Re: [OPE-L] What is most important in Marx's theory?

From: Rakesh Bhandari (bhandari@BERKELEY.EDU)
Date: Sun Mar 11 2007 - 12:36:36 EDT

Riccardo wrote:

>production processes. The point however is that
>the 'exploitation' has to do with something
>which is absolutely peculiar with capitalism.
>Remember that we are not talking here of
>concrete labour but of abstract labour, since it
>is abstract labour which is the substance of

But how do you prove that there is exploitation under capitalism at
all? I understand that for Marx abstract labor, labor time understood
as a fraction of social labor time, is the substance of value. But I
simply don't see your point. And I don't understand in this passage
below the work the underlining of capitalist does in establishing the
fact of exploitation.

>Exactly. My point is that wage may well be a
>fair "price". The point has to do with the
>nature of the extraction of living labour in
>CAPITALIST labour processes as contested
>terrain, i.e. with the nature of CAPITALIST

I'll leave Shaikh and Gouverneur aside for now.

>I am not implying any pejorative. Fundamentalism
>does not seem to me pejorative. Just the
>affirmation that what is in the text can be
>shown to be true. Now, THE text does not exist.
>The text are many texts, and the same text is
>often contradictory. Now, when  you show this,
>the answer usually is: quotes. When quotes are
>inconsistent, then the general thrust of the
>argument according to the interpreter iks called
>to decide which interpretation is to be chosen
>(but there is no 'outside' to make this choice).

I have made an argument that the best way to make sense of Marx's
talk of double divergence is to understand to him have recognized an
inverse transformation problem. Scott Gordon and Samuelson have not
ruled out this may be the way to understand the problem, so it's been
there in the literature but for the most part ignored in the
available summaries of the debate.

>Rakesh, this is trivial. Sraffians are much more
>complex (and divided), as Marxians are. The
>criticism Ajit did in a very brief post to Fred
>some days ago I did several times to him.  As
>most Marxists he just seem to stop at chapter 2,
>btw missin g important paragraphs! Freeman and
>TSSI simply invet their own Sraffa, doing with
>Sraffa and Sraffians what they would justly see
>as inventions if done to Marx, i.e, purely and
>simple invent an author of their own
>construction. And you repeat the vulgata against
>Sraffians. I have written several times against
>Sraffians, but this requires a thorough
>knowledge of what is criticized.

The Sraffian sympathizers have had more than ten years on this list
to show that they have something important to contribute to the
completion of Marx's critique of political economy. Dobb, Meek,
Roncaglia, Steedman, Steve Keen and many others have all had ample
opportunity to show the indispensability of the Sraffian theory as
more than an immanent critique of a now discarded version of neo
classical theory. I just don't see that there is anything there.

>>>The transformation problem is an anti scientific attack dressed up as a
>>>scientific attack; the labor theory of value runs against some common
>>>appearances, and is politically dangerous. These are not scientific
>>>grounds for rejecting it, so a scientistic criticism had to be invented.
>>>That's the intellectual sociology of the transformation problem, plain and
>>>simple. That's this is what bourgeois economics has banked on is risible.
>No, I just pointed not to the usual
>transformation problem, but to a difficulty in
>some positions, here Fred's. For me the
>transformatoion problem does NOT exist. You know
>me and you should know that for me the game is
>domne in Vol. I. For me THE problems in Marx
>are: WHY the new value exhibits ONLY labour
>time? and which kind of MONEY does this entail?

Certainly not Marx's problem which was given that the new value  is
obviously only labor time how was it obtained on the assumption that
all exchanges have been at value.
I agree that the question of what kind of money is entailed is an
interesting and very important one; we can be sure that it is not the
standard commodity.

>Once the two (which in Matrx, and in me, are
>linked, are resolved, no transformation PROBLEM,
>just several transformation procedures. The
>problem in Fred, who is much, much better than
>TSSI, is just that in his simultaneous
>determination he can say that the rate of profit
>is given before prices (also in Sraffa!), just
>because he ASSUME that the MELT is given ex
>ante. But how, if the MELT is actuallly defined
>ex post, with market prices?

