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Dear Martha [and Fred],
a quick (but, I hope, not incomprehensible answer) after the usual day of
lectures and Department meetings. [Quick in the way it is written, not
referring to the length and time needed to read it!!!]
Your serious rejoinder is full of interesting things and rigorous in its
own terms. Nevertheless, I fear it does not meet the core of my objection.
I still think that your reasoning is similar to a Christian reproaching a
Muslim that he does not believe in God, since he does not believe in Christ
and his revelation=resurrection (Christ=value; revelation=money). Fine. It
works for the true believers. Nevertheless, the Muslim believes in God. And
it is unlikely that your conversation will lead somewhere (pacific, at
Here, too, I still find quite strange to write that a guy who has always
written about money be charged that he didn't showed the necessity of
money. If that means, he does not have the deduction of money from the
analysis of the commodity, that's true. But, exactly, this is so because he
had a different perspective on money. He believed we have to analise
capitalism as an inherently monetary economy.He didn't started from the
commodity, he started from money! A Keynesian would say that money is
*most* important in Keynes *exactly* because he didn't started from the
BTW, I always wonder why, if Marxism was so great on money, in this
century, if we leave aside Hilferding and De Brunhoff, we have very few
names to put forward on this topic. May be Aglietta: who went on the other
side in the '80s. We have a lot of fundamental contributions on money in
the 'bourgeouis' side.
I think that our attitude is different because I see in Keynes (as in
Schumpeter) a political economist of the XX century, and we must treat him
as Marx treated Ricardo. First, learning from him, then critique. I have
the impression that for you Keynes is a vulgar economist. All was said by
Marx, then no more political economy is possible in this century.
In your answer, you raise a lot of interesting point, which must be discussed singularly. I try, without any hope of being understood, some quick comments here and there:
(i) consumption. I read that page simply as saying that if and when saving as a share of income goes up, since investment is autonomous, a crisis of realization is coming. Hence, if consumption becomes too 'far away' from production, also capitalism goes in trouble (if economic activity does not conform to the ultimate end, consumption, this sooner or later will create serious contradictions). Exactly because investment is the autonomous variable, dependent on monetary variables and the stock market. I must confess that I agree. Probably, me too am a bourgeouis, which thinks that money is irrelevant. Though I would say that this seem to me a monetary argument.
(ii) yes, I think that Keynes had contradictions. What would you say of a guy who had endogenous money in the Treatise and (seemingly) exogenous money in the General Theory? But I also think that Smith was contradictory. Even Ricardo. May be that Sraffa was not contradictory. That's why he was obliged to be so rigorous as to become almost irrelevant. I even think that Marx is contradictory [apologies, Andrew, probably I misread Marx]. My point was, and is: Keynes was a great monetary economist, and I find dubious any statement that for him money and money profits were not crucial. [BTW, your arguments seems so much nearer to the target relative to the great opponent of Keynes, and a great monetary economist too, Hayek].
(iii) on cooperative versus money-wage, it's clear that Keynes endorses the idea that the cycle of the capitalist process starts with the financing of production and (must) end with M'>M. Your tripartition (NC-Marx-Keynes) is clever, and I am not able to comment it here as it desreves. But let us assume that M'>M is an intermediate step to consumption as the ultimate end. This would have been for Keynes a step toward the idea that 'good' consumption included: reduction of working hours to two hours a day (to satisfy the old Adam); the abolition of the 'love for money' (something so horrible to be left aside to those who are interested in these awful, distateful matters). The ultimate end of Keynes is some kind of 'consumption' to be more similar to a green utopia than to a general commodification of goods.
(iv) for you the key issue of Capital is: direct cordination or the market; for me it is the class relationship between workers and entrepreneurs. When there is the latter, there is the tendency to generalized commodity market. But the latter requires capitalist production, and capitalist production requires finance to production. This is clearer in (some) Keynes than in (most of) Marx. So, I take all the first book of Capital as a preparation (revelation) of the fact that the hidden truth of capitalism is abstract labour NOT as 'abstraction in exchange' (the presupposition) BUT as 'abstraction in production' (the posit). *My* Rubin: abstract labour is latent in production, and actualized in exchange. This is quite compatible with Keynes, and independent from Marx deduction of money from the commodity, which (to be provocative) is just a ladder to arrive to the construction of the capitalist social relation (which is a market relation, on the labour market, M-FL, and a production relation ...P...).
