another criticism of your TSS demonstration to which you are free to respond. Rakesh
Re: Re: Re: Question for Doug Henwood
I think it's because while Ernst and Bellofiore had emphasized dynamic value alone long ago, it was becoming clear that there was a sharp divide between temporalists and simultaneists, and many of the bombastic dismissals of Marx in regards in particular to the falling rate/mass of profit theory did not hold if one drops the untenable simultaneist assumption. So there was the problem that a lot of very smart people now had egg on their face. I should add that things probably got pretty hot as a result of Alan Freeman suggesting in the volume that he edited with Carchedi that neo Ricardians shared the same psychopathology as the Walrasians. Of course the psychopathological behavior was the use of timeless, moneyless simultaneous equations. The charge of psychopathology of course ramped things up a bit from Steedman's charge of muddle headed obscurantism, though thoughtful Sraffians such as Gary Mongiovi don't use such language. But I think we can say that things have been very bad in radical economic circles ever since Steedman's very heated attacks on Marxian value theory. There was no room for pluralism in that attack since it plainly stated that the condition for future progress was an abandonment of the theory of labor value. As far as I can see there are now some other major divides in radical economics: 1. regarding the falling rate of profit. a. impossible as a result of viable technical change (Okishio, Roemer, van Parijs, Bowles and Gintis) b. indeterminate depends on the movement of the real wage (Foley, Laibman) c. probable as a result of hypercompetition which is effaced in the Walrasian and Sraffian models, though Shaikh does not seem them as psychopathological d. Okishio like critiques are meaningless because they depend on equilibrium and comparative static assumptions (Ben Fine, Ernst, Carchedi,Perelman, Kliman, Freeman, Reuten). e. no empirical evidence for rising OCC (Edward Wolff, James Devine vs. Moseley). 2. Keynesianism a. in favor of a more redistributive, fiscally aggressive version perhaps on a global scale(Palley, Galbraith, Crotty). b. Keynesianism will fail because as a result of monopolies stimulus is dissipated in inflation rather than increased output (Sweezy, JB Foster). c. will fail because while indeed successful in raising effective demand and employment it lessens the power of the sack (Kalecki, Pollin, Henwood), and the power of the sack is of course the special factor that is needed to release from the potential energy of labor power the kinetic energy of laboring activity. d. deficit financing depends on the accumulation of fictitious capital which over time compounds the underlying problem of profitability that had weakened effective demand in the first place and given rise to the need for the mixed economy (Mattick Sr, Yaffe, Cogoy, Pilling, Moseley). I must say that 1c and d and 2d seem to me to be clearly correct. Rakesh
Re: Re: Re: suppression
Michael, What exactly is so objectionable about this message? I raise several questions: have reason and academic respectability been equated with a demonisation of Marx's value and crisis theory? Does the the ban on Kliman serve as indirect evidence of such a conflation by many radical economists? Does Marx's value theory provide the foundation for a bullish outlook on American capitalism? And what is your problem with me? Phillips erupts on me in an abusive post, you never publically chastise him. But you chastise me. Devine starts crying because I think he is selectively misusing the word fascism and then blames me for mis representing his theory of the exact sources of instability--did anyone else follow him? Moseley didn't. But you get mad at me for challening Devine after he bombatiscally tells us that intelligent people know that Marx got it wrong on his most fundamental points about developmental tendencies. Which implied what about me?! But of course you don't see this insidious comment as the cause of my problems with Devine. It must be something that I said and did. Justin started hurling ad hominem comments at me, but you never said a word to him. You blame me for my debate with Henwood, though you don't stop and think that to other darkies (especially non American ones) Henwood and Sawicky may indeed seem ethnocentric in the way that they understand global trade. After all, Sawicky thinks America is Robin Hood, and Henwood never got himself to understand why the majority of trade unionists are opposed to the linkage between trade and labor rights. And Henwood and Sawicky got off easier on the American dominated internet since they only had to respond to a fellow American like me. How ethnocentric are you? The America you grew up in rural PA is no more even if it seems that way in Chico. Sorry Michael. Why is that when the question of oil economics came up, I seemed to be the only one who remembered Bina's work though Bina had been a co-editor (I believe) of RRPE with many of you? I mean how ethnocentric and racist are the RRPE editors? The American left is not a pretty thing from where I look. Fight imperialism, fight racism. Rakesh STOP THIS RIGHT NOW. On Sun, Feb 17, 2002 at 10:23:44AM -0800, Rakesh Bhandari wrote: Eric has now switched his thesis from RRPE did not put a ban on Kliman because of his politics to a RRPE ban does not constitute suppression because Kliman was free to publish elsewhere. Not very fast footed work. Devine continues to imply that much should not be made out of the rejection of a single paper but that's not the question which is why did RRPE decide it never wanted even to consider a paper by Kliman. Eric writes: Even if RRPE decided never to publish anything written by, say, Milton Friedman, this would not constitute suppression as RRPE would not stop Milton from publishing somewhere else. Well let's say RRPE had a ban on Friedman and Kliman. Why those two? Two answers suggest themselves. i. RRPE will not publish articles by a man shorter than 5'7'' ii. RRPE will not publish anything from the right or very much from the so called far left; unlike say Capital and Class it is a social democratic journal whose basic political economy combines the neo Ricardian theory of distribution with a radicalized Keynesian or Kaleckian theory of effective demand (unlike mainstream Keynesians RRPE puts more focus on better domestic and global income distribution and more aggressive public works in generating the effective demand needed for full employment). In fact that is what radical political economics is both theoretically and programatically (or all that it can be rationally be)--so why should RRPE allow in authors and papers (except on rare occassions) that do not attempt to develop but spit out irrational diatribe against radical political economics as so defined? Won't driving Kliman out put RRPE on its way to becoming the theoretical wing of the American Prospect and all that respectability that it implies? This is America after all, and a radical academic journal cannot survive with a Marxist orientation; a social democratic, neo Ricardian and radical Keynesian one has a chance though. Isn't this the issue? Irony of ironies though. I have not read Shaikh's work on the contemporary US economy--Doug refers to it often--but would it not be interesting if the strongest case for the strong long term growth that can undergird bottom up income growth and make manageable good sized govt deficits can be made on the basis of Marxian value categories, e.g., stabilization of OCC, reduction in what Foley calls production and realization lags as a result of better technology and thus lower interest costs, cheaper raw material costs as a result of the globalization of the economy, etc. What happens if the shallowness of this recession
Re: Re: Re: Re: Re: suppression
Rakesh, you have recounted in your post maybe half a dozen arguments that have made you feel aggrieved. I suspect nobody else matches that record. So I must be the source of the problem? And if so, how? Did you or did you not chastise Phillips for a totally unjustified attack on me? Did you or did you not say something when Devine said all smart people recognize that Marx was wrong about what he thought were the most important developmental tendencies? Did you or did you not say something when Schwartz launched ad hominem criticisms against value theorists? Did or did you not find Sawicky's views on trade and the US as Robin Hood obnoxiously ethnocentric? Have you ever explained why Henwood was never able to get himself both to understand why most third world trade unionists oppose the linkage between trade and labor rights and to recognize that to many the US union backed anti sweatshop movements is probably a move in the direction of a protectionist system with which to replace the MFA? What's your explanation for why you tend to reprimand me and not others, given the record above? Do you deny that you are ethnocentric? Do you yourself understand Devine's explanation for why and at what point imbalances become too imbalancing for accumulation to be sustained? Yes, I bring heat on myself because I challenge the smug social democratic, ethnocentric leftism that passes for radical thought. Do I think Phillips' response was justified? No. Not at all. In fact I think with his harkening back to the great days of white Canadian social democracy was implicitly a racist reponse. Do I think Devine may be right about his critique of so called orthodox Marxism? I certainly do not rule out that he is indeed right. As I said, I do not have good direct evidence for my view. Matters are far from settled. I have been challening Fred that a low profit rate does not mean a slow down in the rate of accumulation (and quoted Hollander!), and do not rule out the possibility against orthodox Marxism that we are indeed in the early stages of an upswing. I do not want to be an orthodox crisis theorist. I welcome and want all criticism. Do I think value theorists have fended off the alternative neo Ricardian theory? No. I think both traditions are viable, and I am not overwhelmingly certain that Steedman like critiques are false. As I said, we have to deal with joint production and negative values. Do I think Sawicky's views on trade were ethnocentric? Yes. Do I think Henwood's coverge of trade suffered from ethnocentric blinders and naivety as to the goals of the US unions? Yes. Do I think Henwood is a racist. No. Were the kinds of criticisms that I was making of Sawicky and Henwood after Seattle idiosyncratic? To think so one would have to be quite ignorant of world politics. As I said, they got off easy because the Internet is American dominated, and I am a fellow American. Why do I think you single me out for reprimand? Well you know my answer. Rakesh I don't have any problem at all with your ideas. I just don't think that personal arguments have any business here. On Sun, Feb 17, 2002 at 01:56:31PM -0800, Rakesh Bhandari wrote: Michael, What exactly is so objectionable about this message? I raise several questions: have reason and academic respectability been equated with a demonisation of Marx's value and crisis theory? Does the the ban on Kliman serve as indirect evidence of such a conflation by many radical economists? Does Marx's value theory provide the foundation for a bullish outlook on American capitalism? And what is your problem with me? Phillips erupts on me in an abusive post, you never publically chastise him. But you chastise me. Devine starts crying because I think he is selectively misusing the word fascism and then blames me for mis representing his theory of the exact sources of instability--did anyone else follow him? Moseley didn't. But you get mad at me for challening Devine after he bombatiscally tells us that intelligent people know that Marx got it wrong on his most fundamental points about developmental tendencies. Which implied what about me?! But of course you don't see this insidious comment as the cause of my problems with Devine. It must be something that I said and did. Justin started hurling ad hominem comments at me, but you never said a word to him. You blame me for my debate with Henwood, though you don't stop and think that to other darkies (especially non American ones) Henwood and Sawicky may indeed seem ethnocentric in the way that they understand global trade. After all, Sawicky thinks America is Robin Hood, and Henwood never got himself to understand why the majority of trade unionists are opposed to the linkage between trade and labor rights. And Henwood and Sawicky got off easier on the American dominated internet since they only had to respond
Re: Question for Doug Henwood
In a recent post, Doug Henwood quoted the following: the Editorial Board has removed the sanction denying Dr. Kliman the right to submit articles to RRPE for publication. and added sarcastically, hey, it's important to get those value theory papers out there if we want to overturn bourgeois rule. This seems to suggest that Doug thinks it is okay to ban authors whose theoretical concerns, ideas, or political orientation differ from his own. Have I understood you correctly, Doug? As for value theory's supposed irrelevance, I'd like to remind Doug of the IMF/WB teach-in at which we spoke 2 years ago. There were about 200 anti-global-capitalist youth in the audience, plus a smattering of older folks. I gave a value-theoretic analysis of the IMF, leading to the conclusion that we need to do away with capitalism. At this point the audience broke out into spontaneous applause. At the time, Doug was impressed enough to mention this on both his e-mail list and his radio show. Andrew and I don't get along at a personal level, though I think his critiques of Bailey, of Brenner and Greider, and his debates with Foley and Laibman are all distinguished--and at times brilliant--contributions. And I shall say that it seems obvious to me--whatever the legal agreement states--that a ban was imposed on Kliman not because he was shopping a mss around at more than one journal (even if this is how the editors justified the ban on him) but because he is unlikeable and politically an unabashed defender of the economic theory of the proletariat. But I too don't like the guy. And it's not because he exploded in front of me and Doug, David Harvey, David Laibman, Bertell Ollman, his wife Ann and Mary Boger when I was asking him questions in good faith. By the way, I find Eric's insinuation that Kliman is crazy (and wasn't the point of the reference to Nash?) to in fact be politically Stalinist and reprehensible. After all, Eric said he does not know the guy. As for my beef with the guy: I find Kliman's propaganda work in favor of his mentor gets in the way of scholarly honesty. For example, his theoretical mentor Raya Dunayevskaya's theory of accumulation and crisis in Marxism and Freedom and her later critique of Luxemburg and realization and underconsumption crisis theories were anticipated in astonishing detail by Henryk Grossman and his self