[OPE-L:3981] Re: Re: Surplus value or surplus argument?

From: Ajit Sinha (ajitsinha@lbsnaa.ernet.in)
Date: Fri Oct 06 2000 - 01:57:15 EDT

Steve Keen wrote:

> Thanks Fred,
> Yes it is proportionality in the strict sense of the word, but it is no
> longer Marx's theory in the strict sense of the word.


No it is not proportional Setve! Fred is entirely wrong. And he is wrong because
he does his mathematics upside down. He first "defines"

S = m.Ls (here m is supposed to be "given" but unknown, and Ls is definitely an
unknown, otherwise he will not need his other two equations. And from this he
keeps claiming that his S is proportional to Ls with the proportionality factor
m). Now since his Ls is unknown, he defines Ls as

Ls = (L - Ln), now in this equation L is supposed to be known but Ln is still
unknown. Therefore, he goes for his third equation where Ln is defined as

Ln = V/m, where V is supposed to be known and m is the "given unknown". So
ultimately what his S turns out to be?

S = (m.L - V), as you have correctly put in your later part of the post as
"Surplus is an unobservable number times L, minus workers' wages?"

Therefore, contrary to Fred's claim S is not proportional to anything with the
proportionality factor m. Cheers, ajit sinha

> This is where I believe the divide arises between myself, Ajit, Gil et al
> on one broadly defined side of this debate (possibly including Allin & Paul
> on this issue), and yourself. Both sides are saying that Marx's theory as
> he wrote it can't be sustained, in that strict proportionality between
> surplus value and necessary labor can't be correct.
> The side I'm on in various ways says that therefore the labor theory of
> value must be erroneous--myself by saying that it's contradicted by Marx's
> own logic, Ajit & Gil by supporting Sraffa's input-output critique, Allin &
> Paul by saying that as an empirical issue, there's a reasonable but not
> strict correspondence and that's OK for research.
> You are saying that so long as we bring in an unobservable modifier m, then
> we can make S proportional to V when this modifier is part of the equation.
> Well, mathematically, perhaps; but what does this do to the simple Marxian
> clarion call that all surplus arises from labor (with which I don't agree,
> of course, but it's a very large part of why people are initially attracted
> to Marx)? Surplus is an unobservable number times L, minus workers' wages?
> Any potential recruits who heard that argument at a first meeting with the
> IS would wobble out of the meeting hall and go looking for a less confusing
> belief system.
> This of itself doesn't concern me too greatly, but it's a sign of the
> divide which exists between the simple message which recruits people to an
> initial interest in Marx, and the complex footwork needed to sustain a
> comparable message once you look very closely at the argument.
> The point which does concern me is that, because of this logical conundrum,
> Marxian economics hasn't even got out of the starting blocks yet 130 years
> after Charlie first penned Das Kapital. We may be about to enter
> capitalism's biggest crisis since the Great Depression, and yet rather than
> debating this, the premiere minds in Marxian economics are still debating
> how to derive prices from values.
> Rather than being a tool which can "lay bare the workings of the capitalist
> system", this looks more like a poorly designed tool which has turned its
> advocates into a religious sect a la Life of Brian, rather than, as Marx
> and Engels saw themselves, intellectual leaders of the working class.
> Cheers,
> Steve
> At 12:21 PM 10/5/2000 -0400, you wrote:
> >
> >This is a response to Steve K's (938).  Steve, thanks for your several
> >recent posts, which I have read and thought about and hope to have the
> >time to reply soon.
> >
> >
> >On Tue, 3 Oct 2000, Steve Keen wrote:
> >
> >> At the risk of insulting Fred, might I suggest that one reason for the
> >> impasse with Ajit is over Fred's use of the word "proportional" to
> >> characterise the relationship between S and L in the formula:
> >>
> >> S = (m.L - V)
> >>
> >> which (correct me if I'mn wrong, but...) Fred agrees characterises his
> theory?
> >>
> >> Strictly speaking, this formula can only be "proportional" if V=0. If so,
> >> then for example, if m=2, S= 2*L for all values of S and L. If, however,
> >> V>0, then the "proportionality" this formula gives varies as S and L vary.
> >> For example, if m=2 and V=2 then S/L=0 for L=1, S/L=1 for L=1.5, S/L=2 for
> >> L=2, and so on.
> >>
> >> That is not proportionality in the strict meaning of the word.
> >>
> >> Cheers,
> >> Steve
> >
> >
> >Steve, I think you misunderstand what I am saying.  I am not saying that
> >"S is proportional to L". Rather, I am saying that "S is proportional to
> >Ls" (S = m Ls), where Ls = (L - Ln), and Ln = V/m.
> >
> >On the basis of these definitions, and using your example, S is indeed
> >proportional to Ls, with m as the factor of proportionality.  This can be
> >seen from the following table, using your example:
> >
> >m      L       V       S       Ln      Ls      S/Ls
> >
> >2      1.5     2       1       1       0.5       2
> >
> >2      2       2       2       1       1         2
> >
> >
> >Is not this proportionality "in the strict meaning of the word"?
> >
> >
> >Comradely,
> >Fred
> >
> >
> >P.S.  By the way, why do you think that I would be insulted by your
> >post?  You present a clear logical criticism, without gratuitous
> >insults.  I appreciate your post.
> >
> >
> Dr. Steve Keen
> Senior Lecturer
> Economics & Finance
> University of Western Sydney Macarthur
> Building 11 Room 30,
> Goldsmith Avenue, Campbelltown
> PO Box 555 Campbelltown NSW 2560
> Australia
> s.keen@uws.edu.au 61 2 4620-3016 Fax 61 2 4626-6683
> Home 02 9558-8018 Mobile 0409 716 088
> Home Page: http://bus.macarthur.uws.edu.au/steve-keen/

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