[OPE-L:4154] Re: Re: RE: Part Two of Volume III of Capital

From: Steve Keen (s.keen@uws.edu.au)
Date: Thu Oct 19 2000 - 02:52:33 EDT


The key problem I have with your approach, and I *hope* that at least some
people on OPE share this concern, is that your procedure makes it
effectively impossible to put what you see as Marx's logic into a format in
which it can be tested for internal consistency. Popper described this kind
of behaviour as the hallmark of a pseudo-science. While the philosophy of
science has moved on a long way from Popper, his litmus test between a
science and a non-science--that the former makes statements which can be
falsified, whereas the latter makes it impossible to either verify or
disconfirm itself--is still accepted.

In other words, in the name of saving Marx from what you see as unjustified
criticism, your approach effectively makes it impossible to make any
criticism at all.

I for one do not wish to "save" Marx in this fashion.

At 22:14 18/10/00 -0700, you wrote:
>Duncan K Foley (dkf2@columbia.edu)
>Mon, 15 Jan 1996 12:34:48 -0800
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>two qestions and a proposal"
>If you write down an explicitly disequilibrium model with time subscripts
>differentiating commodities at different times, thus allowing for prices
>of inputs and outputs to differ, one solution will be the equilibrium
>prices where the inputs and outputs have the same (relative) prices. This
>is also the easiest solution to analyze, and its existence is a good
>indication that the equations make sense. As an historical aside, this
>seems to be the approach Marx took, for example, in his work on
>reproduction schemes.
>As I have tried to show in my previous post, this reference to 
>equilibrium prices in the reproduction schemes turns a  justifiable 
>simpflying assumption (contant value) in the context of the analysis 
>of a circulation problem into a controlling methodological postulate 
>for all economic analysis.  As I have already pointed out, Marx is 
>explicitly talking about why prices of production change in vol 3, 
>part 2: the first reason, a change in the general rate of profit, 
>manifests itself clearly only in the long run, leaving us to assume 
>that manifest shorter term changes in prices of production are caused 
>by changes in the values of the commodities themselves. There are 
>countless references to changes in productivity, making it 
>unbelievable that Marx had not abandoned the assumption of constant 
>value or unit prices. There is simply no methodological reason to 
>import the completely unrealistic, albeit simplfying, conditions from 
>vol 2 into volume 3. And if Marx's value-theoretic equations for r 
>and prices of production make no sense due to the misuse of 
>assumptions  retained because they give us "the easiest solution to 
>analyze", why should we leave Marx's value theory vulnerable on such 
>(flimsy) grounds?
>Is it not possible to save honor all sides?  There is indeed a 
>transformation problem in terms of the easiest solution to analyze 
>(equilibrium prices or simple reproduction); there need be no 
>transformation problem in conditions which pay the least respect to 
>reality, however more difficult these realistic conditions may be to 
>Would any other theory but a revolutionary critique of bourgeois 
>society be thought to have fatal logical problems if only the 
>introduction of reality was needed for it to make sense?
>All the best, Rakesh
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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