[OPE-L] Non equilibrium (was Kliman and Wikipedia)

From: Jurriaan Bendien (adsl675281@TISCALI.NL)
Date: Tue Apr 17 2007 - 12:39:24 EDT

A lot of what Kliman does, is branding. He has the franchise for the TSSI
brand, and then he tries to get endorsements for that brand. But the dispute
about equilibrium versus non-equilibrium economics is confused in nthe

Formally, equilibrium economics states the thesis that unimpeded markets
will always tend toward a supply-demand balance, or what amounts to the
same, that there exists a set of prices at which all markets will clear. But
substantively what the argument is  really about, is that if there is a free
market then supply and demand will adjust to each other. The formal argument
cannot be proved absolutely, but with the latter argument Marx never
actually disagreed. Marx knew very well that supply and demand adjust to
each other, they will do that even if there is no market at all,
and he refers freely to "equilibrating" forces. The real dispute
is about which kinds of trade are beneficial, and which are not, and what
adjustments are acceptable, and which are not. That is the critique of
political economy.

"Can one develop through the analysis of the logical construct of simple
reproduction an explanation of why capitalist dynamics will likely be
characterized by constant non equilibrium, with equilibrium which is the
rule presupposed by political economy only at best a momentary transitory
point?" (Rakesh)

I think the answer to that question is no, for exactly the same reason that
supply-demand curves prove very little. It all depends on what numbers you
feed into the equations and what assumptions you make. There exists no
logical proof that capitalism must always tend towards equilibrium, or
towards disequilibrium. There exists only the empirical evidence of a
succession of booms and slumps. Metaphysicians want to deduce logically
from first principles that capitalism must break down, or spontaneously
balance itself, but scientific people want to explain the observables.

What Henryk Grossmann really argues, is that Marx does use the hypothesis of

"He assumes a state of equilibrium with respect to supply and demand, both
on the commodity market and on the labour market, in order to be able to
cover the more complicated cases later.


"This identity of price and value is in turn only possible if the apparatus
of production is assumed to be in a state of equilibrium."

Here Grosmann obviously goes wrong. Marx makes no particular assumption
about equilibrium, he assumes only that products will be bought and that
they will sell, and - at least initially - that prices and values are the
same. The fact that products will be bought and sold, and that they will
sell at prices which reflect their real value, does not automatically imply
supply-demand equilibrium at all. That would be very sloppy thinking.

Long ago Roman Rosdolsky and Ernest Mandel explained clearly why the
reproduction schemes cannot be the basis for a theory of crises. Why
people are still trying to base the theory of crises on the reproduction
schemes is rather puzzling to me. I suppose that some people have a
sentimental attachment to certain Marxist theorists.


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