Re: (OPE-L) Re: Which label: neo-Ricardian, surplus approach, or linear production theory?

From: Rakesh Bhandari (rakeshb@STANFORD.EDU)
Date: Wed Dec 03 2003 - 15:55:21 EST

>Rakesh wrote:
>>  There is no other reason for academic departments to subsidize its
>>  research: most economists blithely ignore the capital critiques and
>>  governments are not seeking left post-Keynesian advisors. The
>>  critique has gone from one of economic theory to a counter critique of
>>  Marxian theory.
>Three responses:
>1) Surplus approach economists, like all heterodox economists,
>have been systematically discriminated against by the hegemonic
>marginalists. We should be trying to dialogue with these economists,
>and seek out areas of agreement, rather than referring to them as
>"tools" of the capitalist class.

Why not seek out and emphasize areas of disagreement? My problem with
Marx's transformation tables is their obfuscation of the surplus in
physical terms, as a quantity of use values. The same unpaid living
labor time can be embodied in varying physical quantities of goods,
and any theory that does not pay careful attention to how physical
quantities impact the accumulation process is impoverished, given
capitalism's success in ceaselessly raising physical productivity.
Marx makes many neglected comments on the importance of use value
(and I don't mean this in Steve's sense but Grossmann's sense). The
strength of the surplus approach vis-a-vis Marxian value theory is
its recognition of the economic significance of the surplus in
physical terms. For example, while I do think Freeman and Kliman do
show, contra David L, how the value rate of profit need not track the
material rate of profit, they seem to disarticulate the two rates
such that they ignore the positive effects of a rising material rate
of profit on what they take to be economically central rate of
profit, the value one.

At the same time, the surplus approach has many weaknesses: its
static nature, its underlying comparative static methodology, its
inability to incorporate money, its unrealistic postulation of a
uniform fixed real wage, etc.

We don't need to get along; we need to sharpen differences.

>2) Surplus approach economists, and other heterodox economists,
>have shown relatively little _recent_ concern about critiquing Marx.
>Ian Steedman, for example, moved on to other topics (like
>international trade theory) _decades_ ago.

And still the name Steedman only means the critique of Marx to most people, no?

>3) Marxists have spent far more intellectual energy (to the point of
>obsession!) responding to the critiques of Marx rather than
>attempting to advance political economy.

Well I just wrote a a very long study of the origins of racism and
the nature of a new social Darwinism. But in understanding the social
context for the latter, I was drawn to Marxian theory which is
powerful and hardly panglossian. But I  had to attend to its
criticism which as we know is often logical in character.

At any rate,

Documenting the limits up against which Scandinavian social democracy
came, Moschonas (2002) underlines that the SAP (the Swedish Social
Democratic Party) itself weakened centralized collective bargaining
and "resorted--what a historical irony!--to the arsenal of
governments without any trade union base of support: price and wage
freeze, anti-strike measures, reductions in social security
expenditureŠThe SAP's return to government in 1994, amid grave
economic difficulties (large budget deficit, weak currency, rising
unemployment), led it pursue of a policy of severe austerityŠWith
triumph of market logical, and a particularly strict budgetary and
fiscal policy, the Keynesian inheritance has vanished." (191)

"Šthe pursuit of policies of deregulation and competitive rigour by
social democracy has, for the first time in its history, directly
challenged what was most dear, hallowed and enduring in its
ideological and political tradition: the socially and economically
active role of the state, and the interests of the most disadvantaged
groups in the population. In effect in its conscious and explicit
adhesion to a moderately but clearly neoliberal mode of regulation,
social democracy has made the decisive ideological leap: for the
first time so openly and systematically , it has elevated the market
and devalued the utility of the economically active
stateŠFurthermore, in the race for competitive disinflation and
rigour, the governmental left has, despite its social discourse,
departed in practice from the defence of wage-earners, and
particularly the 'poorest of the poor'. Social democracy has thus
been transformed from a political force for the moderate promotion of
equality within a socioeconomic system that is by definition
inegalitarian, into a force for the moderate promotion of inequality
in the face of forces that are even more inegalitarian . In other
words, it has been transformed from a force that has long since
renounced its anti-capitalist vocation into a force that is even
abandoning its anti-plutocratic vocation (as Vilfredo Pareto termed
it)." P. 292-93 Also: "As our brief examination of the French and
British cases has shown, the social-democratic art of laying on both
registers--deregulation and a certain re-regulation; the market and
the state--is far from having been abandoned. And there are good
economic and social reasons for that. In this sense, the new politics
of the social democratsŠ can be summarized thus: the 'economic state"
withdraws in favour of the market and the 'philanthropic' state
timidly re-emerges to reduce social costs created by the marketŠ[T]he
center of gravity in this tricky--and quasi-schizophrenic--game of
accommodating contrary logics and influences weighs clearly and
heavily in favour of liberalism. From this angle, the latest period
may legitimately be considered that of 'accommodation to 'the
preferences of capital'. In the round, the adoption of orthodox
policies and tendential decentralization of the structures of wage
bargaining have called into question four central pillars of the
social-democratic approach: the policy of wage solidarity, which
tended in the direction of the equality of wage labour, and hence
working class unity; the policy of full employment, which has been
definitively jettisoned, the policy of wealth redistribution in favor
of labour (though social democracy's impact on the distribution of
income between wages and profits was traditionally modest); and the
policy of power redistribution in favour of the wage earning class
and--above all--its trade union representation (inside  and outside
the workplace). I am therefore obliged to observe that the adoption
by contemporary social democracy of policies of neoliberal
inspiration, and the crisis of tripartite, centralized
coordination--a modus operandi largely (but not exclusively) specific
to social democracy--have impaired the politico-economic originality
of the social democratic alternative. It must equally be
observed--drawing on Rand Smith's classification--that social
democracy has passed from a 'market modifying" type of strategy to a
market adapting strategy." p.200-201. See also pp. 160-61. Weir
(1992) documents the shift in the US state from a moderate to less
moderate instrument of inequality; her focus is on the retreat from
the state's commitment to full employment policy.

>   Consequently, Marxists
>are the ones who have gone from a focus on political-economic theory
>and capitalism (e.g. Grossmann's focus) to a counter-critique of
>Steedman, Okishio, et. al.  So, I think your criticism of linear
>production theorists is better directed at Marxists!
>In solidarity, Jerry

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