[OPE-L:4028] Re: Re: Re: Re: Re: Fwd: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: TheTransformationProblem

From: Steve Keen (s.keen@uws.edu.au)
Date: Tue Oct 10 2000 - 01:31:41 EDT


If you criticise HOPE and the JHET on that basis, then it shows you have
rarely if ever read them. Use that throw-away line for the AER or the EJ if
you like; most journals in the history of economic thought have somewhat
less ideologically driven standards. What applies amongst "professional
economists" does not necessarily apply to subgroups such as those
interested in the history of economic thought--though there are pockets of
mediocrity there too.
At 11:31 PM 10/8/2000 -0700, you wrote:
>>Dear Rakesh:
>>(1) Re: "your critique of the LTV, as it stands, is predicated on your
>>prima facie preposterous claim that Marx should have understood the use of
>>dead labor can equally be the source of new value as surplus labor"
>>My critique of the LTV is predicated on the proposition that Marx's
>>dialectics contradicts the LTV. You may believe the claim preposterous--the
>>referees for the History of Political Economy and the Journal of the
>>History of Economic Thought did not. You can check the 1993 issues of the
>>latter publication if you so desire.
>Steve, why invoke the authority of the editors of journals of 
>bourgeois economics to me?  We both know that I do not think the bar 
>is very high to criticize Marx among professional economists.
>On the other hand, the bar is higher to criticize, say, general 
>equilibrium theory, the neoclassical synthesis, interdependence or 
>realist schools in political science from a marxist perspective, the 
>misuse of game theory or rational choice theory,  various forms of 
>genetic reductionism presently purveyed in the popular press, the 
>pesticide treadmill, the ideology of the free press, the foundational 
>importance of the eugenic vision in the development of the supposedly 
>neutral tools of statistical analysis or population genetics, the 
>great importance of  slavery in the early stages of capital 
>accumulation, the persistence of gender and racial discrimination in 
>the labor market, the overuse of computers by children in the 
>schools, lax regulation of lead exposure.

On which fronts you may find my forthcoming "Debunking Economics"
interesting. However, the chapter on Marx will rile the shit out of you.
>>(2) One justified aspect of the TSS attempt to rebut Sraffian critiques is
>>that they apply a static yardstick to a dynamic theory. However, it is
>>possible to grant that proposition and still undertake a dynamic version of
>>that critique. This would involve setting up a system in which all rates of
>>change were constant as a "dynamic equilibrium" and then seeing whether the
>>TSS characterisation was still sustainable when organic compositions of
>>capital differed between industries. I expect that TSS would fail this test.
>Yes but you said that your other work is about disequilbrium 
>dynamics, no? So why allow that in every facet of economics but the 
>resolution of the transformation problem? This is what has me 
>confused. You said I had created a false intellectual opposition, 
>though it seems to me that the contradiction is in your own 
>pronouncements. That said, I certainly don't think that the absence 
>of a transformation problem means the Marxian labor theory of value 
>is above criticism on a variety of other grounds.

Rakesh, my point is that if one applied a proper dynamic crucible to the
TSS approach, I believe it would show that a transformation problem was
still in existence. For the reasons I gave, I have no interest in taking on
the extremely difficult task of turning that conjecture into a proof. In
other words, I am quite willing to apply dynamic tools to the
transformation problem, and I expect they would show that TSS has not
resolved it.

>>  I regard your comments on
>>this issue as gratuitous and completely irrelevant to my own way of
>>thinking. If you wish to characterise me somewhat more accurately, then I
>>suggest you read what I have actually published.
>I wasn't wishing to characterize you. Just noted that there is a very 
>interesting case of someone who tried to maintain both equilibrium 
>thinking and dynamics at the same time. Some have said that 
>equilibrium for schumpeter is nothing more than a counterfactual 
>demonstration of just how different a social system would be if there 
>were no innovation; others have said equilibrium represents a real 
>force which either entrepreneurs must break through to get their 
>superprofits or which keeps the economy together despite on going 
>technological innovation; yet others have said it is simply an 
>unresolved contradiction and Schumpeter can only break equilibrium by 
>the deus ex machina of credit or the postulation of the special 
>energies of the entrepreneur.  I wish it had been the first but it is 
>surely some mixture of the last two kinds of things (equilibrium as 
>real force and unresolved contradiction), no?
>So if I was characterizing you, the point was that you seem to be 
>exhibiting the same kinds of contradictions as the greatest of 
>bourgeois economists. Maybe it's an insult, mabye not.
>Yours, Rakesh

Perhaps you should check some of my papers to see why I did take that aside
as an insult--though hardly one on which I would throw down a gauntlet, I
might add! -:) I have always argued against equilibrium thinking in
economics, as is quite evident in my published papers.

Early visionary economists like Schumpeter and Marx can be forgiven for
falling into equilibrium thinking on occasions, or for misunderstanding the
relationship between equilibrium and dynamic thinking, because the real
differences have only been clearly elucidated in the last 20 years. I still
see many papers by economists where they make fundamental errors in
dynamics, because economics is probably the area in which dynamics is most
poorly understood. For example, I recently refereed a paper where the
author had a differential equation for the rate of change of prices, and a
price equation to work out its initial level. I had to gently inform him
that the former made the latter superfluous.

This does raise one thing which I find somewhat bemusing in the TSS
approach: it appears to endow Marx with the ability to comprehend issues
which have only been mathematically resolved in the last 30 years or so.
That said, he had easily the best grasp of the dynamics of capitalism of
any economist, and his ability to think in cyclical terms is phenomenal.

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
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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