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>Ajit has argued, and Gil seems to agree, that "m must be known" in order
>for my interpretation of Marx's theory to be a theory at all. In other
>words, if m is not known, then my interpretation is not a theory of
At least as far as my response goes, Fred, you're changing the subject. I
didn't say anything one way or the other whether your interpretation can be
"a theory at all." I answered your request for listmember input on your
"But if m is not determined, then the magnitude of S is determined up to a
factor of proportionality."
This is demonstrably not true, using your own mathematical expression,
since for different (positive but unknown) values of m, S can be positive,
zero, or negative. Thus it cannot be said that S is "determined up to a
(positive but unkown) factor of proportionality, as you would have it.
Nothing you say below changes this assessment. If I have time I'll address
other aspects of your treatment of m later--it's an interesting question.
>It is not clear to me exactly what is meant by "m must be known". Known
>as an empirical magnitude or determined theoretically, or both?
>I have argued that it is not necessary to "know m" in either of these two
>senses in order to have a determinant theory of surplus-value and many
>other important phenomena in capitalist economies.
>I have argued that Marx's labor theory of value assumes that THERE IS AN
>ACTUAL M in the economy, i.e. that each hour of abstract labor does indeed
>produce a quantity m of money new-value. It is this actual m, that is
>assumed to exist, that is TAKEN AS GIVEN in Marx's theory of
>Even though we don't know empirically what this m is (and in principle we
>cannot know it empirically because abstract labor is unobservable), and
>even though we cannot provide a full theory of the determination of m,
>Marx's theory still assumes that an actual m exists, and it this actual m,
>whatever it is, that is taken as given in the theory of surplus-value.
>This is a perfectly legitimate and valid logical method - to take some
>variables as given and then to determine other variables on the basis of
>these given variables. In this case, to take the actual m (and other
>variables) as given, and then to determine money new-value and money
>surplus-value on the basis of these givens. Ajit (and Gil), what is wrong
>with this logical method?
>This given m does leave an element of incompleteness to the theory. But
>all theories are incomplete to some extent. All theories take some
>variables as given in order to determine other variables. And, as I have
>argued, this particular incompleteness does not affect the major
>conclusions of Marx's theory. If m changes, then all the monetary
>variables change proportionally, so that the ratios among these monetary
>magnitudes remain the same. In addition, other conclusions that do not
>have to do with quantitative magnitudes, but rather with important
>qualitative phenomena of capitalist economies (e.g. conflicts over the
>working day and the intensity of labor, inherent technological change,
>etc.) also do not require a theory of the determination of m.
>So the lack of determination of m is no big deal. It certainly does not
>mean that Marx's theory becomes a "theory of nothing". Rather, it is a
>theory of a whole lot of important phenomena, even though m is taken as
>There are certain other questions for which a theory of m would be
>necessary. The main example is inflation. So I think a high
>priority for Marxian theory should be to develop a more complete theory of
>the determination of m. However, a complete theory of the
>determination of m is not necessary to explain surplus-value and the other
>important phenomena that the three volumes of Capital are concerned with.
>Ajit will probably just reassert "because you don't know m, you don't have
>a theory of anything." But I think I have shown that this is not
>true. One can take m as given and still explain lots of important
>phenomena on the basis of this given m (and other givens). Ajit, please
>explain: why is it not logically valid to take the actual m as
>given? Isn't one allowed to take some variables as given in order to
>determine other variables? What is wrong with this logic?
>I look forward to further discussion. I would also of course appreciate
>comments from other listmembers as well.
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