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> (1) Perhaps the gulf is between different readings of 'Capital': between
> (i) readings that apparently ignore the importance of Steedman's (1977)
> critique of labour embodied value theory, and continue to see Marx's
> development of this theory as a big contribution; (ii) readings that do
> accept Steedman's critique, but do not accept that it applies also to
> and (iii) those that accept both the critique and it's applicability to
> Marx, to the extent that his concept of abstract labour can be said to be
> derived from concrete labour (here readings of different editions of
> 'Capital' complicate further).
I find this interesting. I had not realised that the value form theorists
accepted Steedmans critique.
My position on this is that Steedmans critique is formally valid as a
of the variant of price of prodution theory put forward in volume 3 of
However, I consider that both Steedmans critique and the original price
of production theory in vol III both fall to the critique of Farjoun and
whose application of thermodynamic concepts to the problem predicted
that market prices will closely approximate volume 1 labour values.
Steedmans critique rests upon :
a. the axiom of profit rate equalisation, or more weakly the statistical
independence of profit rates and organic composition
b. certain constructed examples in which you have
positive profits and negative surplus value.
His work only counts as a critique of embodied labour under these two
circumstances. If axiom a falls, then both the Sraffian model of
price formation and Marx's model in vol 3 fall. But the failure of these
does not invalidate volume 1 embodied labour theory of price.
Point b is only relevant if such circumstances actually occur in
the real world. Steadmans examples are constructed with two
industries. Given that any real economy involves thousands of
industries, and that even aggregative I/O tables generally contain
around 100 industries, it will be understood that it is far harder
to construct a *realistic* example with hundreds of products.
One could trivially extend Steadmans examples by dividing
each industry into 50 sub-products and end up with a 100
industry example that gave +ve profit and -ve SV, but such
a construction would have very low entropy, and as such would
be vanishingly unlikely to occur in the real world.
This argument was developed I think by Farjoun, but perhaps
it was Shaik in the collection
called Ricardo, Marx, Sraffa edited by Alan Freeman.
Empirical studies since then have shown that the circumstances
hypothesised by Steadman do not occur in practice, and that
market prices are closely correlated with labour values.
A paper currently in press with the Cambridge Journal of Economics
will show that axiom (a) the statistical independence of profit rate
and organic composition, fails for the UK and US economies.
Steadmans critique is formally correct but can not apply in the
real world where thermodynamic considerations rule it out.
It depends upon low entropy states without providing any
entropy reduction mechanism.
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