[OPE-L] Dynamic model?

From: Jurriaan Bendien (adsl675281@TISCALI.NL)
Date: Sat Mar 10 2007 - 18:00:53 EST

What intrigues me is Ian Wright's and Anders Ekeland's references to
"dynamic modelling" of the relationship between prices, values and
labour-time worked.

What would the dynamic model prove, exactly?

If I read Ian correctly, the model would prove that, under the assumption of
specified "purely capitalist conditions", a robust quantitative relationship
exists such that not only will (i) market prices of products trend towards
profit-equalising prices of production for those products, but also that
(ii) those prices of production themselves are regulated, as Marx says, by
current product-values which are (iii) constrained by, but not identical to,
quantities of labour-time worked to produce those products (note 1: this is
a different operation from the transformation of direct prices into prices
of production; note 2: current product-values refer to current quantities of
SNLT and not historical quantities of SNLT).

The proof would take the form that, if the qualitative and quantitative
assumptions of the model are accepted, then this logically entails the
stated quantitative relationship.

I think such a quantitative description is in principle possible to devise -
for simplicity we need not even refer necessarily to values, but just talk
only of prices and labour-hours - but even so the list of variables and
relationships necessary to specify the purely capitalist conditions
realistically is large. It exceeds by far anything we could empirically
verify from available social statistics.

Wouldn't it be simpler to study the real history of capitalism using the
human brain as processor?

The suggestion seems to be that the mentioned quantitative proof would make
the theory more rigorous. But what if the pure model is only weakly
reflected in verifiable reality? In that case, we would, in addition to the
large number of variables we already have in the pure model, have to
introduce all kinds of new qualifications to better approximate reality.

But isn't it a scientific norm that the simplest theory with the greatest
explanatory power is the best theory?

The Arrow-Debreu type model states roughly that a set of prices can always
be found at which supply and demand will balance, for all traded goods in
the economy, if we define competition, demand and prices in a certain way.
The objection to that model is that its assumptions are insufficiently
realistic, and imply a near-tautology such that if all obstacles to trade
are removed, one will be able to trade all goods. But a similar type of
objection could be made against the suggested Marxian model of pure
capitalism based on a general rate of profit.

In Kozo Uno's view, it was sufficient to state the principles of political
economy for pure capitalism, and develop more specific theories at lower
levels of abstraction. The objection against this approach is that it is
unclear how the pure theory abstracted from history is to be concretised
consistently, and that Uno's pure capitalism is strangely a capitalism
without any consumption or a political state. It is more a Weberian ideal
type (Uno studied with Weber).

What is preferable, a Weberian ideal type such as Marxists in reality use
despite their odes to "dialectics" and suchlike, or a computational model
based on counterfactual (oversimplified) assumptions? What kind of theory is
really fruitful, and how is it best formed?


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