[OPE-L:7431] Re: Re Aoki on K and M on money

From: Rakesh Bhandari (rakeshb@stanford.edu)
Date: Fri Jul 19 2002 - 13:47:25 EDT

re 7430

Hi Gil,
Money can have no other role than numeraire in a system of 
simultaneous equations.

(1) The equation for money appears alongside all the other 
commodities in such a formalization, and  the contradiction between 
commdities on one side and money on the other is thereby elided. But 
this is the basic abstraction of a monetary production economy. It is 
an emasculation of of Marx's theory of money to treat it as any other 
commodity except that it alone is set to equal one in an algebraic 

(2) Once one has put himself in the simultaneous straightjacket,  it 
seems impossible to make a logical transition to a level of 
abstraction in which the features of money which are temporally based 
can be assimilated. Through the introduction of money even C-M-C 
separates sale and purchase by time. But there is no time in the 
Sraffian formalization and thus there is no capitalism. The 
formalization thus does not capture the essential features of its 
purported object.

For these reasons, I am sympathetic to the TSS interpretation in 
which the givens are in the form of money and all variables are time 
subscripted. There then seem to be no logical problems in moving to 
what we are calling other levels of abstraction. Of course I wish the 
TSS members were present here to continue this argument at the level 
of sophistication which it deserves.

I shall not re-engage your ch 5 criticism (which I had recently 
mentioned) except to say that we are both agreed that putting out 
manufacture can be a form of surplus value production. By the way 
there is an important exchange between Michael Zmolek and Robert 
Albritton about putting out mfg in recent issues of the Journal of 
Peasant Studies.

Needless to say, I don't believe there is a transformation problem 
which requires the money-less, atemporal Sraffian formalization to 

Yours, Rakesh

>Rakesh, thanks for bringing the Aoki article to my attention.  I 
>hadn't known about the 1933 MS of Keynes's theory, and found Aoki's 
>discussion of the overlaps and contrasts with Marx quite 
>interesting.  But for what it's worth, so far as I can see nothing 
>Aoki wrote suggests a refutation of my earlier comments on the 
>applicability of Sraffa to Marx, **at the level of abstraction at 
>which Sraffian analysis engages Marx's analysis.**  Aoki notes that 
>both Marx and Keynes understand money to play a more complex role in 
>a capitalist economy than simply serving as a medium of exchange, 
>and that this more complex role allows for the possibility of 
>capitalist crisis.
>But first, none of these more complex aspects of money are at issue 
>in the portion of Marx's analysis under discussion with Gary and 
>Fred, roughly corresponding to Marx's argument in KIII, Ch. 9.  I 
>might add, in anticipation of what follows, that nor are these more 
>complex aspects of money at issue in Marx's analysis of the 
>"contradictions" in the circuit of capital in KI, Ch. 5. If you 
>allow  Marx to abstract from these complexities at this stage, then 
>it seems to me a similar latitude should be allowed to the Sraffian 
>framework when it addresses the same set of questions at the same 
>level of generality.  Second, I see no evident impediment to 
>incorporating the more complex functions of money in a Sraffian 
>framework if this is called for in some more all-encompassing 
>abstraction of capitalist processes, and see no reason to believe 
>that doing so would reverse the valid indictments of Marx's analysis 
>made possible by the Sraffian framework.
>>  My argument with Gil has been that Marx is not attempting a 
>>logical transition from simple commodity production to wage labor 
>>relations of production in chapters five and six.
>It would be pointless to re-engage this argument, but I will just 
>note for the record that contrary to your claim here I never argued 
>that Marx is attempting such a logical transition.  My main point is 
>that (whether or not you understand Marx to be positing a fully 
>elaborated capitalist economy at every step of his argument in KI, 
>Part 2), Marx explicitly developed logical basis for invoking 
>*price-value proportionality* (i.e. the analytical hypothesis that 
>commodities exchange at their respective values) as the necessary 
>theoretical starting point for analyzing surplus value is (1) 
>evidently invalid, involving a fallacious inference about necessary 
>conditions from a premise concerning sufficient conditions; (2) 
>contradicted by at least one version of the circuit of capital that 
>meets all of Marx's conditions for the existence of surplus value; 
>and (3) essentially misleading about the systemic conditions that 
>make it possible for capitalists to appropriate surplus value.
>But other than noting what my real argument on this point is for the 
>record, I don't mean to pursue this critique further in this forum. 
>There is a very different set of questions at stake in the exchange 
>between Fred and Gary.

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