There are several questions here. How is the MELT defined by Marx in
the course of his theoretical investigation? How is the MELT defined
with commodity money? Should we assume that the exchange value of
gold allows no more than the average rate of profit to the gold
sector; if so, then how is absolute rent paid, as Michele Naples
asked  long ago; if money is simply fiat money, then how is the MELT
defined? But these questions have nothing to do with the standard
commodity, and they do not prove that the value of gold can be
ascertained through the static formalism of simultaneous equations.

>Then, you must
>believe in gravitation, but that is not enough.
>If one sticks to Marx, he actually has the MELT
>given ex ante but, first because he has
>COMMODITY money, second because its value is
>fixed by BARTER at the points of inflow, so that
>expected money prices are already labour time
>equivalents before final exchange.


>Then the
>question: do we have to believe in commodity
>money, and in this peculiar way of determining
>the 'value of money'. Then Fred at a certain
>point said no, and developed for todays
>capitalism the insight of Max about the MELT
>with Fiat state money. But this is done in a
>situation in which money is NOT fully

Right but as I pointed out Fred has not provided a theory of the
determinants of the quantity of money in circulation.

>I repeat: fully. At this point, I
>hve not very much to discuss with Fred because
>we are talking about different theoretical
>objects. For me capitalism is a monetary economy
>with money as capital first and foremost
>represented by bank finance fully endogenous.
>This happens because I am not committed to
>develop Marxian theory along internal lines: I
>am interested in developing Marxian theory
>taking into account political economy after
>Marx. And the political economy after Marx teach
>us that money is endogenous, just as Ricardo
>taught that labour 'contained' was better than
>labour 'commanded' as a theory if prices.

The idea endogeneity of money is only a continuation of Marx's
critique of the quantity theory of money. I do not see the great
breakthrough here, perhaps you could explain.

>Btw, your reference to the sociology of the
>transformation problem implies that there is a
>truth that those bastards of economic professors
>had to build their career simply inventing
>problems. Are you joking?

I don't understand your point. The important figure is not really
Sraffa anyway but Samuelson who used Sraffa's theory of value to beat
down the Marxists and assert the respectability of his liberal
Keynesianism with which humane technocrats would look over and guide
the capitalists towards the goal of full employment. The Keynesian
vision is as stale as the tempest in the teacup in the Cambridges
forty years ago. It's just not interesting or important; it's time to
let it go.  It may not have much of a life anywhere other than this

The focus on labor time, the distribution of the gains from rising
labor productivity, the reorganization of the labor process on a
global scale to maintain profitability, the rising speed of the
circulation of capital, the dynamic effects of declining unit values,
the overaccumulation of capital and its effects on international
peace--these are interesting questions to many people looking at the
modern world. Marx's resurgence is announced all the time to non
academic audiences. This is not true of Bortkiewicz and Sraffa.

>Freeman presented a
>paper with this thesis in London a couple of
>years ago, saying that Bortkiewics, Sweezy and
>Sraffa invented the problem for academic

Sraffa certainly wanted distance from what he wrongly took to be the
rigid aspects of Marx's wage theory and gave us the illusion that the
wage is paid out of this year's net product. But of course that may
not be what he is saying because after all the person looking for
gnomic power said very little about what he was describing.
Bortkiewicz certainly wanted to put Marx in his place. Sweezy
disavowed the attack on the labor theory of value that he opened the
door for.

>This seems to know nothing of
>their life, and of their work too.

Sraffa was a Stalinist  and don, and allowed Gramsci to read a lot of
books but then saw profit in Japan after Hiroshima.   Bortkiewicz was
a pioneering theorist of statistics. What's the point?

>Whereas most
>of today's defenders of LTV are academic
>professors. I very much prefer a discussion
>about different arguments, with NOBODY
>pretending to have the FINAL word with the TRUE
>interpretation just to be TESTED to see if that
>theory is also RIGHT. Btw, this has been
>destroyed by XXth century epistemology.

Yes we live in a world of judgements as Jeremy Ravetz has eloquently
argued. We can still judge better or worse, fruitful or unfruitful in
the sense of theorizing a dynamic system rather than getting the ear
of Solow or Samuleson.