conscious students Paul Mattick (1934-1942) and Bernice Shoul (1947), and in bad scholarly form Dunayevskaya never cites any of them. Nor does Kliman because he is a propagandist for Dunayevskaya before he is fair minded scholar of the Marxist tradition. Kliman never tires of quoting Dunayevskaya (1957 or so) about why drop off in effective demand is itself the consequence of an antecedent fall in the rate of profit--does Kliman think Dunayevskaya came up with this idea herself? Not Grossmann in 1929 (a book which was based on lectures from 1927) and Mattick Sr in his many contributions to Living Marxism and New Essays in the 30s? Why does she not cite them? And what excuse does Kliman have? Can this be justified on scholarly grounds even if it can be justified as party work in favor of a cult leader (which is not to say that a great deal cannot be learned from Dunayevskaya and her theoretical double Schumpeter student, Radcliffe Ph.D. Bernice Shoul)? I find Kliman's hostility to Grossmann unjustifiable on other grounds (by the way, Shoul's 1947 disseration defended Grossman against Sweezy and Schumpeter): Kliman understands the temporal, dynamic approach to have its roots in an article by John Ernst who understood himself to be carrying out the modification of the Bauer scheme for which Grossman himself called. It is obvious to Ernst based on what Grossman writes in his magnum opus and his dynamics book that Grossman would never have accepted a simultaneous conception of value, and it is absurd to blame Grossman for not responding to the critiques that were formed after his death in terms of simultaneous valuation. Grossman had already called attention to the incompatibility of equilibrium and comparative statics with Marx's vision of dynamics. The temporal approach presupposes the critique of equilibrium and comparative statics, and again the priority here is Grossman's which Kliman refuses to recognize. Moreover, as to the purgative role of crises here again Grossman anticipates both Dunayevskaya and Kliman. Neither refers back to his work. It was Grossman who critiqued Bauer's scheme for constant values, and Grossman focused not so much on the on-going *depreciation* of values by means of techno-organizational change but on the *devaluation* of capital by means of crises themselves. And ultimately this is Dunayevskaya's and Kliman's focus as well! He noted that both depreciation and devaluation would slow down the fall in the rate of profit. At the very least, Kliman should clarify whether he is saying
Re: Re: Question for Doug Henwood
Eric, As I said, it looks extremely suspicious that a ban was imposed on Kliman simply because he may or may not have circulated a mss elsewhere after (for goodness' stake) RRPE rejected it the first time. He could have been warned, chastized, the rules could have been clarified, etc. But a suspension was imposed which suggests to me that in the absence of his unlikeability and politics he would not have been banned. Perhaps Rakesh can explain why RRPE is opposed to the economic theory of the proletariat, which I guess is value theory? Righto. Just as wave particle duality is the foundation of analysis of all physical phenemona, the duality between use value and value, between concrete labor and abstract labor is the foundation of the phenomena of the commodity world, including both its bizarre aspects such as the leap or pupation in exchange from a concrete use value to an embodiment of abstract, general social homogenous labor to it most painful phenomenon of the general crisis in which said leap cannot be made for commodities across the board. A number of years ago RRPE had a whole issue just on value theory, if I recollect correctly. And it has published numerous articles on value theory, from many different points of view. Why the sudden shift against the proletariat do you suppose? Is there any evidence: if it is so obvious I imagine that there must be pretty clear evidence. I think it's because while Ernst and Bellofiore had emphasized dynamic value alone long ago, it was becoming clear that there was a sharp divide between temporalists and simultaneists, and many of the bombastic dismissals of Marx in regards in particular to the falling rate/mass of profit theory did not hold if one drops the untenable simultaneist assumption. So there was the problem that a lot of very smart people now had egg on their face. By the way, I find Eric's insinuation that Kliman is crazy (and wasn't the point of the reference to Nash?) to in fact be politically Stalinist and reprehensible. I don't think I'll take the bait about this Stalinist stuff. After all, isn't it a Stalinist technique to label someone else Stalinist? ;) But I should say that Nash's work was concerned with the case in which agreements are non-binding (as is the case in cooperative game theory.) Whatever Eric you were surely playing on the vagueness in your reference to Nash. You were referring to binding agreement and Kliman's putative insanity. And in doing this, you reveal why things probably got as bad as they did. And I say this as NO friend of Kliman. Rakesh
Re: Re: Question for Doug Henwood
Rakesh, I would like proof (or at least a better argument) that Kliman was banned because of his politics. Your argument appears to be: Kliman has a particular politics; Kliman was banned; therefore, Kliman was banned because of his politics. I'll say again, Perhaps Rakesh can explain why RRPE is opposed to the economic theory of the proletariat,. . . What evidence/argument do you have for this? Is it: Kliman does value theory; Kliman was banned; therefore, RRPE opposes value theory. This is not even up to the standards of all four legged animals are dogs. Your intuition on these matters are no better than Miss Cleo's would be. Eric Stalinist and psychic in training Cmon Eric you can do better than this. I gave you my reason, you did not respond. Again: As I said, it looks extremely suspicious that a ban was imposed on Kliman simply because he may or may not have circulated a mss elsewhere after (for goodness' stake) RRPE rejected it the first time. He could have been warned, chastized, the rules could have been clarified, etc. But a suspension was imposed which suggests to me that in the absence of his unlikeability and politics he would not have been banned. I want to add that I agreed that Kliman should be kicked off another list when I found that he had not only threatened another list member but also refused to apologize for it. Rakesh
Re: Re: Question for the list
could someone please post an abstract of the Andrew Kliman article that was rejected by the REVIEW OF RADICAL POLITICAL ECONOMICS that started all this brouhaha? I want to see if it's worth the if you're not for me, you're against me rhetoric I hear from one side. Jim Devine Again, Jim. The article being rejected is not what is so damn weird; it's the ban imposed on Kliman thereafter. One would think that a lot more checking would have been done into the putative ethical violation before the ban. And the only explanation for why more checking was not done is that people wanted to run Kliman out of town because of his personality and/or politics. Neither reason is justified in my opinion. RB
Re: Re: Re: Question for Doug Henwood
I think it's because while Ernst and Bellofiore had emphasized dynamic value alone long ago, it was becoming clear that there was a sharp divide between temporalists and simultaneists, and many of the bombastic dismissals of Marx in regards in particular to the falling rate/mass of profit theory did not hold if one drops the untenable simultaneist assumption. So there was the problem that a lot of very smart people now had egg on their face. I want to add to this. I think an additional problem here is that Kliman, with a Utah Ph.D., was in the face of a lot of more famous people with distinguished pedigrees. So this made his criticism even more difficult to swallow. It's the same reason why Chico professors are ignored and independent working class council communists are ignored. Bourdieu is dead, Bourdieu lives. rb
Re: Where's the beef?
Eric, this is all the public and all I know: STATEMENT BY URPE STEERING COMMITTEE, HAZEL DAYTON GUNN, MANAGING EDITOR OF RRPE, THE EDITORIAL BOARD OF RRPE: Dr. Andrew Kliman believed that Hazel Dayton Gunn disseminated a claim that he had violated professional ethics by publishing an article in another journal while it was still under review by the RRPE. We wish to acknowledge that when he submitted a revised version of the article in question to another journal, the manuscript had already been rejected by RRPE. However, a misunderstanding arose after Dr. Kliman requested an appeal of the original rejection. The matter has now been settled and the Editorial Board has removed the sanction denying Dr. Kliman the right to submit articles to RRPE for publication. There was no intention to inflict harm on Dr. Kliman. Andrew Kliman has absolutely no evidence that URPE/RRPE has suppressed him. Andrew Kliman has merely asserted that he was won a victory over suppression. But what is the evidence that he ever faced such suppression? There is NONE. It's already agreed that URPE/RRPE had put a suspension on Kliman. I understand that you cannot speak about Kliman's case so here are some other questions: has such a suspension ever been put on someone else after for having submitted a mss to another journal at the same time it was being considered by RRPE? in the case of such a previous suspension, was the ethical violation more egregious than in case of Kliman's? I mean in Kliman's case he seems to have sought another publication venue after RRPE rejected his paper. Perhaps he should not have sent the paper elsewhere during the appeal if this is in fact what he did. But surely this is murky, and does not seem to the outsider to be grounds for putting a suspension on Kliman unless you can confirm that RRPE has imposed such sanctions on other writers in the past for even murkier violations. There must be someway around your binding agreement that you can confirm that the suspension put on Kliman was routine and in no way politically and personally motivated. But then you get on this list and basically call him a lunatic. You could simply categorically deny that the public statement indicates any confession to censorship while the RRPE publishing record clearly demonstrates a commitment to pluralism. You could say other writers have had suspensions put on them for submitting a mss elsewhere during the appeals process (surely someone has violated this policy before!!!), which strongly suggests that Kliman was not being singled out. Then you and Kliman can have an argument about whether what does appear in the RRPE reflects theoretical diversity, and in my opinion it does seem that he will lose that argument. But one wonders why the Thompson/Laibman debate did get airtime while the Laibman/Kliman one did not (though that debate appeared in Paul Zarembka's Review of Political Economy)? Andrew Kliman has absolutely NO evidence that he has ever faced suppression by RRPE. If he does he should SHOW US THE EVIDENCE. Eric, the evidence is not in question. RRPE suppressed Kliman. Where is this evidence Andrew? Where's the beef? And where do you get off insinuating Kliman is crazy when you have never met him? That completely undermines rational discussion just as much as Kliman telling a critic that he better watch his step or some such threat. It is dishonest to claim you have evidence for such a claim when you have absolutely no evidence for it. If you can't come up with the evidence everyone will know you are lying. Eric Nilsson
Re: Re: Re: Re: the profit rate recession
I had raised an objection to Fred's theory in 21987 and 99. I have found that Samuel Hollander makes a similar criticism of Marx in his classical Economics: The curve relating the profit rate and accumulation--whatever its slope--is continually shifting outward because of an increase in the purchasing power of profits, because the wants and greed for wealth increase, and because o f various institutional changes which ease the savings-investment process...With capital growing so rapidly, the notion of a supposedly falling growth rate of labour demand comes into question...But too rosy a picture of capitalistic development would not presumably have appealed to Marx. p. 397. Fred, You are probably correct, but here's what's been bothering me: Why should capitalism be more vulnerable to recessions and stagnation simply because the profit rate is falling or low? If the mass of capital advanced is growing, then the mass of surplus value which is extorted can grow even if the rate of profit falls. If the rate of capitalisation of surplus value grows along with the mass of surplus value, then the demand for labor can remain sufficiently strong to absorb population growth, no? A falling profit rate does not ipso facto mean stagnation if by stagnation you mean rising levels of real unemployment. Investment demand (i.e., investment in constant and variable capital) may be strong enough in fact to require that the valorization base be enlarged through immigration. Strong enough in fact that even with the immigration the valorization base may not large enough to sustain investment demand in additional constant and variable capital going forward. Why can't capital accumulation thus founder on a shortage of labor--or at least labor available for accumulation--even if the rate of profit is falling? Jim says that this crisis was not preceded by a rising OCC; I know Shaikh and you have questioned whether K/Y is a good proxy for the OCC (and Shaikh relies on the work of one Victor Perlo here). But the OCC need not have been rising for profitability expectations to have dimmed. Capitalists may not have thought a sufficiently large valorization base would be available for sustained accumulation. They then curtailed their investments, which has then multiplied out into a recession. That is, a perceived shortage of labor may have paradoxically led to an oversupply of labor! I am not suggesting a wage led profit squeeze--unit labor costs which of course is not a good proxy for s/v did nonethless seem stable before the recession-- but a shortage of labor thesis. In fact it may have been the overwork of the population that suggested that the valorization base was coming up insufficient vis a vis the rate of accumulation. I know this sounds absurd in a world of apparent overpopulation but the population that was well placed and suited for exploitation may have been coming up short in the eyes of capitalists, no? If a perceived shortage of exploitable labor was the trigger of retrenchment in investment, then the capitalist way out would be to increase the supply of exploitable labor, e.g., by opening the border with Mexico and improving the investment and labor codes abroad to allow more foreign direct investment that is profitable. The success of the WTO would then be a crucial political battle for the capitalist class. Rakesh
Re: Enron and California: The Smoking Gun?
