Re: [OPE-L] Michio Morishima, 1923-2004

From: Rakesh Bhandari (bhandari@BERKELEY.EDU)
Date: Sun Mar 27 2005 - 12:52:41 EST

>----- Original Message -----
>From: "Stephen Keen" <>
>To: <>
>Sent: Sunday, March 27, 2005 6:04 AM
>Subject: RE: [OPE-L] Michio Morishima, 1923-2004
>Interesting post Jerry!
>Keep me in the loop on this one. For my part, I wasn't particularly
>influenced by Morishima--I think he took a wrong tack in trying to express
>Marx in marginalist terms because Marx's theory of value was fundamentally
>objective whereas the neoclassicals have a subjectivist theory of value.
>My interest is in providing a proper expression of an objective and
>dialectical theory of value--and as you know I regard the labor theory of
>value as flawed in that light.

This of course implies that Steve's conception of use value is not
subjectivist in the sense of the neo classical utility; after all, he
believes that machines are objectively useful in the creation of
surplus. So his conception of use value seems more in line with the
classicals', though I don't remember whether he spells out himself
that use value has radically different meanings in classical and neo
classical thought. For example for Smith diamonds are said not to
have use value not because they fail to bring satisfaction but
because they have no objective or practical use.

>Of the latter group of scholars you mention, the one I do give great
>credence to is Arun Bose. His "Marx on inequality and exploitation" is a
>classic--and, as it happens, so is the critique he has in there of the
>labor theory of value.

I think that Steve is referring to his idea that Marx failed to
extend  the application of his objectivist dialectic of value and use
value from labor power to machines as well.

Of course Steve fails to apply that same dialectic to the output. For
while machines of higher  quality may of course increase the quantity
of output in use value terms, it will not necessarily increase the
value of that same surplus.

Grossmann did not make this mistake, but Steve takes his
understanding of use value from Rosdolsky who was only summarizing

Jerry wrote:

>While Morishima didn't originate these theories, I think he also has to be
>given credit ... or blame ... for perpetuating and popularizing *dualism*
>and *simultaneism* in Marxian theory.

Morishima also influenced people to understand Marx's reproduction
schema as a proto growth model a la van Neumann and Harrod Domar.

But while it is true that the reproduction schema show the
possibility of accumulation, it is important not to overstate their
significance. Desai (1979) argues at one point that Marx's
reproduction schema demonstrate the possibility of capitalism as an
instrinsically stable dynamical system.  That is, Marx's reproduction
schema are received just as some of Newton's interpreters understood
his system to have demonstrated the dynamic stability of the cosmic
system and thus its rational intelligibility (according to Toumlin
[2001] the driving ambition of economics was to demonstrate that the
economy had the same dynamic stability that many thought the cosmic
system had).  Since Rudolf Hilferding, Marxists have incorrectly
understood Marx to have constructed in the last section of Capital,
volume II a proof of the possibility of the dynamic equilibrium of an
expanding capitalism; the law of value is then misundersood as the
mechanism by which an anarchic, turbulent capitalism is returned to
dynamic equilibrium.  Yet  this is to understand capitalism as an
inherently stable system whose structure guarantees its permanence
unless of course the Creator chooses to close it down or the
revolutionary proletariat serves as just such a deus ex machina. But
in fact Marx's reproduction schema do not show even the possibility
of capitalism as an intrinsically stable dynamical system..How could
they? They assume a constant OCC (organic composition of capital),
fixed values, annual turnover, exchange at value (rather than price
of production). They are too far removed from the reality of an
actual capitalist system to lay bare its  laws of motion (see
Grossmann, 1932 and Mattick 1976). However, even from this distance
to reality, the schema already do show that supply does not itself
create its own demand (so Marx remains throughout a critic of Say's
Law); accumulation--not supply--creates demand: demand is not created
to put to use what has been or can be supplied. Accumulation and thus
demand are a function of anticipated profitability and competitive
burdens. Accumulation does not take place to solve the realization
problem; there is no intended link between accumulation taking place
and the realization problem getting more or less solved (see Desai,
Marxian Economics, p. 180-81).
More importantly,  it is doubtful--and this is in fact what Marx is
trying to demonstrate--that demand will be created in the correct
value and material proportions to sop up growing supply, so if
capitalism does reproduce itself on an expanding scale it will likely
do so with all kinds of disturbances and disproportionalities and
crises (see Grossmann, 1941). We can already see this on the basis of
Marx's totally unrealistic reproduction schema which were not meant
to suggest in any way that capitalism is possibly an intrinsically
stable dynamical system.  All this said, Marx does not in fact locate
capitalism's most important and explosive contradiction in the
imbalances between the demand which accumulation creates and growing
supply; the fundamental contradiction (and the explanatorily
fundamental one for protracted and general crises) is in the
production of a diminishing flow of surplus value relative to the
capital advanced. As the reproduction schemas assume a constant OCC,
they cannot show this. In this sense Otto Bauer's schema into which
was built a rising OCC were more realistic; they relaxed an important
assumption, though they maintained the totally unrealistic assumption
of fixed unit values in the course of accumulation (see discussion in
Grossmann, 1970).  Marx's own system does not become fully dynamic
until the third volume of Capital.

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