Re: [OPE-L] SV: [OPE-L] what is irrational in the functioning of capitalism?

From: Rakesh Bhandari (bhandari@BERKELEY.EDU)
Date: Mon Dec 04 2006 - 18:56:25 EST

> Hi Rakesh
> I have responded to Ajit because it is normally more  productive to
discuss ideas with someone who disagrees with you.

Yes I have enjoyed reading your exchanges with others, including Ajit,
though one wonders whether on all sides there has been any change in
initial positions?

I still think that we should not dismiss Marx's idea that as unit values
fall there will be contradictions and crises caused by a falling profit
rate. Capitalism will not race to a near automated economy, leaving behind
only a social control problem of the mass unemployed.

But putting that aside and putting aside the difficult questions about
joint production, choice of technique and the transformation, I was trying
to speak to the charge that the labor theory of value is metaphysical in
comparison to a given "technical conditions" approach. But technical
conditions are themselves the objectification of labor, and if they are
changing interperiodically there is in fact nothing material there with
which to determine prices and profits. For this reason, In any analysis of
the dynamics of accumulation, the technical conditions approach is less
materialist, more based on an ideal construct than the theory of value
I am not saying that we cannot fix the technical conditions of production
for an analysis of interdepartmental exchange in the cases of simple and
expanded production. But this is an analysis of the conditions of
exchange (and realization of surplus value)in any actually reproducing
economy (also will the elements of production continue to be available).
Marx's Capital II models are not about the determination of prices and
profits in a dynamic setting. In terms of that problem there are no fixed
technical conditions of production except through an ideal construct;
there is no empirical data about fixed technical conditions because they
don't actually exist. There are no fixed technical conditions in terms of
which one can provide a materialist grounding for a theory of prices and
But the expenditure of social labor time is real and material.

The labor theory of value provides a more solid materialist grounding.
It's not meta-physical. It's in fact more physical and materialist than
the appeal to fixed technical conditions of production which is in fact
nothing more than a mental abstraction. It's not labor value that is a
mental abstraction as Sombart charged in another context.

So I am challenging the Sraffian image of being less metaphysical, more
materialist than the Marxian value theory.

That was my point; do you agree? Is the labor theory of value metaphysical
while the technical conditions of production approach is hard headed and

This is the charge that Steedman tried to imprint on the mind. Is it true?

If you don't accept my retort to the charge that LTV is metaphysical at
least in comparison to the technical conditions approach, how would you
meet the criticism?


Hence less messages
> on your posts.
>>I think we may be the only two people on this list who worry that the
Sraffian view may depend on metaphysics-the false attribution of
timelessly physical or material existence to evanescent
>>technical conditions of production. For only if they are fixed
>>against time is there anything physical or material in terms of which to
have prices and profits determined. The theory presents itself as hard
headed, more materialist than thou and empiricist; but its basic data
dissolve in one's hands in the course of dynamic analysis. There is
nothing there but a detour into Platonic realm of ideal technical
conditions of production, frozen against the passage of time.
> I think it's important to abstract and even freeze in order to analyse
special-cases. So I have no problem in principle with formal models. On
the contrary, I think they are essential. But always incomplete.
Introducing change I think is essential to understand the theory of
> Best,
> -Ian.

This archive was generated by hypermail 2.1.5 : Sun Dec 31 2006 - 00:00:04 EST