Steven, thank you for your many illuminating posts. This marking to market seems similar to the false revenue recognition by software firms which were seem to have thumbing their noses at SEC standards which differ for software and hardware firms. Aren't there a whole bunch of lawsuits against software start ups down there in the Valley for false revenue recognition? I would imagine that in these cases those with common shares will be left out in the cold; even those with preferred shares are getting pennies on the dollar, no? At at a time that profitability is already threatened and capital is being dissipated in military and police expenditures, it seems that the US economy can ill afford extraordinary legal expenses. I know VC firms are sitting on a $100bn or so, but I wouldn't think they'd like to see it go to covering enormous legal costs of their start ups. But hell what else are they going to do with it--create another NASDAQ bubble though led this time by biotech and medical equipment firms? rb
Re: Galbraith's new book on inequality
Has anyone read James Galbraith's new book *Inequality and Industrial Change*, a collection of essays by Galbraith and a variety of co-authors? Tom Ferguson gave me a copy of one of the chapters for which he was co-author, The American Wage Structure: 1920-1947, which I thought was excellent. I would like to read it. One of the findings of Galbraith's work that I find important--though I have not been able to convince any Marxist whom I know here--is the centrality of US success in monopolizing key technologies and thereby earning monopoly rents in improving the American position in the world market (Ernest Mandel however may jumped on this finding given his interest in surplus profits and technological rents). For example, Brenner attributes the US turnaround to post Plaza dollar devaluation and wage repression. It seems to me that US control over technological monopolies (in software, high end chip business, medical equipment, etc) has been more important, and these industries can remain competitive with wages which are high relative to the national and world average and without steep currency devaluation. Rakesh
method of economy
Michael Perelman had written: Nonetheless, neither simple nor expanded reproduction is entirely without interest. Both simple reproduction and simple value theory represented a significant theoretical advance over classical economics. For example, Marx's reproduction schemes laid the foundation for a more concrete investigation of a dynamic economy in the sense that they illustrate the difficulty of establishing the right proportions among sectors of the economy. In effect, Marx proposed an anti-equilibrium theory, which demonstrates that, unless certain unlikely conditions are met, the economy can experience a disproportionality crisis, similar, in some respects to the Harrod-Domar model. Had he gone no further, Marx might be remembered today as an interesting economist, but perhaps not much more. Michael puts the point extremely well here. I would like to point out that the first Marxist to have challenged the assumption of constant values in Marx's own schema, as well as Tugan's and Bauer's modified ones, was Henryk Grossman. Well Grossmann emphasized that Marx himself made a self conscious provisional assumption. Both simple value theory and simple reproduction presume either a static or at least, a proportionately expanding economy, implying that all relationships retain all aspects of their initial structure, including relative prices. Nobody would argue that Marx's schemes of simple reproduction were a realistic model of the economy, but only a conceptual device that demonstrated the weak foundations of the sort theory that Say's Law represented. Neither simple value theory nor simple reproduction was a mere mental exercise. Marx used both to analyze the contradictory nature of capitalism. In his Marxian economics (1979) Meghnad Desai gives an excellent, disequilibrium analysis of how Marx's schema show the many things that can go wrong on the value side and the use value side Despite their indisputable importance in this regard, both simple reproduction and simple value theory are inadequate for a more concrete level of analysis. And this is what Grossmann himself emphasized, and was the first to have done so. The limits of simple reproduction theory are easier to recognize than those of simple value theory. To acknowledge the limits of simple value theory does not minimize the analytical importance of this concept, any more than the unrealistic assumptions underlying simple reproduction theory invalidate the insights that the reproduction schemes provided. Although Marx developed enormous insights from simple value theory in the first volume of Capital?, simple values are inadequate for analyzing the dynamic economy that Marx analyzed in the later volumes. Certainly, Marx was interested in the dynamic nature of the economy. He saw himself as breaking new ground by realizing, Capital ... can be understood only as a motion, not as a thing at rest (Marx 1967; 2, p. 105). Before he could begin his dynamical analysis, Marx had to move beyond simple value analysis. Michael, i think i disagree with both you and Shortall that Marx had not broken from what you are calling simple value analysis in vol I. Of course, Marx had already moved away from simple value theory, even before he began his dynamic analysis. For example, he allowed for deviations due to different organic compositions of capital, although he considered that modification to be minor. A bit confused. What do you mean by simple value analysis? price assumed to be proportional to value or value assumed to be not continously changing? Do you mean by simple value analysis an assumption of proportionality or a static assumption? This transfer of value from capital goods to finished commodities is as unobservable as the process whereby labor values are abstracted. The question of abstract labor is instructive in pointing out some of the difficulties of quantitative marxian theory. I won't get into it here, but I agree emphatically. But this is why I have proposed the inverse transformation problem in opposition to Fred M's understanding that the value transferred can be identified with the visible flow price of the machine. If a tool is to be used over a fixed period of time with a known pattern of intensity, we can develop a rule to measure the rate at which the labor embodied in the tool is deposited in the flow of commodities. To argue for the realism of such conditions is tantamount to proposing some sort of rational marxian expectations. !!! ##[The] value [of a unit of capital] is no longer determined by the necessary labour-time actually objectified in it, but by the labour-time necessary either to reproduce it or the better machine When the machinery is first introduced into a particular branch of production, new methods of reproducing it
Re: Re: Re: Re: Re: Re: Re: Re: Re: RE: Re: :Premises, Circularities
I press serious objections and you respond by calling me a believer and flag waver instead of facing up to the fact that you have not provided compelling reasons for your very harsh negative judgement of value theory. I don't read your comments as a personal attack but as evidence of frustration on your part. What you thought was settled is in fact not. It's settled for me. I don't have time to think about everything. So, enjoy, i wish you luck. Am I bailing out? Yes. Do I care what you think of me for doing it? No. jks Justin, the only time I responded harshly to you was after you accused value theorists of being desperate and inward turning and then described the intent of value theory in a wholly superficial way. Other than that, I haven't assailed your personal motives or doubted your sincerity and willingness to discuss these matters rationally. But I suppose given how this list works--and that Michael P never reprimanded you as referred to us value theorists as desperate, inward turning true believers and flag wavers--I am to be blamed again for the acrimony on this list. I think you want me to think of you in abusive personal terms so as to justify how you proceeded in this discussion. No such luck. To be consistent you should be making the charges of metaphysics and illogic. OK, that too. The metaphysical charge is absurd on the face of it just as when Pearson made it against the Mendelians--that something is not necessary for calculation does not mean that it's not real and does not have causal force; the illogic charge could be persuasive however if the whole idea of taking fixed capital as embodying a quantity of congealed labor that can be determined prior to, and independent, of distribution, is shown to be impossible, and to be Marx's assumption as well. Of course this putatively Marxian assumption is shown to be untenable because of the possibility of negative values with joint production. It does seem to me that this is where the neo Ricardian can hit the hardest against Marx's theory of value. That I think the redundancy charge and the transformation problems are bogus does not mean I think things are settled. I say this not in hopes that you resume the discussion but to underline that I had been proceeding in this discussion in the exact opposite manner that you said I was. Rakesh
Re: RE: Re: Re: Historical Materialism
RB writes: Doug thinks Marx was an underconsumptionist; at the same Doug subscribes to the wage led profit squeeze thesis. DH writes: See, this is exactly what I was thinking of when I quoted Callari's observation that VT is a substitute for politics. I don't think you could ever prove this conclusively one way or the other using numbers. But in political terms, it's not the least bit ambiguous - the ruling class felt like it was losing control in the 1970s. Workers were sullen and rebellious, the U.S. lost the Vietnam War, and the Third World was talking about a new world economic order. As Paul McCracken's report for the OECD put it (and I wish I could find this exact quote again, it was a beaut), anxiety over inflation was inseparable from masses in the streets. The rebels were crushed. RB wasn't talking about value theory [VT] above. Instead, he's talking about a specific crisis theory. That's a different (lower) level of abstraction than VT. --JD thanks for the clarification. here is something from Felton Shortall that attempts to integrate the two levels (Jim may be interested in this book the Incomplete Marx. Avebury, 1994 because it complements Michael Lebowitz's argument re: the missing book on wage labor): Of course intra industry competition will tend to depress depreciation charges and hence the imputed value of fixed capital. But only to a small degree. If capitals were unable to sustain the imputed value of their fixed capital no one would risk investing in any industrial capital which had significant proportion of fixed capital, since if they did they would face the prospect of the devaluation of their capital far outweighing any prospective profit. With all the capitals in a particular branch of industry in more or less the same boat, the formation of the market value will tend to impute the industry's average historic value of fixed capital. With the preservation of the historic values of fixed capital the devaluation of capital due to the increasing social productivity of labour becomes deferred. But this gives free play to the effects of the rising organic composition of capital on the general rate of profit. As capital accumulates on the basis of historic values the rate of profit will decline. Sooner or later the critical point is reached. Capital has accumulated to such a degreee that it has become a barrier to its own self-expansion. Profitable accumulation is at an end. But this is only on the basis of historic values. If capital was evaluated ont eh basis of replacment values, if the deferred couneracting effects of rising productivity of labor could be brought into play, the rate of profit culd be restored to health and profitable accumulation resumed. Indeed this is the way capital is able to overcome the falling rate of profit as a barrier to further accumulation. Through rupture and crisis the long pent up devaluation of capital is released all at once. The old structure of historic values are forcibly reduced to that of the new. But this does not only mean the simple devaluation of capital, but also its widespread destruction; its devalorization, bankruptcy and ruin. p. 404 Yet Shortall seems to me perhaps too sanguine about the ability of rupture and crisis to restore in themselves the profitability of capital! Rakesh
Re: Re: Re: Re: Re: Re: Re: : Value talk
You still don't get it. Even if there is enough demand takes up 100% of the production, the profitability drops because the stuff can be produced cheaper, but the firms who invested in the oldertechnmologies have these huge sunk costs taht they cannot nake back. Still don't understand how we move from the difficulties these backward firms face to a fall in the average rate of profit for capital-as-a-whole. I don't know wwether the rate of profit does tend to fall. This is a vexed empirical question. But I can see an argument based on the above that it might, though it would take some additional assumptions. Justin, It's not a vexed empirical question for Brenner, though Shaikh raises questions about how the capital stock is measured; but for Brenner and Shaikh and Moseley, the rate of profit did fall, and fall hard, esp for Brenner between approx. (if I remember correctly) 65-73 for US capital. Charles has to re-read Perlo; Justin, you have to re-read Brenner! I do think there has been progress in reworking official data from a value perspective (criticism of wage led profit squeeze thesis carried out by Shaikh and Moseley), I have studied Shaikh's work, and I think some of his criticisms are valid, but can be expressed without the value theoretic commitments. I'm an overproductionist a la Brenner myself. That's not the point. The question is whether profit to wage is a proxy for s/v. the answer is no; the data have to be reworked. That required new work by value theoretic Marxists. value theoretic analysis of the role of the interventionist state (Mattick, deBrunhoff), I think you overrate Mattick, though he's not bad. well thanks but I overrate--a peculiar word, I must say--Mattick along with the old Root and Branch collective, Moseley, Shaikh, Tony Smith and even O'Connor (who develops a contrary theory). Michael Perelman makes favorable references to PMSr, so does Robt Lekachman for goodness' sake. I also don't think you need value theory to say what he says. Fisk's The State and Justice makes some of the same points without the value theory. In encouraging a political theorist friend to become a Marxist years ago, I lent her this book; it's good news I suppose that I never got it back. But as I remeber Fisk does not have a theory of state debt as accumulation of fictitious capital. And I have behind me a book by Fisk on Value and Ethics, though I have not read it--it's not about labor value is it? Hasn't Fisk recently written on health care like pen-l's Charlie Andrews? analyses of the world market and unequal exchange (Amin, Bettleheim, Sau, Dussel, Carchedi), This stuff I don't know ell. I should have thrown in Tilla Siegel. value based investigations of the labor process (Tony Smith), You left out Braverman. But I think,a gain, that the argumebts do not require value theory. Tony Smith's arguments are rooted in value theory, so he does not share your estimation. Let's see if we can ask whether his best arguments are free of value theory? attempts to undertand non commodity, fiat and near money (Foley, Gansmann), I don't know this. And I should have added latest book Political Economy of Money and Finance by Makoto Itoh and Costas Lapavitsas and Makoto Itoh and last chapters in the new book by Alfredo Saad Fihlo The Value of Marx: Political Economy for Contemporary Capitalism. And there is some very crystal clear work by Martha Campbell and others in the International Journal of Political Economy. Oh, and I forgot the whole value theoretic analyses of the state (Holloway and Picciotti as well as Williams and Reuten). attempts to understand share capital (Hilferding, Henwood), Henwood's not a value theorist, are you, Doug? Good question. value based phenomenlogical studies of time (Lukacs, Postone), I know Lukacs inside and out, and I think tahtw hile he is abstractly commited to the LTV, his analyses do not presuppose value theory at all. I would answer that Lukacs' analysis is based on the Marxian concept of abstract labor if this is what you mean by abstractly committed. More importantly, Postone's theory is value theoretic through and through, and I would not consider his accomplishment degenerate, unless we mean degenerate in a good way. Haven't read Ben Fine's recent value theoretic critique of human capital theory either. Some and some. On the whole, I stand my my claim. A lot of smart people have used the framework. I don't see that their best work depends on it. Well you should certainly not be stopped from doing your best work on a value free theoretical orientation based on some combination of Marx, Robinson and Brenner, and Ian of course is free to develop his own theoretical orienation on the basis of the viewpoints that he is trying to put together which seem to be united in only aspect--they are not value theoretic. Yet some of us will stick to value theoretic Marxism because we
Re: Re: LOV and LTV