(v) your last phrase. Well, yes and no. In the first instance, you're right. But, I would add, it is so because Marx was clearly arguing that money was a commodity produced by labour (so that the abstract labour of the commodity A was translated in the social labour producing gold as money). But I don't believe in commodity money. And if you don't have money as a (special) commodity, then all Marx's deduction is problematic. Why should the value refers to *labour*? And, by the way, if money is a commodity, how its production is financed? That's why I redefine abstract labour the labour set in motion by capitalist entrepreneurs thanks to a monetary (bank) financing, which is finalised to exchange. So abstract labour *exists* before exchange, even if only as a latent, expected magnitude. A view, again, which is quite compatible with the Keynes of the Treatise.
But this is of course a lot of different issues than the one from where we started from. Is money *necessary* in Keynes? Yes, as the air we need in the 'world we live in'.
At 19:14 +0100 8-04-2000, Martha Campbell wrote: >Hi Riccardo, > >At 08:37 PM 4/7/2000 +0100,Riccardo wrote: > >I did not argue that Keynes said consumption is the purpose of production, >Keynes himself says this (GT.p104). You might like to claim that he should >not have said it (i.e., that it is inconsistent with other aspects of his >theory). But I think he is obliged to say it. We can conceive Economic >activity to have another goal only if we recognize that the specific social >relations through which it is carried out themselves realize a goal (this >at least follows from Marx's example; David Levine - based on Hegel - >argues that market relations realize the goal of individual >self-determination, but the principle is the same: that other purposes of >economic activity (such as the expansion of value) come from the social >form of economic activity). Since all systems of economic activity (or if >you like modes of production)satisfy needs, this common purpose cannot >provide the reason for the differences between them. This kind of >consideration (social form) cannot be incorporated into Keynes's conceptual >framework (there are evidences of its absence in the GT, such as his >supposition that medieval usury laws are meant to keep the rate of interest >lower than the marginal efficiency of capital p. 351, or that in earlier >historical periods, land had a high liquidity premium as money does in >modern society p. 241, I will get to his discussion of a cooperative >economy in a minute). Abstracting from social form does not prevent Keynes >from making observations about particular institutional features (e.g., of >the stock market). But it does prevent him from demonstrating that >economic activity has some other goal than satisfying needs. > >As for MCM' -- even NeoClassicals know that the goal of the firm is money >profits. They think this can be ignored (abstracted from) and Keynes does >not. The question is why? We can distinguish 3 positions: >NeoClassicals - MCM' by firms (micro) maximizes satisfaction of needs at >the level of society as a whole (macro) >Marx - MCM'or the creation of surplus value is the macro level goal (as >well as micro or firm's goal) specific to capitalist relations of production >Keynes - macro level goal is the satisfaction of needs but (against NC) the >pursuit of money profits does not realize this goal EFFECTIVELY (because >money profits can be made by lending as well as production, by speculation, >on a short term basis etc, all of which are good points!). Keynes does not >differ with the NCs over what the goal of economic activity is (macro >level) but over how effectively a monetary economy realizes this goal. > >On the cooperative vs. monetary economy question - the key difference for >Keynes between a cooperative and a monetary economy (if you follow his >argument closely) is that in the former, incomes are paid in goods. There >cannot be a short fall in aggregate demand. Money in this framework is >linked from the outset to the determination of the VOLUME of output. The >distinction between direct coordination of economic activity (in a planned >or traditional economy) and indirect coordination in a monetary economy is >abstracted from. > >Unemployment equilibrium - this is one of the consequences I meant when I >said that Keynes argues that the presence of money has important >consequences and therefore, that we should not abstract from money. This >does not undermine my point that explaining the necessary role of money >within the structure of capitalist relations (Marx)is different from the >argument that money, taken as present, has important consequences (Keynes). > >I think these differences between Marx and Keynes are important: (1) Keynes >says lots of things (that social advantage differs from profitability, that >MCM is the goal of the firm, that monetary & real exchange economies behave >differently, these stand out but I am sure there are others) that sound >very promising. What matters though is what he means by them and what >basis he can give for them. (2)by distinguishing the meaning of those of >Keynes arguments that sound like Marx from Marx's position, we see what >Marx is getting at. For this reason, I don't think Keynes should just be >set aside as another tradition (& do my best to read Keynes carefully & >don't see that anything you have said contradicts my argument). > >Last -- where does the abstraction of labor come from in Marx? In the first >instance from the equivalence of all commodities to money, no?
Riccardo Bellofiore Office: Department of Economics Piazza Rosate, 2 I-24129 Bergamo, Italy Home: Via Massena, 51 I-10128 Torino, Italy e-mail firstname.lastname@example.org, email@example.com tel: +39 035 277545 (direct) +39 035 277501 (dept. secr.) +39 011 5819619 (home) fax: +39 035 249975
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