[OPE-L:4442] Re: Re: Re: Re: Re: Re: Technical change and general truths

From: Steve Keen (s.keen@uws.edu.au)
Date: Sun Nov 05 2000 - 02:48:29 EST

Hi Fred,

Yes, I agree that I used harsh language, and I stand by it.

As you put it, this argument is that "the total amount is LOGICALLY
DETERMINED prior to the determination of the individual
parts". My systems-oriented mind can't help but ask 'by what mechanism?'.

To me, this argument is as specious as the one Friedman used to define
uncertainty, that individual incomes are unknown, but aggregate income is
known and never changes.

Both propositions are balderdash, irrespective of the politics of the
authors who uttered them. Unless these 'variables' are determined in some
aggregate fashion by some meaningful system, and then split up between
individuals, then the alleged mechanism is nothing other than a nonsense
abstraction used to sustain a nonsense theory--again, whether that theory
be marxian or neoclassical.

In other words, if capitalism is a disaggregated system of production and
distribution, then you have to work from the units up, and not from the top
down. This is not an argument for methodological individualism of course,
nor a denial of the fact that perceptions and magnitudes at the systemic
level affect its components.

At 05:00 PM 11/3/2000 -0500, you wrote:
>This is a belated response to Steve K's (4371).
>On Tue, 31 Oct 2000, Steve Keen wrote:
>> Sorry Rakesh,
>> But I regard this particular argument of Marx's:
>> "As Fred says, the macro magnitudes are determined  prior to, and are 
>> determinative of, the micro magnitudes of the rate of profit and the 
>> prices of production (see also Blake, 1939; Mattick, 1983)."
>> (for once I can't quickly locate the original by Marx, but I do know it)
>> as one of the greatest kludges he ever attempted to pull. That capitalism,
>> which is inherently a competitive class system, should somehow operate as a
>> true collective of capitalists as to the division of surplus-value, I
>> regard as pure nonsense.
>Steve, this is harsh language.  Are you saying that it is logically
>impermissible to assume that the total amount of surplus-value produced in
>the economy as a whole is determined prior to the division of this total
>amount into individual parts?  If so, on the basis of what grounds?
>Marx did not argue that capitalists consciously act to collect all the
>surplus-value before they divide it up.  But rather that the total amount
>is LOGICALLY DETERMINED prior to the determination of the individual
>parts.  The reason why Marx determined the total amount first is that,
>according to his theory, all the individual parts of surplus-value have
>the same source: the surplus labor of workers.  Capitalists certainly
>compete over this division of the total surplus-value; but that does not
>preclude the logical determination of the total prior to its
>Marx called capitalists "hostile brothers": they are brothers in that they
>all live off the surplus labor of workers, but they certainly have their
>hostilities over the division of this booty.  
>Why is this method of determination not permissible?
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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