[OPE-L:3870] Re: Re: Re: Re: m in Marx's theory

From: Fred B. Moseley (fmoseley@mtholyoke.edu)
Date: Fri Sep 22 2000 - 14:20:00 EDT

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This is a response to Ajit's (3833). I am sorry that I am falling further
behind in responding to others. I hope to have more time next week.

Ajit, to begin with, I really do not appreciate your condescending
personal insults. I am trying to engage in serious debate and consider
your points and criticisms seriously, and respond to them at some
length. But you respond with insults. I have been trying to ignore the
insults and carry on the debate, but unfortunately the ratio of insults to
serious debate increased sharply in your last post. So, I ask you to
please dispense with the insults and continue with the debate.

On Mon, 18 Sep 2000, Ajit Sinha wrote:

> _____________________Fred, basically your S is equal to (m.L - V), i.e. S =
> (m.L - V), where according to you, you know your L and V but not m. Thus your
> S is neither known in absolute terms nor to any degree of "proposnality". This
> is so simple that i cannot believe I have to explain it to you so many times.

Ajit, I am afraid that you haven't explained it even once yet. I have
argued that Marx's theory concludes that the magnitude of surplus-value is
proportional to surplus labor-time, with m as the factor of
proportionality (i.e. S = m Ls). Why isn't this determination up to a
factor of proportionality? Please be specific. What more is needed to
make this equation determination up to a factor of proportionality? If m
were determined, then the absolute magnitude of S would be
determined. But if m is not determined, then the magnitude of S is
determined up to a factor of proportionality. Why not?

I would really appreciate some comments by other listmembers on this key
specific point. How else are we going to resolve this dispute? Am I
missing something or is Ajit? If Marx's theory concludes that S = m Ls,
doesn't this determine S up to a factor of proportionality? If not, why

> > Fred:
> >
> > Ajit did not respond to my argument in (3815) about COMPARED TO WHAT? So
> > I repeat a part of that argument, and then continue.
> _____________________
> I'm not interested in comparing your theory to any theory. Even if only your
> theory existed in the world, my criticisms will stand. It basically states
> that your theory is inconsistent and does not achieve what it claims to
> achieve. It has nothing to do with the strength or weakness of any other
> theory.
> ___________________

I have already answered your criticisms of "inconsistency" in previous
posts. That is not what this post is about. This post is about Marx's
failure to explain the determination of m. I acknowledge that the lack of
determination of m is a weakness of Marx's theory. But all theories have
weaknesses (elements of indetermination, etc.). So the question of
weakness inevitably becomes a question of RELATIVE or COMPARATIVE
weaknesses. If the weaknesses of other theories are even greater than
Marx's lack of determination of m, then this lack is not a reason to
reject Marx's theory.

Readers, please note that Ajit has not answered my argument that Marx's
theory is superior to Sraffa's theory in the sense that Marx's theory
explains the necessity of money and Sraffa's theory does not.

> > Fred:
> >
> > Ajit criticizes "my theory" because it does not explain the determination
> > of m. However, if Marx's theory is weak, COMPARED TO WHAT? Sraffian
> > theory cannot even explain money, period; i.e. it can not explain the
> > necessity of money, why money must exist in a commodity-producing
> > economy. At least Marx's theory can explain, as a logical deduction from
> > the fundamental assumption of the theory (the "labor theory of value"),
> > that money has to exist, in order to function as the special commodity in
> > which all other commodities express their labor-value. This is not an
> > ad-hoc explanation of the necessity of money, based on the "difficulties
> > of barter", but a deduction from the fundamental assumption of the
> > theory. In other words, the necessity of money is explained in an
> > integrated way, along with the explanation of lots of other phenomena
> > (e.g. conflict over the length of the working day), all derived from this
> > fundamental assumption. I think this is a very significant theoretical
> > accomplishment that no other economic theory has been able to achieve.

> Your theory, and leave Marx out of it please, does not explain money either.
> You just make definitional claims and say given given etc. In anycase, the
> issue under debate has nothing to do with the explanation of money. You assume
> that money is given and I have not raised any problem on that count anyway.
> Why not keep the focus on the problem at hand?

I am talking about Marx's derivation of the necessity of money in Section
3 of Chapter 1. What is wrong with Marx's argument in this section? If
there is nothing wrong, then this is a clear element of superiority of
Marx's theory.

> > Fred:
> >
> > Furthermore, it just occurred to me yesterday: Sraffa's theory does not
> > explain absolute prices either, but only RELATIVE prices!
> _________________
> This occurred to you only yesterday! And you have been writing rhetoric
> against Sraffa for how many years?

