[OPE-L:3863] Re: Re: Re: Re: NI and all that

From: Rakesh Bhandari (bhandari@Princeton.EDU)
Date: Wed Sep 20 2000 - 22:21:26 EDT

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Re Allin's 3857
>Yes, this has been hashed over at length on the list and I don't
>have anything new to add to that controversy. I'll just say
>that the vector of mutually consistent prices that would
>equalize profit rates on the basis of given, constant technical
>conditions (while the premiss is of course counter-factual) is
>not without interest,

Do you mean by mutually consistent prices the same unit prices? If so, then
why not say so clearly?

 and I'm sure that if Marx had been able to
>come up with a derivation of this vector he would have done
>so: and would have been forced to face the problems it entails.

Why are you sure? I've read Marx too, and don't have that impression at all.
Immediately after the famous demonstration of the need to modify cost
prices Marx then considers the various factors for changes in prices of
production (Capital 3, p. 265-66.), indicating that Marx has now dropped
the assumption of constant values (or prices) just as he has already
dropped the vol 2 assumption of the annual turnover of fixed capital and
the methodological artifice of treating single capitals only as perfect
aliquots of total capital. All assumptions are off by part 2 of Capital 3.

You have provided no reason why Marx would have welcomed the straightjacket
of linear algebra for vol 3 problems.

Moreover, is it not a bit absurd to suggest that Marx would have welcomed
an apparatus by which value is rendered redundant? Especially since built
into that apparatus is an assumption which he is finally relaxing?

>I had thought that Marx had something much more ambitious in
>mind than a critique of Parson Malthus -- namely the
>completion/correction of Ricardo's analysis of the relationship
>between the labour theory of value and profit-rate
>equalization. That's what he tells us he's after.

This is the same issue. As I have ntoed now several times, Marx is
responding to Malthus' critique of Ricardo on the putative contradiction
between the law of value and the average rate of profit. If you don't
believe me, I urge again a careful reading of Capital 3, p. 270.

By the way, there is an interesting (and rather disturbing) book on Parson
Malthus's influence on Keynes John Toye, Keynes on Population (Oxford
2000). Toye pays special attention to the role of Darwinism in economic

 But I value analytical
>clarity, and it don't think it's any service to Marx to fudge a
>theoretical issue on which he expended a great deal of
>intellectual energy.

If the deviations are statistically insignificant as you seem to be
claiming, it would be neither rignrous nor analytical nor possible to take
them into account. Your criticism of Marx is contradictory: on the one
hand, you argue that price does not deviate from value in a statstically
significant manner; on the other hand, you argue that the inputs have to be
in prices instead of values. But this should not matter to you. I would
hope that by analytical clarity you do not mean such patent contradiction.

By the way, I am not sure whether I agree with Michael P or TSS (Freeman,
Kliman, Ernst) about how the profit rate for capital as a whole falls due
to moral depreciation or capital destruction effected by on going technical
change (according to Alexander Gourevitch, Emil Lederer worked out such a
position in the interwar years). To be sure, individual capitals are
devalued but, following Grossmann and Fred, this can simply be the
sacrifice of individuals for the survival of the species.

Moreover, my understanding is that Marx though such losses were largely
prevented by the capitalist resort to the compensating mechanisms of longer
working hours and more intensified exploitation to ensure the amortization
of capital--which thereby explains the paradox of worker misery despite on
going technical revolution (see Grossmann's book on dynamics). At least I
would not put my emphasis on the destruction of capital. Carchedi is
considered a member of this school but this is not how he derives FROP.

All the best, Rakesh

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