Re: [OPE-L] Say's Law

From: Rakesh Bhandari (bhandari@BERKELEY.EDU)
Date: Fri Nov 04 2005 - 13:05:48 EST

On Fri, 4 Nov 2005 11:35:49 -0500
  Fred Moseley <fmoseley@MTHOLYOKE.EDU> wrote:
> On Tue, 25 Oct 2005, Rakesh Bhandari wrote:
>> Yes but what begins as an assumption
>> comes to be considered for all practical purposes an attribute
>> of reality unless one shows herself why the assumption is untenable
>> In your present reading of Marx he seems to have never got
>> around to relaxing the S=D assumption in his reconstruction
>> of the concrete, for his principal aim was
>> the explanation of the source and forms of surplus value, and
>> that exposition required the strict assumption of S equaling D.
>>  Marx is thus made *de facto* a prisoner of
>> Say's Law, and the Keynesians will all be too happy
>> to lump Marx in with the rest of the classical economists.
>> But as Andrew T rightly suggested, Marx did attempt to show the
>> barriers to S equalling D in the reproduction schema, and Marx's
>> assumption of supply creating its own demand was necessary to show
>> that even on this assumption, a shortage of surplus value would
>> obtain that would then manifest itself as an excess of commodities
>> on the market. This then led him to consider how accumulation
>> could at times more or less solve the realization problem and how
>> at other times it would not. That is, Marx did not believe that
>> capitalism was haunted by a permanent underconsumption crisis.
>> Its periodicity had to be explained.
>> Marx's principal aim was thus not the explanation of surplus
>> value as such and its mediated forms but the laying bare
>> of the economic laws of motion of capital, i.e. the tendency
>> towards crisis and catastrophe. He was not a static thinker
>> a la equilibrium economics but a dynamic thinker of positive
>> feedback and dialectical change. Even Raymond Boudon
>> would agree with that, I think!
>> As I suggested, you seem to have moved away from Mattick's
>> interpretation of the aims and argument of
>> Marx's magnum opus in your own recent interpretative work. Is that a
>> fair characterization?
>> I am worried about this because I thought you were the only
>> major economist who followed Mattick.
> Rakesh, I do not think the question is either/or
> (either production-distribution of surplus-value OR crises), nor even a
> matter of priorities (which is more important), but rather a matter of
> which comes first in a theory based on the method of levels of
> abstraction.

Yes, I agree with you as you know from this post I sent in your support
against Jim Devine on pen-l in January 2002:

>Fred was obviously not abstracting one aspect--difficulties
> in the *production* of surplus value--to exclusion of the others.
> He suggested that difficulties in production could then compound
> problems in the *realization* of surplus value.
> Jim's call for holisim implied too exclusive an abstraction by so
> called orthodox marxists of only one part of the concrete capitalist
> totality (the production part), but Fred was not failing to return to
> problems in the realization of surplus value. He said, as someone who
> understands Marx profoundly, that the real difficulties in the
> realization of surplus value could be best understood after the
> difficulties in production were first grasped.
> That is, Fred and Marxists argue that in order to understand capital
> one must first abstract production, not begin with the relations of
> exchange as bourgeois economists do. Then one can abstract from the
> capitalist totality the process of the realization of surplus value.
> It's a matter of ordering, not a matter of excluding.
> If one just calls for holism, then one cannot advance in the
> theoretical understanding of the concrete capitaist totality because
> you take all elements as jumbled together as they already are. That
> is the problem with holism that seems to be much vaunted on this list.
>   Abstraction of parts and aspects has to be made for intensive
> analysis. Fred proceeds in a Marxian way, Jim D does not. Again this
> is not to personalize the argument but to clarify the theoretical
> differences so that we can have a theoretical, rather than a
> personal, debate.

OK, then, you Fred further argue today:

  I certainly agree, as I have said in recent posts, that
> Marx showed in Capital that "Say's law is absurd" and that the
> equilibrium conditions of reproduction are satisfied "only by chance",
> etc.  I also agree with you that his theory of the falling rate of profit
> is based on the assumption that S = D and yet shows how a shortage of
> surplus-value and a realization problem results.  However, his theory of
> the production and distribution of surplus-value assumes no realization
> problem.
> I do not think I have "moved away from Mattick" at all.  As I have said,
> I learned from Mattick the crucial methodological assumption of the
> determination of the total surplus-value prior to its distribution.

On this issue I think Chris A and I are arguing against you about the
reality of universals,  capital's perverse tendency to conform to
Hegel's ontology. If I gave an average height for a population, there
is no such thing as the population in general and the average height.
But capital thingifies such abstractions: capital in general and
the average rate of profit are real things.
You seem to be holding  on to the third of my four definitions
of capital in general. I agree with Chris about my fourth def.

> But I agree that my emphasis at the present time is somewhat different from
> Mattick's.  Right now, I am emphasizing more Marx's theory of the
> distribution of surplus-value in Volume 3, and especially the
> "transformation problem", partly because the recent publication of the
> entire Manuscript of 1861-63 has made possible a better understanding of
> Marx's theory of the distribution of surplus-value in Volume 3.  I think I
> have something new to offer on these issues.  But this does not mean that
> I disagree with Mattick's emphasis on the falling rate of profit and crises
> and the "limits of the mixed economy', etc., nor do I think that these
> subjects are any less important.  I don't consider myself a "major
> economist", but I definitely consider myself a follower of Mattick.

Comradely Rakesh

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