I have read Sraffa many times (although I gladly acknowledge that I do not
understand Sraffa's theory as well as Ajit and others), and I have known
for a long time that Sraffa's system only determines relative numeraire
prices. What occurred to me recently is the similarity between Sraffa's
determination of relative prices and Marx's determination of surplus-value
- in the sense that both are types of determination up to a factor of
proportionality. In other words, the very weakness that you criticize
Marx's theory for, Sraffa's theory also has. Therefore, this weakness is
no reason to choose Sraffa's theory over Marx's theory.

Instead of responding to this argument, Ajit insults my scholarly
integrity by asserting that I have been writing about Sraffa without
reading him.

> You should know that price is a relative
> concept. Marx's prices in terms of gold is also relative. It is a ratio of
> exchange between two commodities.

Marx's prices are indeed in terms of gold, but they are in terms of an
absolute quantity of gold (or of money representing gold); e.g. 30
shillings, 600 pounds, etc. in Marx's many examples). In this sense,
Marx's money prices are absolute prices; they are not ratios of absolute

Sraffa's relative prices, on the other hand, are ratios of absolute
prices. The absolute prices are never determined, only the ratios between

Ajit, what exactly are these absolute prices that appear in Sraffa's
system of equations, prior to the selection of a numeraire and the
determination of relative prices. How exactly are these absolute prices
defined? In terms of gold or what? Could you please give me some
references where Sraffa or others have discussed the definition of these
absolute prices? Thanks.


>> The Sraffian
>> system of equations has an extra unknown. The system can be solved if
>> the price of one of the commodities is set equal to 1 (i.e. is TAKEN AS
>> GIVEN!). This one commodity, called the numeraire, is arbitrarily
>> chosen and is not necessarily real money. (Indeed in a system of paper
>> money, the numeraire commodity cannot be real money). Sraffa's
>> innovation was to take as the numeraire the "standard commodity", which
>> is a composite commodity with peculiar characteristics and which has no
>> relation to real money at all. Sraffa's relative prices in terms of
>> the ideal "standard
>> commodity" have nothing to do with real world prices; they are only a
>> solution to a logical problem with Sraffian theory ("the invariable
>> measure problem" in order make prices invariant to changes in the
>> distribution of income between wages and profits).

> So now we know that you opened the PCMC for the first time only yesterday. I
> hope i can take credit for making you do so. The book is a hard one to
> understand. It will take some time, but will put you on the right track.

Readers, please note that my serious criticism of Sraffa's theory - that
its numeraire prices, especially with the standard commodity as the
numeraire, have nothing to do with real world prices - is met, not with a
response to this criticism, but with another personal insult. The insult
is not appreciated and the criticism remains unanswered.

> > Fred:
> > Therefore, we can see that Sraffa's theory is also determinant "only up to
> > a scalar multiple", just like Marx's theory. In this respect, so roundly
> > condemned by Ajit, Marx's theory is no worse than Sraffa's theory. And
> > the fact that Marx's theory is trying to explain real world prices and
> > real world profit makes it preferable to Sraffa's theory, which is only
> > trying to determine hypothetical numeraire-prices, which have no relation
> > to real world prices and profit.
> ____________________
> Now you must know that for your theory "only up to a scalar multiple" does not
> hold. As far as Sraffa is concerned, it does not matter which commodity you
> choose, take gold if you like, the price ratios will remain the same.

This is similar to what I am saying about the role of m in Marx's
theory. If m changes, all the absolute monetary magnitudes change
proportionality, so the ratios among these monetary magnitudes remain the

> > Fred:
> >
> > How can anyone who accepts such a highly unrealistic theory like Sraffa's
> > criticize Marx's theory for failing to provide a complete explanation of
> > the determination of the value of money in his theory of real world prices
> > and profit? I think it is far better to have a partial explanation of
> > reality than a partial explanation of hypothetical
> > numeraire-prices. Especially when Marx's theory has such substantial
> > explanatory power of important phenomena of real capitalist economies.
> _______________________
> Please leave Marx out of it, because, in my opinion, you don't understand
> Marx. So leave the poor guy alone. Your above rhetoric only shows that you
> have not understood Sraffa at all. But as i said, it will take time. Nobody
> can understand Sraffa in one day. Cheers, ajit sinha

Again, a serious criticism - that it is better to have a partial
explanation of real world prices than a partial explanation of
hypothetical numeraire prices - is met with an insult. Again, the
criticism remains unanswered.

Please see my next post for a response to Ajit's "please leave Marx out of

I look forward to further discussion (without the insults, please).


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