Re: Carchedi's TSS approach

From: Rakesh Bhandari (rakeshb@STANFORD.EDU)
Date: Wed Mar 10 2004 - 11:27:33 EST

>At 13.52 06/03/2004 -0800, you wrote:
>>>At 23.55 19/02/2004 -0800, you wrote:
>>>>"I do not agree with either the orthodox theory or
>>>>Screpanti's, but that is irrelevant.  It is the charge
>>>>of incoherence that -I would guess-  would attract the
>>>>'Damned Lies' bit."
>>>>Oh! I had not seen this one and I'm not sure who wrote
>>>>this. It could well be a good joke. Coherence is the
>>>>last thing one can find in the TSS approach to Marx or
>>>>for that matter anything. It is laughable that the
>>>>author of the above quote thinks that such a mild
>>>>criticism of an approach deserves to be called "dammed
>>>>lies". I think the TSS is not only incoherent but
>>>>simply nonsensical! ajit sinha
>>>My charge against Charchedi's TSS approach was twofold:
>>>Inconsistency: he uses Marx's reproduction conditions but then determines
>>>prices without respecting these conditions;
>>Ernesto, I don't understand the criticism. Marx analyzes simple and
>>expanded reproduction without ever determining prices that respected
>>those conditions: the schema are given in fixed values. The schema
>>are only a preliminary and provisional analysis of the difficulties
>>in the circulation of the capital. Why should a price theory have to
>>hold in conditions of simple reproduction (Bortkiewicz) or even
>>equilibrium (Winternitz)?
>A theory of market prices need not require these conditions to hold. A
>theory of production prices does.

If one assumes by definition that production prices are long term
equilibrium prices. I don't assume that. I have quoted evidence from
Ricardo where he did not believe that. To say that there is a
tendency for the rate of profit to equalize across sectors over time
is not to say that there is a tendency for the economy to settle into
a state in which input prices and output prices are  identical.  Said
assumption is also not logically required to distinguish production
prices from market prices or prevent Marxian theory from collapsing
into institutional economics.

>  On the other hand, Carchedi assumes that
>the structure of demand is such that no realization problems exist and  the
>rate of profit is uniform.

Production prices are what prices would have been in any one period
had D=S and the rate of profit equalized across sectors.

>  This implies that the system is in reproduction

No the above stipulations (D=S and rate of profit inter sectorally
equalized) do not in themselves imply that the system is in or
converging towards reproduction equilibrium, i.e. input prices equal
output prices.

>Then Carchedi "transforms" his "values" into his "prices" in
>such a way that this condition does not hold.

No the conditions of D=S and intersectoral equalization of rate of
profit are assumed to hold in that one time subscripted period in
Carchedi's determination of production prices.

Ernesto, I don't think you are addressing TSS reasons for claiming
that the bourgeois notions of prices as long term equilibrium, center
of gravity points has been conflated with Marx's idea of price of
production which need not have said equilibrium property to be
distinguishable from market price.

The point is that in doing an immanent critique of GET, Sraffa
accepted the notion of equilibrium price. But there is no reason to
strangle Marx's dynamic theory with that notion or with the related
methodology of comparative statics.

>>>dogmatism: Marx (as he interprets him) is always right.
>>Again there are indeed those of us who think Marx was more incomplete
>>than incorrect.
>"More" means that you believe he is at least a little incorrect? In what?

Well there are outstanding questions. Marx does seem to be arguing
that money has to be a commodity if it is to serve as a measure of
value. Perhaps Greenspan does not run a  gold standard but rather
attempts to keep the value of the dollar stable in terms of a basket
of commodities (a possibility I don't think Claus Germer has
considered in his very stimulating written work). That would seem to
save Marx's commodity theory of money but it does not seem to be what
Greenspan is in fact doing.

Yours, Rakesh

>>There is nothing inherently dogmatic about this
>Of course.
>>especially since Marx developed his theory through a careful
>>and detailed critique of the theorists who preceded him.
>>Yours, Rakesh
>>ps didn't Carchedi write a price with Werner de Haan about the
>>replacement of fixed capital in conditions of simple reproduction?

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