[OPE-L:5507] Re: the assumptions necessary for the two equalities to hold?

From: Gerald_A_Levy (Gerald_A_Levy@email.msn.com)
Date: Mon May 07 2001 - 08:12:00 EDT

Re Fred's [5504]:

Previously I asked:

> Fred (and others): could you please specify
> precisely what assumptions are required for the
> > two equalities to hold?
> > The next question, then, might be: what
> > happens  on a more concrete level of analysis
> > when these assumptions are dropped (snip,JL)

Fred responded:

> Thanks for your question and sorry for my delay > in responding.

No doubt, an increase in  the production of
absolute surplus value for the Mt. Holyoke
College capitalist firm meant that you had less
time for OPE-L  recently.  (for reference, see
5474). Anyway, it's good to hear from you again.

> The assumptions are: (1) the same quantities of constant capital and
> variable capital are taken as given in the determination of both values
> and prices of production and (2) the total surplus-value is taken as given
> (as determined in Volume 1) in the determination of the general rate of
> profit and prices of production in Volume 3, from which it follows that
> the total profit must be equal to the total surplus-value.
> These assumptions are not dropped at later stages of the analysis.

Well ... I think you misunderstood my questions
(which are also reproduced above). When I ask
whether the assumptions required for the two
equalities to hold are dropped at a more concrete
level of analysis, I  did *not*  limit my concern
to the levels of concretion associated with
_Capital_.   Once this is recognized then one has
to ask *even if one accepts your position that
the two equalities are taken as given in the level
of analysis associated with _Capital_*, whether
these equalities will *continue* to hold as the
level of concretion advances beyond _Capital_.
E.g.  are they still assumed to hold (and are
_all_ of the assumptions that were made that
led to the 'given' two equalities still valid?) at
the level of analysis of 'competition' (i.e. 'many
capitals' rather than 'capital in general') which
was abstracted from in _Capital_?  Are these
equalities and the assumptions underlying them
still valid when we arrive at the level of
concretion of the other two major social classes
(Books 2 and 3), the state (Book 4), foreign
trade (Book 5), and the world market and
crisis (Book 6)?

Let me give a couple of examples of what I am
talking about. For the equality of value and
prices of production to hold, then prices of
production must be brought into existence.
What happens if, for instance, there are
significant barriers to the formation of prices
of production in the form of the lack of mobility
of capital and labor?  What happens if there is
a 'dual economy' in which there are significant
differences in market power, etc. between the
two segments of the economy?  If, then, POP
no longer exist (assuming that they ever did),
clearly there can't be an equality between the
sum of value and the some of nothing.

Even if one accepts your explanation for the
equality between the sum of surplus value and
the sum of profit (above and in 5503) in
_Capital_, that does not settle the question. Thus,
you write that surplus value can't be increased in
circulation (agreed!)  and that its magnitude then
can't be decreased either following production
(this is how I interpreted your response to
Rakesh). Here we do not agree. I think that Marx
*assumed*  that the magnitude of s in Vol 1
was the same magnitude of s in Vol 3 (here I
agree with you), but that doesn't mean that the
magnitude of s that was assumed to exist at
the level of analysis of _Capital_ is necessarily
the same magnitude of s that exists at a more
concrete level of analysis. Thus, value and
surplus value  _can_ be "lost" and it can be "destroyed" and not merely
redistributed once
we proceed beyond the _assumptions_ of

I, once again, believe that a critical presentation
of the political economy of capitalism MUST
challenge its own assumptions.  Thus, if we
take something as 'given' at one level of the
analysis we MUST ask whether it continues to
be appropriate to take it as given as the level
of concretion of the analysis advances.
WE CAN NOT simply make assumptions at one
level of analysis and 'justify' their continued use
by the fact that they have been employed at a
prior level of analysis. Here, I think the method
associated with systematically and dialectically
reconstructing in thought the subject matter of
capitalism must differ from, say, the axiomatic
method in math.  In math, axioms have a place.
I am very dubious of their role in political

Marxists and other heterodox economists have
often ripped neo-neoclassical analysis for their
assumptions.  Marc Linder's books on
Samuelson and Robinson's and Steedman's
critiques of Heckscher-Ohlin-Samuelson trade
theory come to mind.  I think these critiques
of marginalist theory are valid -- any theory
that purports to be something more than dogma
must challenge the assumptions that it makes.

See what I mean?

In solidarity, Jerry

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