[OPE-L:7534] RE: Fred's remarks on Marx, Sraffa & Rents

From: mongiovg (mongiovg@stjohns.edu)
Date: Thu Aug 22 2002 - 16:10:52 EDT

>Marx's theory explains absolute rent on the basis of its fundamental
>theory of value.  Sraffa's theory does not explain absolute rent at all,
>and, at best, can only incorporate an external, ad hoc explanation of
>absolute rent into its system of equations.  Isn't this an example of the
>superior explanatory power of Marx's theory of value and price over
>Sraffa's theory?
I read Marx's chapters on rent many years ago, and I confess I did not derive 
much benefit from them.  Here's what I recall of my impressions of them.  
First, I don't recall the analysis to have been neatly connected with his 
value theory, at least not in the sense that rents are explained "on the 
basis" of labor values.  If memory serves, Marx's explanation of absolute rent 
amounts to this: Ricardo's account of rents must be inadequate since no 
landowner would be willing to rent the marginal land if the rent on it were 
zero. I don't mean for this to sound dismissive: I actually think Marx has a 
point.  But I don't think it amounts to a powerful critique of the Ricardian 
notion of rent, and I don't see what it's got to do with Marx's value 
analysis. The point about absolute rents always struck me as a bit of 
tidying-up on Marx's part; for the most part, he did not object to Ricardo's 
claim that value is regulated by the conditions of production on the marginal 
piece of land.

>I think Marx's theory can be defended precisely because it provides a
>superior explanation of how capitalism actually works.  A brief summary of
>the superior explanatory power of Marx's theory, all based on the labor
>theory of value, includes:
>1.  Marx's theory provides a superior theory of MONEY.  Marx's theory
>explains the necessity of money in a commodity-producing economy on the
>basis of its fundamental labor theory of value.  Sraffa's theory does not
>explain money at all, and can even be formulated without money at all, in
>terms of a non-money numeraire.  Indeed Sraffa's preferred numeraire is
>his standard commodity, which is certainly not real money.  I looked up
>"money" in Sraffa's index and was not surprised to find that it is missing
>2.  Marx's theory explains the CONFLICT OVER THE WORKING DAY,
>and Sraffa's theory does not.
>3.  Marx's theory explains the CONFLICT OVER THE INTENSITY OF LABOR,
>and Sraffa's theory does not.
>4.  Marx's theory explains INHERENT TECHNOLOGICAL CHANGE,
>and Sraffa's theory does not.
>5.  Marx's theory explains CYCLES, and Sraffa's theory does not.
>What good is a theory of distribution and the rate of profit
>if it cannot explain cycles?
>6.  As discussed above, Marx's theory explains absolute rent,
>and Sraffa's theory does not.
>(For further discussion of the impressive explanatory power of Marx's
>labor theory of value, please see my paper, "Marx's Economic Theory: True
>or False? A Marxian Response to Blaug's Appraisal," in Moseley (ed.),
>*Heterodox Economic Theories: True of False?*)
>And, on the other side, what phenomena can Sraffa's theory explain that
>Marx's theory cannot explain?  NOTHING, I submit.
>The only possible advantage that Sraffa's theory has over Marx's theory is
>that Marx allegedly made a logical mistake in his determination of prices
>of production in Part 2 of Volume 3 (I suppose that this is what Gary is
>referring to when he says Marx was "wrong-headed").  But I have argued in
>several papers that, if Marx's logical method is correctly understood,
>then Marx did not make this alleged logical mistake (others have made
>similar arguments).  If Marx did not commit this logical mistake, then
>Sraffa's theory is left with no advantage whatsoever over Marx's theory,
>and with the devastating disadvantage of much less explanatory power.
>All the important phenomena listed above are "central" to Marx's
>theory.  If one abandons Marx's labor theory of value for Sraffa's matrix
>algebra, then one loses the explanations of all these important phenomena.

Now I'm afraid we're going around in circles.  Fred maintains that Marx 
explains a wide range of issues that Sraffa never took up in his 1960 book, 
whereas  what is in contention is the soundness of the value theory--Marx's or 
Sraffa'-- itself.  The fact that Sraffa didn't talk about money, or about 
crises, or about the sociology of the workplace, in PoC says nothing at all 
about the soundness of PoC as an account of the features of capitalism it does 
consider. Nor does it address a point I have now made a number of times: I 
really don't see in what sense Marx's accounts of crisis, or technical change 
or labor intensity, or even money,need to be grounded in his labor value 
analysis.  With some relatively painless modification, every substantive point 
(or at any rate, every empirically defensible point) he makes on these issues 
can be made just as easily if one were working with a Sraffian account of 
value & distribution. Before anyone starts objecting that the modifications 
aren't painless, that they do violence to Marx's depiction of capitalism, let 
me reiterate my response to this objection: I have yet to see a defense of 
Marx's value categories that demonstrates their indispensability to a 
scientific explanation of observable phenomena; in the end the defense always 
rests on an ideological or metaphysical claim that I simply do not find 
convincing.  Nor do most of Marx's results depend on the adoption of his value 
categories (with the possible exception of the law of the falling rate of 
profit, the contingent nature of which marx himself acknowledged).

>This is another example of the superior explanatory power of Marx's
>theory:  Marx's theory is able to explain the exchange-value of gold as
>the real world money commodity, including rent, and Sraffa's theory
Hang on.  Sraffa's model can indeed explain the exchange value of gold as a 
money commodity, as it explains the value of any produced commodity.  Fred and 
others may not find the explanation satisfactory, and that's fair enough. But 
it is simply wrong to say that Sraffa's system can't address the issue.



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