>>>Marx towers above these putatively most excellent findings of 20th century
>>>economic science.
>Marx towers because his PROBLEMS were much ahead
>of economic theory, including Marxists's. He had
>the two problems I said (grounding of new value
>referring to living labour,

This misreads Marx in my judgement.

>  essentiality of
>money in the value dimension).

Yes this is a problem.

>These problems
>are NOT understood by today's orthodox. So Marx
>towers over Marxists. No surprise he didn't
>succeeded fully. Research is a succession of
>errors, in which the new generation should build
>on the knowledge also of the limits of the
>inherited theory.
>>>And for goodness sake what unfinished business is accomplished by Sraffa's
>>>exercise in counting equations and unknowns, treatment of the wage as if
>>>it were a part of this year's net product (this any Marxist should know is
>>>simply wrong), inherently static and money-less formalism which can have
>>>nothing to teach us about tendencies, profits or anything in the actual
>>>capitalist world?
>Where did *I* said about this? Sraffa knew very
>well Marx, for a guy trained in the 20s-40s.

There were people who knew very much better their Marx outside of the
Anglo Italian orbit of Sraffa, Dobb and Meek.

>  But
>his problem was RICARDIAN, and he knew that. The
>fact that you speak of *static* about Sraffa,
>however, jmust says all about your
>oincomprehension of Sraffa's basics.

Sraffa thrived on incomprehension of what he was doing.  An immanent
critique, an actual theory of manifested long term exchange ratios?

>>>If you could lay out for Fred and the rest of us, what new developments in
>>>modern economics we should all be so impressed by, that would be great.
>Rakesh, I said this several times, and I repeat.
>ALL that I know about these things I have
>written ikn my works. Are you interested? Read
>my publications. It is difficult to me to write
>in English, and for sure I am NOT a fanatic
>email-list contributor. Take these interventions
>of mine as just an incursion, which is punctual
>and rare.
>>>Keynes, game theory, Sraffa, Schumpeter--does Marx really have something
>>>to learn from economists? I think not.
>Marx, you are right. He is dead. We, definitely.
>Remember, Marx learned even from vulgar

Really? What was it that he learned?

>>>Of course the story is different
>>>once we consider anthropology, history (especially of Asia and black
>>>slavery), sociological studies of institutions, and feminism.
>Granted. Also philosophy, psychoanalisis. And
>economics. Wicksell, Keynes, Schumpeter, Minsky,
>postkeynesians, but also Stiglits and
>neokeynesians. Even Arrow and Debreu, if one
>wants really criticize general equilibrium
>theory. WE should learn from political economy
>and vulgar economy OF OUR DAYS. For example, if
>we wants really to understand the novelties in
>economic policy.
>>>I understand that you think Marxists need Keynes' and Schumpeter's
>>>theories of credit money, so perhaps we should focus on that rather than
>>>these very tired criticisms of Marx's theory of value.
>No, I don't repeat the usual criticism. That can
>be said by somebody who sees in ANY  criticism
>about the LTV the tranformation  problem. S/HE
>is OBSESSED by these tired criticism (which,
>btw, was NOT shared by Sraffa). I put forward
>OTHER more fundamental criticisms. And Keynes
>and Schumpeter are relevant exactly for THIS.
>Value AND money. They are important for the
>money side. But they lack value: so they must be
>CRITICIZED by Marxians. As Marx did with Ricardo.

Right but the Sraffian framework as underlined by Paul Davidson will
not allow you to undertake these important investigations. You just
can't have everything. Schumpeter and Sraffa and Marx, and be open to
everything. Choices have to be made.


>But I repeat, my post was just repeating what is is in my writings.
>You know what. I realize that most people quote
>without actually reading. So, Kliman, but also
>Diego, quoted a prase from a 1996 paper whoich
>is NOT in the published version. And why is not
>there. Because discussing with TSSI people I
>realized it was understood in the way that makes
>people believe I support the usual criticism
>about the transformation problem. My problem is
>DIFFERENT, and my way out is DIFFERENT. But of
>course, it would mean a change of perspective.
>Stop to be obsessed by the tranformation, and be
>freed from the dream that showing that there is
>no inconsistency in Marx's procedures, all the
>rest is OK. Nice sociological, and
>psychological, situation, isn't it?

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