[OPE-L:6337] Re: Re: Re: Re: Re: Re: Re: recent science and society and Fred M's interpretation (fwd)

From: Rakesh Bhandari (rakeshb@stanford.edu)
Date: Wed Jan 16 2002 - 19:48:37 EST

>Hi, Fred.  You write:
>>In brief answer to your question, Marx's theory explains the determination
>>of the general rate of profit on the basis of law of value at the macro
>>level, which is then taken as given in the determination of prices of
>>production at the micro level.  No other theory is able to make this
>>crucial connection.
>This statement raises more questions, at least in my mind, than it answers.
>1)  What is the "law of value" in this context, and what mechanism assures
>its "law-like" operation at the macro level, understood as analytically
>prior (otherwise it could not be "taken as given") to the determination of
>prices at the micro level?  And if there is no clear mechanism, why should
>this be considered a valuable or valid contribution?

Gil, analysis is fine and much needed in fact, but you have to do 
some work to understand the other side, except when they question 
your points if this is to be a list for the development of Marx's own 

Also it would be helpful that if in this discussion that you don't 
come across as suggesting that the tradition that you represent has 
everything worked out--there is not a clear statement on Marx's 
theory of money and general crisis from Roemer and you. Which at one 
level is absurd.  So just among the people here on OPE-L you have to 
recognize that your hard questioning of others can come across as a 
refusal to turn the analysis inward on the gaping holes in the 
tradition that you represent. yes, you think there are big problems 
with chapter 5 and value analysis is unneeded for the theory of 
exploitation and/or illogica due to the putative transformation 
problem (ha!no one can make the two equalities stick!!). You think 
Andrew  K can't do basic math.  Everyone is familiar with your 

  But what we have not heard from you is any kind of critical analysis 
of your own system that you tell us takes us past Marx's Al Magest 
(is that the Arabic for Ptolemy's great work or Euclid's) to the 
Copernican world of John Roemer.

To tell you the truth, I think many people here think the problems 
are so grave and obvious in analytical marxism--and analytical 
marxists are so unwilling to come to grips with the obvious--that 
it's a waste of time to criticize their interpretations. For example 
in Roemer, ed. volume I think the only systematic treatment of crisis 
is Przeworski's wage squeeze kind of theory but such theory has much 
difficulty accounting for movements in the profit rate, and Fred has 
argued that his theory does not suffer from the same problems.

In terms of this question, I think we should emphasize--as I have 
said in another context--how Marx's theory extends Ricardo's critique 
of the adding up theory of price (Duncan suggested to me that I pay 
careful attention to Dobb's summary here, and II Rubin is very 
helpful too). So for Ricardo *the total value* of the product is 
given in advance, so any increase at the micro level of the price of 
labor (wages) will invariably lead to an inverse change in the so 
called price of capital (profit).

Of course in terms of Marx's price of production theory, one 
capital's ability to beat off the average rate of profit does not 
necessarily add more surplus value to the system but rather 
redistributes a given magnitude of value that is fixed prior to 

This complicates the theory of counter-tendencies for some 
counter-tendencies beat off fall in the average rate of profit by 
adding to the surplus value in the system as a whole (say a system 
wide rise in s/v) while other counter-tendencies stave off the fall 
in the rate of profit for some capitals at the expense of others.

But total value (i say total value instead of surplus value) coming 
before price and price changes in themselves not changing that total 
value seem to be pretty basic to Marxian theory. This is why I would 
hold total value=total direct price=total price of production in a 
complete transformation if one were in fact so needed.

I am not saying that this is correct. But surely if you want to 
criticize the analytical priority given to value, you should say why 
Ricardo and Marx did just that in the course of critiquing the adding 
up or cost of production theory of price and then tell us why this is 
the wrong way to go.

As for the law of value, I don't think anything too complicated is 
meant other than economic magnitudes (the sum of prices of 
production) are determined by abstract labor time 
expenditures--though of course for Marx indirectly.


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