And how could Marx define the absolute general law of capitalist accumulation in the way he does in Ch XXV if his theory of value was not a) dynamic b )systemic? Mine is not an overimaginative reading of the overall thrust of Marx's approach, (although unimaginative readings of Marx's theory are more than possible). Chris Burford Not at all Chris. I was suggesting that my definition was limited, in need of supplmentation because it did not capture the meanings on which you are rightly focused. Rakesh
Re: Re: Re: LOV and LTV
Christian, Can't follow what you're getting at. Please restate. Rakesh, Let me try this definition (open to revision of course): Value is the socially necessary abstract labor time which potentially objectified in a commodity has as its only and necessary form of appearance units of money. This is what I meant yesterday by debt and wages as the terms of capital depreciation. Well that's not what I mean since I still don't understand what you are saying. If I were being polemical, I might ask how you know that money always distorts value if you have no other measure of it. What's the problem? It seems to me that you accept that what is the reference to that? as a first principle, based on the existential description of class antagonism. But I wonder if this distortion always takes the same shape: is the value produced by the LA Lakers distorted in the same way as that by the workers who prep and clean the Staples center? I don't think so, although you could argue that what's being distorted is the snalt, not subjective labor time. Wage differences (like wages themselves), you might say, express this distortion. But then you're left explaining how Shaq's and Kobe's wages, as representations of surplus value/snalt are only in _appearance_ (since that's what wages are) different from those of the staff at Staples--in principle, they really aren't different; there's still extraction of surpl! us! value;, it just looks like they have better lives because their are multimillionaires. Then what? Christian
Re: Re: RE: Re: : Premises, Circularities
So Ian seems to have taken Blaug's word for it. I took this to mean that the quest to get a price theory out of KM's theory of value was a mistake. Marx was not interested in an equilibrium price theory (Mattick's chapters in Marx and Keynes are good as are Korsch's chapters in Karl Marx). He was interested in showing, contra Malthus, the formation of an average rate of profit not only does not contradict the law of value its magnitude can in fact be explained on the basis of surplus social labor time extracted by the capitalist class from the working class. Marx criticizes Ricardo for taking an average rate of profit as a given and then attempting to save the law of value in spite of it. This led to disaster in the works of Ricardo's followers (MacCullough, sp.?). Marx attempts to develop the average rate of profit and thereby the price of production step by step out of the law of value itself. But this conceptual development has unforseen consequences: it turns out the proletariat is exploited as a class by the bourgeoisie as a class. For expressed in this thing--the price of production--is the growing antagonism between the two major classes, an antagonism raised to the level of society as a whole. This is obviously not a price theory, but a theory of revolutionary social contradictions which can be grasped by the working masses. And this is why there will be no retreat from attacks on Marx's so called transformation procedure; the stakes are much too high. There is also a further development of the SNALT, as Mattick Jr has pointed out. Price of production is of course a transformation of value, for we find that in a bourgeois society, no commodity is produced unless capitals can receive (tendentially) the average rate of profit by doing so. The price of the production is a socially necessary condition for its supply. That the social labor time that a commodity has to represent is given by price of production rather than its value reveals capital as a collective social power, as each capitalist participates proportionally in the total social capital which as Marx wryly observed makes communists out of the capitalists. But at the same time Marx is clear that prices at best oscillate around these prices of production because every step towards the equalisation of profit rates is disrupted by a step away. In quoting KM I was pointing to that section of Capital which seems to be what led many commentators to start their explorations of the causal relationship[s], if any, between values and prices. Yes the causal relationship is that non wage income is limited by the surplus social labor time extracted from the working class as a class in the process of production, though of course not all value and surplus value will be necessarily realized due to disproportionalities, underconsumptionism being one form thereof. Since those relationships are empirical they are in constant conjunction, issues of non-equilibrium, non-linearity, convergence and divergence aside, no? If they're not in constant conjunction how can any quantitative model even get started to track the dynamics so that the results can serve as data in need of explanation? well what's wrong with Marx's simple transformation tables. They show how the value extracted from the working class (v+s) can be distributed in such a way as to erase from bourgeois consciousness the collective exploitation of the working class and give rise to the fetishism of capital. Samuelson's eraser theorem is the correlative of the fetishism of capital. To that extent KM was caught up in Ricardo's quest for an invariance condition/measure for the theory of value. Please Ian, Marx spends pages arguing that Ricardo's quest was bound for failure, though as a purely methodological device in his theory he assumes the constant value of money, thereby ensuring that all changes in price happen on the commodity--rather than the money--side of the equation. Rakesh
Re: Historical Materialism
Historical Materialism by Justin Schwartz 07 February 2002 05:59 UTC As we've all been remiss in pointing out until now, the most powerful critique of Capital -- in the last decade at the very least -- makes no use whatsoever of value theory. What is missing from that book.Wall Street, that value theory would make substantive improvements on? well, we have it from very wise people that you can't begin to understand or explain capitalism without value theory, we're stucvk at the level of mere ecletic phenomenal static description. Sorry, Doug. jks ^^^ CB: Actually, you can begin to explain capitalism without value theory, you just can't get anywhere near finishing explaining it without value theory. Isn't value theory a premise of Doug's book ? Doug thinks Marx was an underconsumptionist; at the same Doug subscribes to the wage led profit squeeze thesis. Doug's an eclectic. Doug's hostility to value theory derives in part from his rejection of the significance of the Yaffe, Shaikh, Perlo, and Moseley finding that despite the so called wage led squeeze on profits, s/v has had a tendency to rise throughout. Doug thinks his theory is radical because it imlies that since the working class had the ability to choke the profitability of the working class it may have the power to overthrow the capitalist class. But there are empirical problems with the wage squeeze theory raised by Fred and others, and I don't think Doug has even recognized them. And I won't here get into why the implications are not as politically radical as Doug thinks. Moreover, that capital accumulation depends on a rising s/v does in fact disclose the limits of this mode of production since as greater difficulties are faced in raising the rate of exploitation, the system comes to itself depend on convulsive crises by which as a result of the destruction and devaluation of capital the value composition of capital can be readjusted to the rate of exploitation such that accumulation can resumed and the realization of surplus value thereby ensured. On the basis of value theory, it is clarified that the capitalist way out of crises is not putting more purchasing power in the hands of workers or simply increasing the rate of exploitation. If the system as a whole cannot be put right even through a protracted crisis, then one capital survives ever more only at the expense of another, yielding slaughterous destruction in the world market and the political tensions to what gives rise. Barbarism or socialism. RB
Re: Re: Re: Re: Re: RE: Re: : Premises,Circularities
As is always the case with these debates, I can't resist the urge to ask - so what? Why is the value controversy so important? Why is it so important for Justin to reject it and Rakesh to defend it? This started with a brief remark. Then someone asked me to explain why I reject the LTV. Then the roof fell in. Rakesh wouldn't even let me back out of a discussion that (to be frank) doesn't interest me much. I did spend some time on value theoey, came to the conclusions I've had to adumbrate here, and never even wrote much on it because it was evident to be that the only pepople who werereally interestedw ere the true believers, and I wasn't going to persuade _them_. So, I agree, it's not that important. A contemptuous comment. You're not persuading us not because we are true believers but because your reasons (redundancy, transformation problem) are not as strong as you think they are. Rakesh
Re: Re: Re: Historical Materialism
Doug writes: Doug thinks Marx was an underconsumptionist; at the same Doug subscribes to the wage led profit squeeze thesis. See, this is exactly what I was thinking of when I quoted Callari's observation that VT is a substitute for politics. I don't think you could ever prove this conclusively one way or the other using numbers. prove what? problems were surely overcome not by increasing the purchasing power of the working class, against your sometimes underconsumption theory predicts. But in political terms, it's not the least bit ambiguous - the ruling class felt like it was losing control in the 1970s. Workers were sullen and rebellious, against rising rates of exploitation or wages not keeping up with value of labor power perhaps in part as a result of greater tax reductions. the U.S. lost the Vietnam War, leading to inflationary pressure in the process that threatened workers. and the Third World was talking about a new world economic order. the terms of trade had turned against OPEC in the 60s; the embargo was as much a defensive as offensive action. As Paul McCracken's report for the OECD put it (and I wish I could find this exact quote again, it was a beaut), anxiety over inflation was inseparable from masses in the streets. The rebels were crushed. Doug Which should have led to a much greater recovery in the profit rate than it did if profits/wage ratio was the main independent variable, as you imply when you're not focused on the problem of too high a s/v realizing in Dept II output for which there is insufficient consumer demand. That the crushing did not lead to a full restoration of profitability underlines the importance of the vcc and u/p labor ratio which you want to junk. At any rate, what value theory explains is why this barbaric repression of the working class-- as well as the destruction and devaluation of capital in part effected by Volcker's bankruptcy-inducing high interest regime and regressive tax reform at the expense of social darwinist social policy and the turning of the terms of trade against raw materials producers-- restored profitability (though only in part as Fred M emphasizes) and renewed capitalist accumulation (such that it was). That this is the capitalist way out of crises is explained on the basis of the law of value. Rakesh
Re: RE: Re: Historical Materialism
Charles Brown wrote: Isn't value theory a premise of Doug's book ? Doug writes: If you mean that workers produce everything of value (in conjunction with some goods supplied by nature), and that much division and redivision of the spoils goes on, and that finance can obscure those fundamentals, yes. If you mean the rest of it - OCC, the transoformation problem, the distiction between productive and unproductive labor, etc. - then no. Damn waste of time, I say. The rising OCC theory seems a waste of time except those specifically interested in crisis theory (and the dogmatic version is just a pain, like all dogma), except that it illuminates what is plain for all to see--the importance not greater purchasing power as a 'solution' and/or solution but of the destruction and the devaluation of capital in the restoration of profitability, accumulation and therefore the realization of surplus value. rb
Re: Re: Re: RE: Re: Historical Materialism
Rakesh Bhandari wrote: except that it illuminates what is plain for all to see--the importance not greater purchasing power as a 'solution' and/or solution but of the destruction and the devaluation of capital in the restoration of profitability, accumulation and therefore the realization of surplus value. Liquidate liquidate liquidate - this is Mellon and the prophets! Doug But even Mellon here belies the optimistic faith, soon to be shattered, that society can master its own crises as long as there is no political interference with sharp and short downturns. Yet as Adolf Lowe remarked after the world war the crises intrinsic to the capitalist system have lost their virulence; but if we consider an international destruction of value like the world war as the modern form of crisis in the age of imperialism, and there is much to be said for the view, there is little room for extravagant hopes of 'spontaneous stabilization.' Quoted in Mattick, Economic Crisis and Crisis Theory, p. 120 Doug, as I understand value theory, there is a prediction of an inevitable dialectical proces of disturbances, contradictions, and crises--not an absolute, purely economic impossibility of accumulation, but a constant alternation between the overcoming of crisis and its reproduction at a higher level until the destruction of the underlying social relations by the working class or the self-emancipation of peanuts. rb
Re: Re: Re: Re: Re: Re: Re: RE: Re: : Premises,Circularities
A contemptuous comment. R, this is not the first time you have taken my rejection of your pet theory as a personal attack. In the world of scholarship, it is normal for people to disagree sharply about fundamentals, and even to think the ideas and reserach programs of others as fundamentally misguided, without taking it personally. What do you think about my Hayekianism? No doubt that I have my head screwed on backwards. I don't take it personally as long as you press serious objections. I press serious objections and you respond by calling me a believer and flag waver instead of facing up to the fact that you have not provided compelling reasons for your very harsh negative judgement of value theory. I don't read your comments as a personal attack but as evidence of frustration on your part. What you thought was settled is in fact not. You're not persuading us not because we are true believers but because your reasons (redundancy, transformation problem) are not as strong as you think they are. Perhaps not. My fundamental objection is that the program isn't going anywhere. I think it's a waste of time. Justin, which alternative is going somewhere? But I also think that a lot of people--maybe you--are attached to it not because it's so explanatiorly powerful, but because, as Doug says, it's a sort of a pledge of allegience to the red flag. This is indeed a contemptous response since I have taken the time to say what advantages in terms of clarity (Marx's transformation procedure is easier for the working class to follow than Sraffa's simultaneous equations with a standard commodity as the numeraire) and realism (even if we don't need genes and labor value to calculate, we include them in the interests of better grasping the actual process which is not that of inputs turning themselves into outputs) and scope (ability to integrate money) are gained by Marx's value theory while the objections (redundancy, transformation problem) are not compelling. You are in fact most often saying that value is not needed--which is a claim that does not really justify your harsh judgement. To be consistent you should be making the charges of metaphysics and illogic. If you want we can deal with joint production and negative values in following up on moral depreciation. rb
Re: : Value talk
Justin writes: . Or (2) (as Rakesh suggests) there is athe moral deprecaition line, the idea that value explains crisis. Crisis is explained on the basis of the law of value, not by reference to moral depreciation at all. In fact I did not suggest that moral depreciation explains crisis at all. I underlined that it helped to explain why machinery has not seemed to fufill its task of reducing the torment of labor. You simply are not reading carefully. And you haven't yet proposed an alternative set of concepts by which to understand moral depreciation. As I have shown here by restating the argument without reference to value, and as Brenner has shown in greater length, value does no work in this story. Have you followed any of the criticism of Brenner's theory? There may be a great loss in moving from value theory's explanatory focus on the vertical relations of production, the relation of dead to living labor in the abode of production, to a focus on the horizontal relations among capitals in the realm of circulation; there have been questions whether Brenner's repudiation of the wage squeeze explanation is consistent with his Okishio-inspired argument that a falling rate of profit does in fact require an increase in the real wage; it's not clear that Brenner has been able to explain why overcompetition reduced mark ups more than costs; it's not explained why effective demand becomes too weak for all commodities to be realized at value (again it seems to me that Brenner is implying that as a result of international competition the commodities of weaker capitals could not be realized at value, which seems to point in the way of protectionism, not workers' revolution; and leaves open the question of whether there are limits to accumulation even on the assumption that all commodities can be realized at value); it's not sufficiently elaborated why the exit of inefficient capitals has been so prolonged ; the US competitive position--especially in those industries that James Galbraith defines as high value, that is a high ratio of profits, wages, and salaries to worker--was maintained or regained with the dollar picking up and wages high (especially in those high value industries), so there are empirical problems with Brenner's account of the sources of the renewed strength of US capital in particular. This is just what I remember from our previous exchanges. I am not even looking at the file I have on this second Brenner debate. rb
