[OPE-L] monetary macro interpretation

From: Jurriaan Bendien (adsl675281@TISCALI.NL)
Date: Wed Jun 07 2006 - 13:04:38 EDT

Just to add to what I suggested before, I personally think the social
ontology of capitalist markets should be viewed in terms of at least three
basic dimensions, i.e. flexible and mutually adjusting magnitudes of
labour-time, product-values and product-prices.

If the law of value holds, then, as a generalisation, capitalist society's
expenditures of  labour-time ultimately regulate (set limits upon)
product-values, and product-values ultimately regulate (set limits upon)
product-prices, even although they also react back on each other.

Marx then develops a general historical-materialist theory of the
determinism of capitalist markets in terms of cause and effect, but really -
since there might be all kinds of deviations or market imperfections - the
real quantitative relationships between the three magnitudes mentioned can
usually only be understood rationally in probabilistic terms, and not in
terms of accounting identities and accounting sums.

If we make a fetish of accounting principles, then as I suggested, we might
forget that those principles presuppose a value theory anyhow, and a value
theory is logically presupposed in ascending from real prices to ideal ones.

Insofar as we want to trace the main dynamics and effects of the production
and distribution of new value, it may be useful to suppose, as a
generalisation, that total values/surplus values and total prices/profits
are equal, but in reality there exists no 'mechanism' or ontological reason
ensuring why they should always necessarily be equal in reality. Marxists
often assume you need those identities to have a theory of price
determination at all, but I don't see why that should be the case.

The only substantive claim Marx and Engels made in this regard was that they
thought the quantitative deviations between output values and output prices
"normally would not be so great", i.e. bizarre distortions between output
values and output prices would in most cases be reduced fairly quickly
through the competitive trading process itself.

This however still disregards for example:

(1) the effects of foreign trade under capitalist conditions, which is
spurred precisely by unequal exchange,
(2) that capitalist competition also involves blocking competitors
(including protectionist regulation, monopolies etc.) and
(3) the effects of credit economy.

Consequently, large discrepancies between labour-time, product-values and
product-prices might persist for a range of products anyhow, making the law
of value only an abstract generalisation.

Interestingly, the German Marxian theorist Christian Girschner makes the
point that official economics, from Ricardo to the present day, is typically
crippled by a theory of economic exchange which Marx called "simple
exchange". And that is precisely a good reason why one ought to be concerned
with value theory at all - as soon as we attempt to understand real
capitalist trading processes, concepts based on the supposition of simple
exchange are no longer useful. As a corollary, it is characteristic of
modern economics is that it fails to explain real economic life other than
in an eclectic and ad hoc sort of way, leaving us with only an implicit
moral ideology justifying the benefits of markets, dressed up in
mathematical gymnastics. Undoubtedly many markets do have benefits, but
obviously saying this does not make an economic science.

But is there ultimately an absolute proof of a value theory? I don't think
there is, because the adoption of a value theory is ultimately based on, or
involves, moral choices. At best we can say that some value theories have
more explanatory and predictive power than others. In Charles Woolfson's
phrase, Marx and Engels offered a "labour theory of human culture", which
commits them to viewing society from the point of view of those who create
its wealth.


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