[OPE-L:3921] Re: Re: Re: Re: m in Marx's theory

From: Fred B. Moseley (fmoseley@mtholyoke.edu)
Date: Sun Oct 01 2000 - 09:14:44 EDT

This is a reply to Ajit's latest (3900).  Ajit, thanks again.

On Fri, 29 Sep 2000, Ajit Sinha wrote:

> when a theory takes something as given, it either must take it as
> empirically observable in principle or must have a sense that that
> variable is determined in a theoretical space that lie outside the scope
> of the particular theory. 

No, Ajit, that is YOUR understanding of the nature of an economic theory -
that its givens must be explained OUTSIDE THE SCOPE of the theory
(i.e. that a theory is characterized by a strict division between
exogenous and exogenous variables).  

But that is not the only kind of economic theory.  I think that Marx's
theory is a different kind of theory.  I that think in Marx's theory, some
variables are initially taken as given and then later explained within the
theory.  I have argued that constant capital and variable capital are
variables of this nature.  So is m.  I think this is one of the senses in
which Marx's logical method can be described as "positing the
presuppositions".  The presuppositions are initially taken as given, and
then the presuppositions are posited.  The variables that are initially
taken as given (C, V, and m) are not determined outside the scope of the
theory, but rather inside the theory.  But not explained immediately, at
the beginning stages of the theory.  Rather the explanation of these
initial givens comes at later stages of the theory.  

It seems to me that a theory that eventually explains its initial givens
from within the theory is better than a theory that does not explain its
initial givens at all. .

So, Ajit, you cannot just decree, by methodological fiat, that the initial
givens of a theory must be explained outside the scope of a theory.  There
are other types of theories that are permissible, and even seem to be
preferable.    It is entirely legitimate to take m as given in Marx's

> But your "m" is simply unknowable, though all
> your other quantitative variables depend upon its value. And this is not
> legitimate by the standard o any theory I know of.

Several points in response:

1.  I did not say that m is in principle unknowable.  Only that we don't
yet have a theory of m.  Actually, we have some ideas about how m is
determined with commodity money (as the price of production of gold), but
we have less idea about how m is determined with paper money.  But I think
that such a theory of m with paper money can and should be developed.  

2.  Even though the absolute magnitudes of the monetary variables depend
on m, the ratios among the monetary variables do not depend on m.  And the
ratios (e.g. the rate of surplus-value, the rate of profit, etc.) are what
is important for Marx's theory.  More on this point below.

3.  In addition, as I have emphasized in previous posts, there are the
other important qualitative conclusions of Marx's theory which also do not
depend on the determination of m, e.g. the conflict over the working
day.   Whatever determines m, it remains true that a longer working day
will produce more money new-value than a shorter working day.  Hence, it
follows from the labor theory of value that  there is an inherent conflict
in capitalism over the length of the working day.  It is not necessary to
provide a complete explanation of the determination of m in order to
conclude from the labor theory of value that there is a conflict over the
working day.  More on this point below also.  

In sum, Marx's theory does not become a "theory of nothing" because it
does not explain the determination of m.  Marx's theory still provides an
explanation of important phenomena, even without the full determination of

> Your statement that "If m changes, then all the monetary
> variables change proportionally, so that the ratios among these monetary
> magnitudes remain the same." is not correct has been proven by me repeatedly
> mathematically, as well as by Gil and Paul C. All you have to do is to check
> your own equations and you will know that this claim of yours is falls.

Ajit, I don't think you have "proven" even a single time that my statement
is incorrect.  I don't remember Gil and Paul C. commenting on this
particular point either; they can speak for themselves.  

I have argued that MARX ASSUMED that a change of m will change all the
monetary variables proportionally, from which it follows (as a matter of
mathematical logic) that the ratios among the monetary variables (the rate
of surplus-value, etc.) will not change.  I even typed out several
passages in which Marx explicitly stated both this assumption (a change of
m will change all the monetary variables proportionally) and the
conclusion derived from it (the ratios among the monetary variables will
not change).  You have not responded to these passages.  Instead you
repeat empty assertions.

In order to "prove" that my statement is incorrect, you have to show
either:  (1) that Marx did not assume that a change of m will change all
the monetary variables proportionally;  or (2) that the conclusion (the
ratios among the monetary variables will not change) does not follow.  

So far, you have done neither.  Therefore, you have proved nothing about
my statement, despite your repeated assertions.  

> >  Fred:
> > 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.
> _______________________
> These issues are not under dispute. Our debate is about your interpretation of
> Marx's transformation problem. And as you yourself now accept that these
> broader issues simply do not depend upon your 'monetary interpretation', you
> have yet again confirmed Steedman critique.

Ajit, you are raising a separate question here.  The question of the last
several posts has been: whether the lack of a determination of m renders
my interpretation of Marx's theory a "theory of nothing".  I argue, to the
contrary, that Marx's theory can still explain these phenomena, even
without a full determination of m.  You have not disputed this point, but
instead you raise a separate issue - that it is possible to explain these
phenomena by another theory.  But the fact that it might be possible to
explain these phenomena by another theory does not alter the fact that
these phenomena can be explained by Marx's theory, without a full
determination of m, which is the point under dispute in the present

So I conclude that it is entirely legitimate to take m as given in Marx's
theory.  Ajit has provided NO convincing reason why this logical procedure
is not legitimate.


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