Re: Re: RE: Re: RE: Re: Re: Historical Materialism
I don't accept GET. I'm basically a Robinsonian/Kaleckian institutionalist with a large dash of Austrian thrown in for spice. In her essay on Marxian economics, Joan Robinson attempts to point Marx's crisis theory in the direction of the kind of underconsumptionism that Sweezy was developing and Devine would later elaborate. You should understand that Brenner is a forceful critic of such underconsumptionism. So what it is that you are saying, Justin, is really not quite clear at all. rb
Re: Re: Re: : Value talk
Justin wrote No doubt I am careless and illiterate, also lazy and stupid. I do see how moral depreciation offers a theory of crisis. yes you are right. It can play a role in a theory of crisis. But it not what I was trying to explain in terms of it if you are interested in conversing with me. I don't seewhat value talk adds to it. I don't understand how else to conceptualize moral depreciation. Perhaps the tradition to which you are committed does a good job by dealing with fixed capital as a joint product? I don't know. It is a genuine question. As I have shown here by restating the argument without reference to value, and as Brenner has shown in greater length, value does no work in this story. Have you followed any of the criticism of Brenner's theory? No. I have a full time nonacademic job and a family. Value theory, and indeed crisis theory, is a distinct sideline interest for me. Cmon Justin, you spent years thinking through value theory, and you have very strong opinions. In fact one could easily have the impression that you think value theorists are desperate and inward turning. I'd rather think about legal positivism, democracy, or, closer to home, judicial admissions under a 12(b)96) motion to dismiss. There may be problems with Brenner's view, and it no doubt doesn't explain everything. same with many views of Marx or anyone else. Still, I think it is basically right. Well these are all debates we had on LBO long before all the published critiques by Glick, Dumenil and others. You were then on LBO; check the archive. We had this argument. Upon first reading, I was saying very loudly and in no uncertain terms that Brenner was wrong to make competition the explanatorily fundamental variable; that fraticidal competition, break down of co-respective competition had to be explained in terms of difficulties in the production of surplus value for capital as a whole for that is what would slow down the rate of accumulation and therewith effective demand such that there would be violently competitively exclusive attempts to realize the surplus value that had been produced. Competition was result, not cause. I said then that Brenner had no theory of why effective demand had proven insufficient for the realization of commodities at value. He won't take the underconsumption line from Bauer to Sweezy to Robinson to Devine.I (unsurprisingly) took a straight Grossmann line. Tony Smith recognized the force of such an argument a year later in Historical Materialism. Even Glick and Dumenil who had in their earlier work taken competition to be explanatorily fundmanetal found themselves challenging Brenner. Bonefeld, Lebowitz and many others have recognized the same problem. As I say,I'm lazy and illiterate and careless when I do read, so I'm going to go on thinking that until something large hits me on the head. How will you know when you have been so hit? RB
Re: Re: Re: Re: RE: Re: RE: Re: Re: HistoricalMaterialism
No doubt I am unclear. However, it is possible to accept some of an author's views without accepting all of them. I urge this in the case of Robinsin, marx, and Brenner. jks Urge all you want. It does not mean that they can be coherently put together. And Michael P: please note that I did not myself call Justin Schwartz illiterate, stupid or lazy. I did not flame him. He flamed himself after sending twice the number of messages to pen-l this week that I have. rb
Re: Re: Re: Re: Re: : Value talk
You still don't get it. Even if there is enough demand takes up 100% of the production, the profitability drops because the stuff can be produced cheaper, but the firms who invested in the oldertechnmologies have these huge sunk costs taht they cannot nake back. Still don't understand how we move from the difficulties these backward firms face to a fall in the average rate of profit for capital-as-a-whole. A degenerating research program often doesn't have a single fatal flaw. It just runs out of steam, spends all of its time trying to fix up internal problem, doesn't geberate new hypotheses and predictions and theories. I think that is a pretty good description of what has happened in Marxian value theory over the last century. You must realize that this is not an argument but an evaluation that comes across as an insult and fighting words. I do think there has been progress in reworking official data from a value perspective (criticism of wage led profit squeeze thesis carried out by Shaikh and Moseley), value theoretic analysis of the role of the interventionist state (Mattick, deBrunhoff), analyses of the world market and unequal exchange (Amin, Bettleheim, Sau, Dussel, Carchedi), value based investigations of the labor process (Tony Smith), attempts to undertand non commodity, fiat and near money (Foley, Gansmann), attempts to understand share capital (Hilferding, Henwood),value based phenomenlogical studies of time (Lukacs, Postone), clarification in differences of underconsumption, disproportionality and frop crisis theories, development of a theory of oil rent and rentier states (Bina). I think Justin is making a strong evaluation without having carefully evaluated above work. Rakesh
Re: Re: Value talk
In response to Christian: As a result of moral depreciation, the older means of production as use values have not changed; nor has the concrete labor embodied therein changed. What changes is the the aliquot of homogeneous, social, and abstract labor time represented by those means. The key here is the duality of labor--Marx's key discovery. Actually, the abstract labor time hasn't changed either. What's changed are the means to realize or represent that time--which is now wasted or sunk. I would argue that the value of the morally depreciated means has itself changed, which does not mean of course that the sum of money that the capitalist class laid out for them has changed. The terms for that realization are wages and debt. don't understand yr point. Are you saying that wages and credit lines have to be sufficient for the surplus value that has been produced to be realized? Are you saying that the full value of older equipment can be realized if demand is strong enough? Are there any limits on the autonomous creation of demand? And even if value and surplus value are fully realized, profitability can still founder due to more fundamental difficulties in the very production of sv, and firms may then not make use of the lines of credit that they have and in this uncertain environment workers will not use their available credit either. The problem would then not be insufficient credit and purchasing power. The problem would be that there would be no use of the credit and purchasing power that are already available. We can explore the connection between this critque of underconsumption with Keynes' liquidity trap, along with the relation between Marx's falling profit rate and Keynes' marginal efficiency of capital and the relation between Marx's theory of accumulation and Keynes' effective demand. Of course our bourgeois Macroeconomic textbooks don't do us the favor. Even the radical Keynesian ones. At any rate, I would think a Marxist would keep the analytical focus on growing problems in production and the class struggle therein rather than in difficulties in the realization of surplus value in terms of inadequate market based demand. Why would we want to give an analytical focus to our theory that complements bourgeois economics' obsession with exchange relations. Luxemburg made a mistake, I think, in seeking the limits of capital in the market. But you can explain this without reference to values, can't you? maybe, i am asking how. If you begin with money (as below), there's no reason to keep value in the equation, unless you (a) buy into Marx's moral taxonomy of credit money (fictitious capital--the mother of all insane forms, a fetish, money breeding money, etc.) don't follow. or (b) reserve value as a ground for the class-existential analysis of capital's limits. the system finds its historic limits in workers' turning their resistance to the extraction of their surplus labor time in the process of production to a revolutionary struggle. It is possible however that the system will annihilate both classes or (I suppose) that a managerial mode of production could replace the capitalist one. Neither of these seem necessary to get at the baleful effects of capital, which seem pretty evident even in the enchanted world we live in. Though not properly recognized in equilibrium theories. As per the crisis thing: I'm not quite sure I get why Marxists think it's an accomplishment to predict repeated crises. because it provides an explanation unlike GET? Anybody can do that--in fact, most leftists--save maybe Doug and Anwar Shaikh--have been predicting recession, depression, or financial calamity for the past 5 years. So what? We are talking about the underlying explanation, not reading tea leaves. As a defense of a theoretical model, this seems pretty weak, since (a) hardly anyone gets the timing of the crisis right (ie Brenner, whose (great) work has been pointing to the big one since 1997), it's not possible to do so. a theory can be explanatory while not being predictive in the strict sense that you indicate. and (b) in the absence of that what you give is the stern policy advice to flush the whole system, cause capital will always produce crises. who's advising policy makers? Again, so what? At least in theory, what social dems like Godley and Izuretia have going for them is that they think there are ways of mitigating, though not preventing, crises. If they think the major problems in the capitalist system (unemployment, intensification of labor, wipe outs of workers' savings) will be solved once we social democrats convince US policy makers to run up the federal debt to 50 or so % of GDP (unlikely that we could; and surely counterproductive if we were successful), they are no less crackpot realists than those who imagine that we will indeed live in a complex social system not based on the
Re: LOV and LTV
As with most definitional debates or what seems futile hairsplitting and mere semantics, the hope is that clarity as to definitions will help prevent confusion and mutual incomprehension at a later stage in the debate. For example, I think much of the debate in value theory could be more productive if participants were clear about how surplus value is defined. Let me try this definition (open to revision of course): Value is the socially necessary abstract labor time which potentially objectified in a commodity has as its only and necessary form of appearance units of money. I believe that this definition follows from the simple fact that in an atomized bourgeois society in which social labor is organized by private money-making units social labor time relations can only be regulated in and through the exchange of things, however value is in fact misrepresented by this mode of expression. In capturing Marx's quantitative and qualitative sense, one should probably build money and fetishism into the very definition of value. This will help to clarify that Marx is not simply qualifying Ricardo's definition of value but stipulating a new meaning. This definition of course does not capture the systemic and dynamic features which Chris B is attempting to build into his definition. Of course a serious problem with my definition is that it may imply that units of money come to define the objectified social labor time that is socially attributed to a commodity, rather than money price being an expression of the socially necessary abstract labor time objectively needed for the reproduction of the commodity. While I would agree that monetary measurement is not merely a passive ascertainment of a preexisting attribute and specifically that value is not actualized without successful money sale--that is a value must prove itself to be a social use value--the value that is expressed in exchange value is based on the objective social labor time that is in fact needed to reproduce the bulk of such commodities though as Marx emphasizes this value is in fact necessarily mis-represented in exchange. rb
Re: Re: Re: Re: Re: Value talk
Justin, a short reply. the disallowing of qualitative change in outputs and inputs and setting them equal in price by assumption seems to make analysis inherently static. This is why these assumptions are hotly contested. As far as I can tell, this is just a way of reminding us that any commodities out there are the product of labor, an important point, but npt necessarily one concerning value. yes Shaikh is reminding us that inputs do not magically become outputs without the toil and misery of real labor. There is no production of things by things. There are outputs because labor has been materialized therein. And the outputs that we have both in variety and quantity are those that have proven to be socially necessary in and through exchange wherein the expansion of value is culminated. The technical conditions of production do not themselves yield a surplus and the technical conditions are themselves determined socially: Value--socially necessary labor time--determines the technical conditions of production Thus both 'inputs' and 'outputs' are the use forms of materialized value, and we can they say that in the *real* process it is values that determine the physical production data... That's very fast. Why are these determined by value, SNALT, merely because they are produced by labor over a period of time? The input means of production are not values simply because they were produced by labor-- my home cooked pooris are not values. The input mop are values because they proved to have represented socially necessary abstract labor time in that they ex-changed for money at the commencement of the circuit of capital. Yet though values, the means of production do not automatically transfer their value to the output; any idle time threatens the moral depreciation of those means of production--such that they will represent a lesser quantity of socially necessary abstract labor time. The very threat of moral depreciation underlines that we are not dealing with a technical process, plain and simple, but a social process in and through which socially necessary labor time is determined. As John Ernst recently pointed out, it is the ongoing threat of moral depreciation--that is, the loss of the value of the means of production--that compels capitalists to agonise the working class; the most powerful means for the reduction of toil and trouble become the surest way of prolonging and intensifying the working day. Without the theory of value we are are not conceptually prepared to understand the most disturbing paradoxes of capitalist development. Rakesh Pearson after all thought that he could develop a purely descriptive/phenomenalist theory of heredity by making linking the character of an individual through regression equations to the average character of each ancestral generation. I don't knwo what Sraffa had in mine, but that isn't my interest. However the quanities I want to posit should exist and be useful. Similarly I am saying that the physical production data do not themselves determine the profit rate, though they can be used to calculate it. But you, and Shaikh, have shown that SNALT does determine it. Why do we need references to genes when we can quantitatively link generations with data of ancentral heredity? Why do we need labor value when we can calculate the profit rate with data of physical production alone? It is in the interests of realistically grasping the actual process that our theories should refer to genes and labor value. Justin, I would think then that your commitment to realism (at least at levels above the subatomic one) would have you argue in favor the theory of labor value? Well, I'll even be a quantum realist if someone shows us how. Maybe the many worlds interpretation is true. But my realism is a Arthur-Finean, case-by-case, pragmatic realism; I'll quantify over whatever our best science says there is. I'm not convinced that our best science says the LTV is true, or that SNALT by itself determines prices and profits. jks _ Get your FREE download of MSN Explorer at http://explorer.msn.com/intl.asp.
