[OPE-L:7536] Re: RE: Fred's remarks on Marx, Sraffa & Rents

From: Rakesh Bhandari (rakeshb@stanford.edu)
Date: Thu Aug 22 2002 - 23:40:03 EDT


You write in 7534:

>  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

But I don't understand what is ideological or metaphysical in 
maintaining descriptive focus through value or labor time analysis on 
the social relations between classes (see Frank Roosevelt, Amartya 
Sen, and others).

As noted before, the so called surplus can be seen in non value terms 
simply as a physical quantity of use values, but that does not mean 
it's metaphysical or ideological also to understand the surplus in 
value terms as the materialization of alienated unpaid labor 
performed by one class for another (see Carchedi).

Both the physical and value surplus are real entities; a value 
surplus is not a value in the normative sense, and so the implicit 
resort to a dubious positivism to dismiss the value dimension as 
ideological or metaphysical is out of place.

Now one can say that surplus value is metaphysical because the 
quantity of alienated unpaid labor has no economic significance--that 
is, what matters economically is the size of the surplus in physical 
or use value terms, not the size of the surplus in value terms.

What matters for economic analysis and the profit rate in particular 
is how big the surplus is in physical terms; whether it embodies a 
great or small quantity of unpaid labor time matters not a bit--you 
would seem to be implying.

So in an almost fully automated economy--and this is as a crucial 
thought experiment for economics as Schroedinger's Cat is for Quantum 
Mechanics as Spencer Pack  noted in Reconstructing Marxian 
Economics--what would matter for the economy and the profit rate is 
how big the physical surplus is, not how little unpaid labor time the 
physical surplus of an almost fully automated economy must perforce 

But this after all is a hypothesis.

And... at first blush.... it seems to be massively invalidated by the 
history of the most automated economy in the post WWII era--Japan 
where the profit rate has in fact fallen precipitiously.

It is after all in Japan that the productive powers have been put on 
newest basis, upon the basis of the most advanced mechanization; and 
it is in automatistic Japan that the falling tendency of the rate of 
profit has been closing on the system.

One has difficulty explaining this outcome with a use value or 
physical surplus theory of profit determination but not with the TSS 
value theoretic theory of profit determination (Ernst, Giusanni, 
Kliman, Freeman and other missing OPE-Lers) .

Though again I think there are problems with the TSS interpretation 
in terms of how the MEL is handled (Foley) and how the indirect 
stimulative effects of a rising physical surplus are ignored (me). 
Unfortunately, I haven't found David Laibman's criticisms persuasive, 
but then Frank Thompson would.

>  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).

I guess this comes to a difference in interpretation. Grossmann after 
all argued that Marx's whole system, including the reorganization of 
the structure of his magnum opus, was governed by the prospect of the 
shortage of surplus value.

>>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.

Good I find it unsatisfactory, and thought that you were backing off 
using gold as the numeraire. My main interest in that discussion has 
been to argue using the invariance condition of surplus value=profit 
on account of using gold as the unit of account.

At any rate, the adjustment period required for gold to exchange at 
either value or price of production has to be much longer than it is 
for freely reproducible commodities. They are working in different 
time zones, so to speak, and should not be dealt with in the same 
system of equations.

I also think demand plays a different kind of role in the 
determination of the exchange value of money than it does with freely 
reproducible commodities.

And we seem agreed that the gold sector could not earn the uniform 
profit rate, though you think mathematically this is no problem for 
your theory.

All the best, Rakesh

>  But
>it is simply wrong to say that Sraffa's system can't address the issue.

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