[OPE-L:7432] Re: Re: Re Aoki on K and M on money

From: Gil Skillman (gskillman@mail.wesleyan.edu)
Date: Fri Jul 19 2002 - 15:07:48 EDT

Rakesh, you write

>re 7430
>Hi Gil,
>Money can have no other role than numeraire in a system of simultaneous 

As I think Gary mentioned earlier, there is a potential equivocation here 
with respect to the term "simultaneous."  It's true that the standard 
Sraffian framework involves a system of equations that might be solved 
"simultaneously" to yield values for some subset of prices of production, 
profit rate, and wage rate.  It does not follow, however, that the 
equations in this system must represent economic processes that *occur* 
simultaneously.  Quite to the contrary, it is possible (and has been done) 
to introduce time-specific variables in the Sraffian framework, which among 
other things makes it possible to reflect the function of money as a store 
of value--making it more than simply a numeraire good.

>(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 solution.

No more than it is an "emasculation of Marx's theory" to posit that 
commodities exchange at their respective values--a condition he clearly 
rejects as empirically descriptive or analytically general yet imposes as 
of the end of KI Ch. 5--or that workers are necessarily paid a wage 
corresponding to the value of labor power--a condition he assumes beginning 
in Ch. 6 but subsequently relaxes in his analysis of capitalist 
accumulation in Ch. 25.  The point is that these additional aspects of 
money are simply *not at issue,* and thus *nowhere invoked,* at the level 
of abstraction pursued by Marx in KIII Ch. 9, to which the Sraffian 
analysis most directly speaks.

>(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.

I believe this claim is built on the confusion between mathematical and 
temporal simultaneity noted above.  It *is* possible to introduce time in 
the Sraffian formalization, and indeed has been done.  Thus, if one were to 
read Marx in KIII, Ch. 9, as insisting that output prices were determined 
"later" than input prices for the corresponding goods, and were thus 
generally unequal to them, this complication could readily be incorporated 
into the Sraffian framework.  But I don't think he insists on this.

>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 

Fair enough.  I'll just note again that there is absolutely no barrier to 
time-subscripting variables in the Sraffian framework.

>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.

Interesting.  If you have a moment, could you summarize the key point or 
points at issue in that exchange?

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

Perhaps, but as I read it the discussion between Gary and Fred involves a 
narrower question:  is it logically coherent, in general, to insist that 
the rate of profit is determined analytically *prior* to prices of 
production?  And one can use a Sraffian formalization *with* money, that is 
no more or less explicitly temporal than Marx's analysis in KIII, Ch. 9, to 
establish that this claim is *not* logically consistent in general.  To put 
the point another way, since Marx nowhere *rules out* the possibility of a 
steady state in which respective input and output prices are equal, even if 
temporally separated, this Sraffian demonstration is unavoidably relevant 
to Marx's--and Fred's--categorical claims.


>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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