Re: Re: Re: Re: Re: Re: Re: Value talk
R, I think we have reached the point of diminishing marginal returns. I agree with Fred Guy: the work on the LTV for a century has been a desperate, inward-turning attempt tos how that it can be made coherent in the face of increasing masses of fatal objections, and it's not doing real work. It's at most a heuristic for--and not exaplantrion of--the importsnt points you make, that commodities are the products of labor, and that any society has to make large scale decsiions about hwo to divide up its socially necessary labor. But I think we have a stand off here, and probably should move on. jks Justin, you expect us to move on after you characterize my attempts as inward turning--this is exactly what the Marxian law of value is not! And these are not the points I am after, as should be clear to you after years of debate. There is a willful ignorance on your part that is disturbing to say the least. You are trivializing what the law of value is meant to explain so that you can walk away from it without loss. This is in fact dishonest. And please do not use the hot and heavy rhetoric unless you can explicitly name the fatal objection. We were dealing with the redundancy charge which even if true is not by any means a fatal objection, for all it shows in itself is that calculation by value is inconvenient and derivative. Even Sen doesn't think much of the charge on which you seem focused. You have yourself killed no thing in this discussion. Or do you really think GA Cohen's piece on the labor theory of value is definitive? Moreover, note that I raised the question whether and how any theory other than labor value makes sense of moral depreciation and the paradoxes to which it gives rise. You give no reply. And we need to be clear yet another thing. Freudianism and Marxism would clearly be falsifiable if people were not to act irrationally and capitalist development were to crisis free, respectively. As Grossmann demonstrated, the law of value finds its confirmation not only in the recurrence of general, protracted crises but in its accurate prediction of (and specification of) the kinds of techno-organizational changes that are needed by both individual capitals and the capitalist class-as-a-whole for an exit from crises of a general and protracted type. The law of value which was applied by Mattick Sr to the accumulation of fictitious capital in the form of govt debt was confirmed by mixed economy going up in stagflationary ashes and by the limits of Keynesian intervention since then. The law of value is not confirmed at the level of exchange ratios but rather more like the law of gravity is confirmed when a house falls on one's head. Rakesh
Re: Re: Re: Re: Re: Re: Re: Re: Re: Value talk
I thought I was pretty mild. Referring to your interlocutor as desperate and inward turning is clearly not mild, but I suspect that I shall be blamed for the rancor on the list as I was supposed to take the heat for Paul Phillips' explosion. Moreover, note that I raised the question whether and how any theory other than labor value makes sense of moral depreciation and the paradoxes to which it gives rise. You give no reply. Haven't really thought about it. but this was my reply to your query. Yes of course the input means of production can be said to embody/represent indirect and direct labor time, you concede, but why does this make them values, you seemed to ask. And my reply was that their character as values is revealed by the threat that they will undergo moral depreciation, i.e., come to represent less socially necessary abstract labor time, and the compulsion the ruling class puts on the working class to consume them before they are morally depreciated. This is how Marx explains what puzzled JS Mill: the best tools for the reduction of labor become unfailing means for the prolongation and intensification of the working day. Marx explains this puzzle by understanding these means of production as values-in-process, not simply given technical conditions of production. A fallacy: Your theory preducts that there will crises. The theory posits X. There are crises. So X exists. I have argued, however, that the main lines of the theoey can be reconstituted without X and still give us the same results. You're not reading carefully. The theory explains both the recurrence of general, protracted crises and the means by which they are overcome. The law of value thus pits so called orthodox Marxists against underconsumptionist social democrats. Also, I note that Marxisn crisis theory is highly underdeveloped, and IMHO the best version of it, Brenner's, does not use value theory. Anyway, I'm plum tuckered out. Does Brenner agree that he does not use value theory? As far as I can see, he is in part saying that the full value of commodities could not be realized due to international competition. But Marx's crisis theory is able to explain the onset of crisis even when demand is strong enough for commodities to be realized at their full value. rb
Re: Re: RE: Re: RE: Re: RE: Re: LOV and LTV
Title: Re: [PEN-L:22419] Re: RE: Re: RE: Re: RE: Re: LOV and Why is domination functional for increasing exploitation? The answer highlights a third problem with Roemer's argument which turns on a crucial assumption of his models. In these what workers sell is labour, not labour power, or, equivalently, labour contracts are costlessly enforceable (1986b, 269). This is a consequence of the Walrasian assumption that there are no transaction costs, including those of contract enforcement, i.e., that markets are 'complete'. But this assumption is not a minor technical issue. Its effect is to undermine domination as an ethical reason for interest in exploitation by calling into question the explanatory interest simpliciter of domination. Marx argues that workers sell labour power, their ability to work (1967a, 167-169). Justin, this is extremely well put, though it leaves us with the task of reconstructing Marx's logic. How is it that Marx discovers on the island of free wage labor (i..e, workers own no means of production) that the proletariat alienates labor power rather than (as it seems) labor time? rb
Value talk
Justin writes in regard to moral depreciation: . I don't see why the LTV has to be true to explain this. I have never denied, nor does the the most orthodox bourgeois economist, that if you can save labor costs by adopting a new production technique, that people who have sunk costs in onld labor intensive production techniques are going to have trouble making money. But we don't have to talk about value, least of do we have to say that value is a quantity measured by SNALT. But you just described the whole loss from moral depreciation in terms of labor, though not SNALT. The question is not whether the phenomenon is recognized but the adequacy of concepts to grasp it. I don't understand your alternative. As a result of moral depreciation, the older means of production as use values have not changed; nor has the concrete labor embodied therein changed. What changes is the the aliquot of homogeneous, social, and abstract labor time represented by those means. The key here is the duality of labor--Marx's key discovery. So here is one answer as to why the means of production are in fact not merely use values or physical inputs but values. Let me say as a side note that Marx begins with inputs as neither physical goods nor values. He begins with invested money capital, the money invested as constant and variable capital, and refers to that monetary sum as the cost prices of commodities. Marx's theory is thus closer to Keynes' monetary theory of production than it is to Sraffa's technical input-output matrix. Shane Mage, Paul Mattick Jr, Guglielmo Carchedi and Fred M all point out that it's a misconception that Marx's inputs are in the form of values; the c and v columns in his transformation tables indicate invested sums of money capital which needs to be valorized. Again: for Marx a given precondition in his transformation tables are the very cost prices that indicate a sum of money that has already been laid out. It makes no less to call for the transformation of a sum of money that has already been laid out. The idea that Marx's transformation tables have to be completed is based on a misconception of what the given precondition is in the circuit of capital--which is of course the initial M. Which is not to say that there isn't a mistake in Marx's transformation tables, but it's not that sum of money invested as constant and variable capital has to be (or could conceivably be) retroactively transformed. Rakesh
Enron SPV's (Doug's theory)
Front page story in today's WSJ is pretty darn lucid. Doug, in Wall Street, you chart the shifting relations between rentiers and corporate insiders. Does this Enron case indicate that the relations have shifted again? An anomalous case? It seems that the rentiers have been juked for the sake of a narrow band of insiders? I need to re-read Wall Street. Rakesh
Re: Re: Re: Value talk
A reasonable objection. Actually I don't think it's uninteresting, but I don't think the way it gets deployed in Capital is ultimately useful or necessary. I do think that it plays an important role, but not an exclusive one, in explaining the dynamics of market economies; Marx treated the centarlity of value so understood as definitional. I think this use is undermined not only by the fact that (as ANrx acknowledges) this is a very extreme idealization useful for a particular purpose at best, but more importantly by the fact that you can do what needs to be done without it, and sticking to the definition leads you into the sterile debates about how toi save theexclusivity and centrality of value that have haunted Marxisn political economy ever since. Justin, Let me leave aside problems with this alternative neo Ricardian method, e.g., it assumes no qualitative differences between output and inputs and no adverse natural shock to gross output (bad harvest) so that the assumption of input prices=output prices can be safely made and the number of equations thereby reduced to the number of unknowns, though this puts the whole system in the straightjacket of inherently static linear equations as John Ernst, Alan Freeman, Paolo Giusanni have argued. But let's leave that aside, and let us say that we can work from the data of physical production and the real wage. Now we are told that it is possible to calculate an equilibrium profit rate and a equilibrium, uniform profit rate from that data alone without making mention, much less giving centrality, to labor value. And in carrying out these calculations we will find that (a)the concept of the productivity of capital is incoherent, thereby fatally undermining the justification of non labor income and (b)that the system cannot be solved and closed unless the class struggle over income distribution is determined exogeneously--that is, through political struggle. While the gains of Marxist theory are thereby preserved, the advantages of doing without labor value are presumably (i) anti metaphysical--no reference to labor value that cannot be seen underneath prices and physical production data (though the idea that social labor time is meta-physical would surely not occur to those who engage in it) (ii) parsimony--why needlessly multiply the number of entities used in a theory (iii) anti obscurantism--ability to move beyond presumably obscrurantist defenses of Marx's transformation procedure which is indeed hopelessly flawed except in the most bizarre cases--identical compositions for all all capitals, the economy is on the von Neumann ray, etc. In short, the theory of labor value is excess baggage which the working class can no longer afford to carry. Now let us say that we can calculate prices and profits from data of physical production alone. But again I think you are mixing up calculation with determination. Let me requote Shaikh since you may have missed this passage in the barrage of criticism that you have received: Notice how often the word 'determines' crops up: the physical production data *determine* values, and in conjunction with the real wage, also *determine* prices of production. but what determiens the physical production data. In Marx, the answer is clear : it is the labor process. It is human productive activity, the actual performance of labour, that transforms 'inputs' into 'outputs', and it is only when labor is sucessful at all that we have any 'physical production data' at all. Moreover, if the labour process is a process of producing commodities, then it one in which value is materialized in the form of use values. Thus both 'inputs' and 'outputs' are the use forms of materialized value, and we can they say that in the *real* process it is values that determine the physical production data...The physical *data* are then a conceptual summary of the real determination, and if we then use the data to conceptually *calculate* values, we only capture in thought their real magnitudes. Such a calculation no more determines these values than does the calculation of the mass of the earth determine determine either the earth or its mass. It merely recognizes what already exists. This is a fundamental point in a a materialist view of the world, and the 80 year failure of the neo Ricardians to distinguish real and conceputal determination reveals their long attachment to the idealist method p. 280-1 the Value Controversy, ed. Steedman. This may now turn out at all, but this reminds me a bit of the argument between Pearsonians and Mendelians. Pearson after all thought that he could develop a purely descriptive/phenomenalist theory of heredity by making linking the character of an individual through regression equations to the average character of each ancestral generation. Once the coefficients had been empirically established, a Pearson could calculate the
Re: Value talk
Justin writes: Why? The question is, what work does this alleged quantity do? Are you saying social labor time is alleged quantity like centaurs? Or are you asking me what does labor in fact do? No, the quantity exists, but so does the quantity that consists of the average ifference between the heights of all red haired malew orkers and all blue eyed women bosses. The latter quantity is not theoretically interesting. so social labor time would be so trivial to whom exactly? It does no real theoretical work. Whatw ork does labor value do, if virtualy the entire apparatus ofg Marxism theory can be restated without it? Moreover, and more crucially, whatw ork has it done? People haves pent overa century trying topatch up the theory. But there have been no interesting developments or applications, just ways of saving the true religion as stated in die heilige Schrift. Of course value and value form do real theoretical work by (1) keeping our focus on social, cooperative labor and its specifically bourgeois form; (2)giving descriptive focus to the laboring activity of the working class and the class relation of who labors for whom (who but a technocrat would care that it may be more convenient for him to calculate prices and profit rates from the technical conditions alone, and even if this is possible, it does not mean that it is not meaningful to say that so called equilibrium prices and profit rates are not determined by labor simply because the use of labor magnitudes may not be needed to *calculate* them given available technical data, but what or who other than labor--Shaikh has asked--has determined and put in place the supposedly given technical conditions which allow for the direct calculation of prices and profits? After all, Marx's critique of the political economy is not meant for technocrats working in linear programming or businessmen interested in the movement of prices but for a revolutionary working class which in resisting this social order needs to understand it and its place in it); (3) by revealing the contradiction or inverse movement of use value and unit value which is the key to Marx's dynamics; and (4)by allowing for the development of a theory of money which overcomes an apparent syllogistic fallacy such as all commodities potentially *have* value; money is (or was) a commodity; commodity money does not have but *is* itself value. Money must thus be at once both a kind of and not a kind of commodity. Marx tries to explain how this paradox arises out of the contradiction within the commodity between use value and *value*. Whatever the hell money is (or was in Marx's time) it is (or was) neither the standard commodity nor a numeraire plain and simple. Rakesh
Re: Re: Re: RE: Re: value and morality
Miyachi, May I have the Michael Billing source cite? Thanks, Raksh
Re: Value talk
Justin writes: It does no real theoretical work. Whatw ork does labor value do, if virtualy the entire apparatus ofg Marxism theory can be restated without it? Now yes Steedman argues that one can go straight from the physical production data and a uniform real wage to the determination of prices and profits without the so called detour of value. I have found persuasive Shaikh's criticism of the redundancy charge in the Value Controversy, ed. Steedman. Notice how often the word 'determines' crops up: the physical production data *determine* values, and in conjunction with the real wage, also *determine* prices of production. but what determiens the physical production data. In Marx, the answer is clear : it is the labor process. It is human productive activity, the actual performance of labour, that transforms 'inputs' into 'outputs', and it is only when labor is sucessful at all that we have any 'physical production data' at all. Moreover, if the labour process is a process of producing commodities, then it one in which value is materialized in the form of use values. Thus both 'inputs' and 'outputs' are the use forms of materialized value, and we can they say that in the *real* process it is values that determine the physical production data...The physical *data* rae then a conceptual summary of the real determination, and if we then use the data to conceptually *calculate* values, we only capture in thought their real magnitudes. Such a calculation no more determines these values than does the calculation of the mass of the earth determine determine either the earth or its mass. It merely recognizes what already exists. This is a fundamental point in a a materialist view of the world, and the 80 year failure of the neo Ricardians to distinguish real and conceputal determination reveals their long attachment to the idealist method p. 280-1 Suffice to say, the charge of Platonism can be returned. The problem of course as Shaikh underlines here and Michael Lebowitz before him is that the neo Ricardians tend to think in high Stalino-techno-bureaucratic fashion of the production as a technical process, as physical data, instead of a labor process in which human labor is objectified in use values (p.281).
Re: re: re: Historical Materialism
Jim writes: (2) no, Marx shows convincingly in volume III of CAPITAL that as long as (1) the rate of surplus-value is constant and uncorrelated with the OCC; (2) the OCC differs between industries; and (3) the rate of profit tends toward equality between sectors, prices gravitate toward prices of production (POPs) that differ from values. Maybe you're thinking of Ricardo, who saw exactly this kind of result from his analysis but assumed that the value/POP correlation was good enough for early 19th century British political economy work (embracing what historians of economic thought call the 98% labor theory of value [i.e., of price]). For Marx, the connection between prices and values is macroeconomic in nature, with total value = total price and total surplus-value = total property income, with the macro structure of accumulation limiting and shaping the microprocesses that make up that totality. (Charlie Andrews' recent book, FROM CAPITALISM TO EQUALITY, is good on this.) I agree with the focus on totality here. but it is a peculiar focus, and I am going to make an outlandish guess as to why. By vol 3, Marx is nearing his descent to the concrete totality, yet Marx seems not interested in *individual* capitals even as he approaches them because any one individual capital does not yield--as a result of the variance in compositions--surplus value at the same rate as would the *typical particular* capitalist (that is, the prototype of or a perfect aliquot of the whole class; Meek links Marx's typical particular of a capital of average composition to Sraffa's standard commodity). In vol 3 Marx remains more interested in total surplus value produced by all the individual capitals, and it is only in terms of capital-as-a-whole that the total mass of surplus value can be defined, and the average rate of profit determined. Capital-as-a-whole is thus revealed to be itself a concrete unit with its own specific attributes. So even as Marx comes to appreciate fully individuality, as opposed to typical particularity, in the multiplicity of capitals, he is not ultimately interested in the the multiplicity or aggregate of individual capitals but with the concrete individual that is itself capital as a whole. Itself a concrete individual, capital-as-a-whole is thus not like say boats-as-a whole which is merely a *generalized concrete abstraction* for small open craft, ocean liners, battleships and and exchange carriers. In this latter case the members are of course more concrete than the abstract class. But in the case of capital-as-a-whole, the class itself has been concretized in that it alone has attributes that its members, as individuals *abstracted* from that class, do not. The capitalist *class* is not a not a mere plurality of capitals; it is itself a fairly concrete unit. I do not think we have here a fallacy of misplaced concreteness or an error of hypostatizing. Though I do not know whether I am making sense either. And it may be that the fault should be put on capitalist social relations, not those social scientists who reject methodological individualism which seems only to accord concreteness to members, not classes. Such a stricture may be illsuited for the very society that produces the standpoint of the individualist. rakesh
Re: Re: re: re: Historical Materialism
Jim writes: (2) no, Marx shows convincingly in volume III of CAPITAL that as long as (1) the rate of surplus-value is constant and uncorrelated with the OCC; (2) the OCC differs between industries; and (3) the rate of profit tends toward equality between sectors, prices gravitate toward prices of production (POPs) that differ from values. Maybe you're thinking of Ricardo, who saw exactly this kind of result from his analysis but assumed that the value/POP correlation was good enough for early 19th century British political economy work (embracing what historians of economic thought call the 98% labor theory of value [i.e., of price]). For Marx, the connection between prices and values is macroeconomic in nature, with total value = total price and total surplus-value = total property income, with the macro structure of accumulation limiting and shaping the microprocesses that make up that totality. (Charlie Andrews' recent book, FROM CAPITALISM TO EQUALITY, is good on this.) I agree with the focus on totality here. but it is a peculiar focus, and I am going to make an outlandish guess as to why. I just want to add a simple point here which echoes Yoshie's point from the capitalist point of view, and I think it says better what I was trying to say very early this morning. For Marx, only once one has discoverd the average rate of profit for capital-as-a-whole can one discover the limits to the profit that any one capitalist can make. No matter whether an individual capitalist beats off the fall in the average rate of profit at the expense of other capitals, the fall in the average rate for the capitalist class can plunge the system into the crisis. As GA Cohen may put it: that the only a few can fit through the escape door (micro) before it shuts can only be clarified by understanding the situation of the capitalist class itself (macro). Despite the strictures of methodological individualism, it seems to me quite precisely accurate to speak of the fate of the supra-individual entity of capital, which again is itself a concrete individual unlike say a generalized concreted abstraction like boats-as-a-whole (row boats, aircraft carriers, tugboats). rb
Re: Re: Take the Money Enron.
Hi Steven, Thank you very much for your very interesting Take the Money Enron ... I was especially interested in the following paragraph: Unfortunately, hundreds of companies now rely on this explosive combination of private placements and off balance sheet entities. The last decade has seen the American economy create a massive amount of new paper financial obligations using these structures that cannot possibly be supported by the productive base of the economy. In fact, little attention is being paid to what is happening in this real economy, made up of steel mills, auto assembly plants, health care services, and our physical infrastructure, which turn out the products and services that a society truly needs to eventually pay off all of these fictitious claims to society' s wealth. I have a data question for you: The main source of data on debt of non-financial corporations (NFCB) is the Fed's Flow of Funds accounts. It seems to me that most of the off balance sheet debt created in the 1990s would NOT be counted in the Fed's data for the NFCB sector, since the borrower in most of these cases is a financial partner of a NF corporation. At most, it would be counted in the Financial sector, whose debt increased roughly twice as fast as the NFCB sector in the 1990s. Or, in the most hidden (off-shore) cases, it might not be counted by the Fed at all. If this is correct, then the Fed's data underestimates the current debt obligations of the NFCB sector. I wonder how significant this underestimation might be? Steven (and others) what do you know about this? Another question is who the creditor is. The creditors could be US in origin operating out of offshore accounts for purposes of tax advantage. But I don't believe the Fed's Flow of Data allows one track creditors working through offshore accounts back to their nations of origin. But a loss of foreign confidence may not be as great a threat if one remembers that the owners of this debt are not necessarily foreign nationals. rb
Re: The rate of profit and recession
Charles, I do not know whether science has ethical implications but the practice of science and rational argument depends on ethical commitments--good faith attempts to understand the other side, to consider and carefully engage counter-criticism before launching the same criticism in the same unmodified form again, to recognize the strongest counter-evidence against you (for example, I have openly admitted that I do not have good or any direct evidence that the rise in the s/v no longer neutralized rise in vcc and u/p labor ratio, and I have hurt my brain working through neo Ricardian critiques such as Catephores' and Robert Paul Wolff's--do you understand even one problem in the crude underconsumptionist theory to which you are committed?), and to read the works of your opponents (for example, I have re-read Perlo and Fichtenbaum whom you do not in fact understand, so in your case it first has to be a matter of reading the very theorists whom you think you are defending). Now of course Jim Devine has reached the conclusion that I have not operated ethically in my criticisms of him, and I openly admit to being very confused by what he is saying. I for example don't understand whether his or any overinvestment/modified unconsumption theory can specify a growth rate that would make accumulation somewhat less vulnerable to collapse like a house of cards. I truly don't understand this. But then neither does Shaikh. Fred also read the same unconsumptionism into Jim's theory that I understood it to imply. Jim denies both that his theory his vulgar underconsumption or fosters reformist illusions. Well, you can draw succor from many others who have also read underconsumptionism into Marx as the last word in crisis theory. But I have no interest in an exchange of slogans And that is what I will get with you, not a scientific or even rational argument. I wish you luck in finding other interlocutors. Rakesh
Re: Re: Re: Re: RE: Re: Re: query: HistoricalMaterialism
Hi Justin: I think that the distinction is valid and it is a very serious flaw in Roemer's critique of Marxian exploitation theory that he misses the significancxe of it. OK, good. That is something quite independent of Roemer's positive theory of exploitation, the possibility of a better alternative, which independent of his critique of Marxian exploitaion, and (I argue in IDoE) both a necessary complement to Marx's theory and valid in its own right. we'll have to work through his theory based on differential ownership of assets but let's be clear that even Roemer is ultimately interested in the appropriation of labor by one class of another. As to the this positive theory, it is crucial to emphasize that it's not morally or otherwise culpable for people to have to work for others, etc., if there is no credible alternative to this situation where the exploited would also be at least as well if not better off by some measure. So the explication of feasible alternatives to exploitative relations is a necessary part of the charge that those relations are exploitative at all. So, to bring in another bomb into this discussion, not only was Marx wrong on practical grounds to disclaim writing recipes for the cookshops of the future, he was wrong on theoretical grounds: he can't even say that capitalsim is exploitative unless there is a better alternative. Unless there is a better alterntive, it ios not exploitative. the better alternative is an unwritten book, a book that can only be written by a revolutionary working class in the act of creating a socialist society in order overcome the immiseration, degradation and slavery visited by this one on them. I think that Roemer's version loses a lot of the point of Marx's socological analysis, which, as I say, can be maintained without holding that labor creates all value Justin, Marx does not say that. He says that *abstract, general social* labor creates all value. No, he doesn't. You confuse the strict version of the LTV, SNALT (socially necessary abstract labor time) as a mesure of value, with the vulgar version, labor as the source of value. Marx could not be clearer that the distinction between abstract and concrete labor is one of the great accomplishments of his book, and the key to the critical conception. One simply cannot be making an interpretation of Marx in good faith without trying to understand what he meant by this distinction. Which of course is to say that there is a lot of shoddy interpretation of Marx. Marx accepts both. He accepts no other source of value but labor. But value lacks a measure or real significance outside market relations in which it comes to dominate society. Do you mean that value only exists (and potentially at that) as labor objectified in a commodity? Anyway, the vuklgar formulation is widely held by Marxists, whether or not Marx holds it, which hedoes. We are now in a position to read Marx above and beyond Marxism, Leninism, Social Democracy and Stalinism. or that price is proportional to value understood as socially necessary abstract labor time. Marx did not think price is proportional to value; contra Bohm Bawerk, he did not come around in vol 3 to implicitly recognizing the productivity of capital. Vol 3 was written before vol 1. Sure he did--not simply directly proportional, but there's a relation. Yes there is a relation. Drawing from Ricardo, Marx says that changes in value is the best explanation for changes in relative prices over time; however he does not say that price is proportional to value at any one time. Unless you think Engels and almost the entire tradition of Marxist economics was wrong about the existence of the transformation problem--yeah, I know Foley and those types do. But I disagree with them. That's not the point. Foley's taking the money wage instead of the real wage as given sure seems right to me. The idea of a uniform real wage in terms of an identical basket of commodities for all workers seems a very questionable assumption to make. And no neo Ricardian has ever responded carefully to Shaikh and the others in the Freeman and Mandel volume. I think Shaikh's response to the redundancy charge is marvelous as is Amartya Sen's. Again there has never been a formal response as far as I know. Now Howard and King say that Shaikh's iterative solution is the worst of all, but their response is almost purely vituperative. The point remains that in Shaikh's iteration (as well as Jacques Gouverneur's) the mass of surplus value value remains equal to capitalists' income as composed of profit and revenue, and the proof of this is that the capitalists gain or lose nothing in real terms as a result of a complete transformation which as Fred Mosely and Alejandro Ramos Martinez argue is not needed anyway as the inputs in Marx's own transformation tables are not in the form of values or direct prices
Re: Re: RE: Re: Re: query: Historical Materialism
I have defended that formulation in What's Wrong with Exploitation?, Nous 1995, availabkle on the net in the old marxism spoons archive. However, I argued that it did not require the labor theory of value in Marx's canonical formulation to state it. More generally, the point is that capitalism is exploitative, a point that _can_ be put without reference to any theory of value at all--Roemer has an argument to this effect. I have had an extensive argument with someone influenced by Roemer, though he criticizes Roemer for not appreciating the distinction between labor power and labor. But I'll ask you a question: how do you understand the logic by which Marx discovered the distinction between labor power and labor or--to put it another way--that what Mr Moneybags pays for in what is indeed a fair exchange is labor power, not labor time itself? Or do you think said distinction is as superfluous as the so called labor theory of value? Or do you think Marx's understanding of that distinction has to be modified? I think that Roemer's version loses a lot of the point of Marx's socological analysis, which, as I say, can be maintained without holding that labor creates all value Justin, Marx does not say that. He says that *abstract, general social* labor creates all value. Value as expressed in the exchange value of a commodity does not derive from the subjective or *personal* estimation of the toil and trouble involved in its production. Value does not derive from the useful qualities of the commodity that derive from the *concrete* labor that went into its making. The value of the commodity is not related to the time individual producers put into their making but rather the time socially necessary to reproduce that commodity. The value of a commodity is a represenation of some aliquot of the social labor time upon which divided in some form any and all societies depend. It is not personal, subjective and concrete labor time that is connected with the value of a commodity. These are very rough qualifications, but Marx spent a lot of time elucidating these qualifications--along with the monetary sides of value--that he thought escaped the classical economists who were thus at a loss to understand capitalism as historically specific form of social labor and the crises by which it was riven. or that price is proportional to value understood as socially necessary abstract labor time. Marx did not think price is proportional to value; contra Bohm Bawerk, he did not come around in vol 3 to implicitly recognizing the productivity of capital. Vol 3 was written before vol 1. I also find it puzzling--as did even Amartya Sen who is by no means a Marxist--that self proclaimed sympathetic critics would find value--abstract, general social labor time--of little descriptive interest in in itself merely because it is not a convenient way of calculating prices with given physical data. I can understand how Samuelson would embrace the redundancy charge and the eraser theorem but the alacrity with which academic sympathizers accepted such criticism is little short of astonishing, I must say. Or should we say socialists of the chair rather analytical Marxists? I will add that Jim and Chris B have cast amniadversions on the reductionism of classical analytical Marxism, which has largely been abandoned by its founders (Erik Olin Wright excepted, also Alan Carling). But the points I am making do not require reductionism of any sort. What remains of AM--and it does survive in places like the journal Historical Materialism--is an emphasis on clarity, precision, explicitness, and rigorous standardss of argument, along with a totally unworshipful attitude towards traditional formulations or classic texts. These are worth preserving. I thought Cohen's theory of history was a a more rigorous version of Plekhanov's classic texts? I must say that I found Brenner's criticism of Cohen rather persuasive. Because AM as a movement has evaporated, it is not worth beating up on or defending. What is worth defending is what has always mattered--intellectual honesty and care, I am not convinced that Marx was given a fair hearing. the pessimism of the mind that must accompany optimism of the will. Leave fundamentalism to the religious. If there is a scientific dimension to historical materialism, it will survive. Not necessarily because Marx's scientific theory threatens the ruling class. This is a science whose existence and (paradoxically) dissolution depends on the political victory of the working class. At any rate, I think this recent argument about crisis indicates how deeply Marx thought about micro foundations. In order for surplus value to be realized capitalists have to expand the scale of production but each capitalist does not do so in order to realize surplus value for the capitalist class as a whole but because hitherto such expansion in
Re: The rate of profit and recession
The rate of profit and recession by Rakesh Bhandari 29 January 2002 20:45 UTC why is there overaccumulation in the system as a whole? why is global investment demand not strong and high enough to realize the surplus value that remains latent in commodities? Let us suppose that the whole of society is composed only of industrial capitalists and wage-workers. Let us furthermore disregard price fluctuations, which prevent large portions of the total capital from replacing themselves in their average proportions and which, owing to the general interrelations of the entire reproduction process as developed in particular by credit, must always call forth general stoppages of a transient nature. Let us also disregard the sham transactions and speculations, which the credit system favours. Then, a crisis could only be explained as the result of a disproportion of production in various branches of the economy, and as a result of a disproportion between the consumption of the capitalists and their accumulation. But as matters stand, the replacement of the capital invested in production depends largely upon the consuming power of the non-producing classes; while the consuming power of the workers is limited partly by the laws of wages, p! artly by the fact that they are used only as long as they can be profitably employed by the capitalist class. Charles, why do capitalists find at some point in the course of accumulation that it is no longer profitable to employ workers in the expansions of either or both depts and thus limit investment demand (of which variable capital is a component) such that surplus value that has already been produced and lays idle (not all of which by the way is in the form of consumer goods) cannot be realized by way of accumulation? The ultimate reason for all real crises always remains the poverty and restricted consumption of the masses as opposed to the drive of capitalist production to develop the productive forces as though only the absolute consuming power of society constituted their limit. So investment demand falls, the masses are further impoverished and their consumption even more restricted, yet supply had been built up with a view to meeting unmet needs and demands as such which are now however no longer effective because of the drop off of investment demand the explanation for which is the shortage of the surplus value that was actually being produced even as that surplus value had in fact realized. The capitalists no longer believe that it pays to accumulate, investment demand falls off, capital and workers are idled, the masses are thereby impoverished and their consumption further restricted--so yes indeed the ultimate cause of crisis can be said to be the restriction on the consumption of the masses by the adequation of the production to the valorization of capital. The question remains what are the limits to the valorization of capital. Rakesh
Re: RE: The rate of profit and recession
[somehow my e-mail program isn't cooperating again. Here's my complete message.] [I thought I started writing a reply to this, but somehow there's no file. I'm sorry if anyone received two versions.] Paul Phillips writes: The question we were discussing, I thought, was what explains the drop in profits after 1997 (despite rapidly rising labour productivity) and which subsequently resulted in a fall in investment initiating the recession. Your data, at least as I read it, questioned whether the fall in profits was initiated in production given the stable K/Y ratio. right, though it's not my data. (It's from the U.S. government's Department of Commerce.) In fact, in the U.S., the K/Y jelly -- I mean ratio -- was moving in the wrong direction after 1980 or so in order to explain a fall in the rate of profit. Though there are other eras which are more classical in appearance (in the sense that excessive capital intensity [fixed K/Y] explains the profit rate's fall), the period since 1980 or so, like the period from 1919 to 1929, didn't fit that rubric. but the question remains what the relation of such data are to Marx's variables of vcc, occ, s/v, and U/P labor ratio. The proximate cause of the fall in the rate of profit during the last part of the 1990s/2000 boom was a fall in the profit share. This in turn was due to a boom-driven fall in unemployment, going down to 4%, which eventually raised wages. But why would the underconsumption undertow have kicked in at the point that consumption gains were being generalized? The boom also pulled up raw materials costs to U.S. businesses. oil prices skyrocketed but what about a basket of raw materials? and does the timing work out? hasn't the recession grown worse as raw material prices have weakened? The latter were unable to pass the costs onto consumers as higher prices because of the high dollar. the high dollar may have also reduced capital costs. Increased competition from a large number of places -- including China -- as part of the world-wide race (or crawl) to the bottom, i.e., competitive austerity and export-promotion put a squeeze on U.S. profits. Why did this decrease mark ups more than costs? I don't discount underconsumption forces except as an explanation of the proximate causes of the decline in profitability. Instead, I see them as working in the background, determining the conditions needed to be met to allow a sustained boom. Given the underconsumptionist undertow resulting from the one-sided class war in the U.S., the only one way that we could see a sustained economic boom of the sort that prevailed in the 1990s was to have either a profit-driven investment boom, a credit-driven workers' consumption boom, a boom of luxury spending, a surge in U.S. net exports, and/or a rising government deficit. Given the general stagnation of most countries outside the U.S., due to the one-sided class wars and neo-liberalism there, along with the highly valued US$, the penultimate substitute for consumption growth was ruled out. The neo-liberal policy revolution ruled out the last one on the list; in fact, the US government's budget went into the surplus territory. So, the boom was based on profit-driven investment and a rise in luxury spending, each of which were pushed along by the rightward shift in the income wealth distributions and the stock-market bubble, plus credit-based consumer purchases by workers. But all of these created imbalances which made the boom more and more prone to collapse. Debt accumulation and a more rapid growth of industrial capacity are the most crucial imbalances. In addition, these types of spending are especially flaky -- subject to fluctuations -- compared to income-based workers' consumer spending, so demand became increasingly subject to fluctuations as it became more dependent on them. These imbalances make the boom increasing unstable. I don't see how this responds to Fred's point that less mass underconsumption would have made the boom more unstable, more vulnerable to an earlier collapse; moreover, I don't see how this responds to the classical Marxist argument (Grossman, Mattick, Yaffe, Daum, Cogoy, Shaikh, Moseley) that less underconsumption in a downturn may not only not help in overcoming the dowturn, it may exacerbate it. After all, if the overcoming of realization problems depends on the revival of accumulation which in turn depends on the brighter profit prospects generated by the crisis-created cheapening of constant capital and intensifying of the rate of exploitation, how would less underconsumption and less restriction on wages overcome the crisis? Toward the end of the 1990s/2000 boom, we saw the possibility of an escape from the underconsumption undertow, as wages started rising (in the U.S.) relative to productivity. But given the world political economy of neo-liberal triumphalism and IMF- and TNC-driven wage cuts, this didn't widen to include many
