Re: [OPE-L] [On Fred's and your posts

From: Howard Engelskirchen (howarde@TWCNY.RR.COM)
Date: Sun Jul 22 2007 - 09:38:55 EDT

Hi Fred and Claus,

I apologize to Fred for not having been able to respond promptly to his
posts of last week and to the questions he posed to me in them, and do so
particularly because he tells us in the email below he'll be out of touch
for a time.  Partly his exchange with Claus clarified and provoked my own
understanding.  In this post I'll respond to Fred's questions.  In another
post, I hope today, I'll comment on Claus's points.

In his post of a week ago today Fred asked if there were differences between
the way in which he presented the "empirical explanatory power" of SNLT as
the substance of value and my own views.  He said empirical explanatory
power meant "explanation of the necessity of money and the value of money,
explanation of profit and the magnitude of profit, explanation of conflicts
between capitalist and workers over wages, and the working day, and the
intensity of labor, explanation of inherent technological change, the trend
in the rate of profit, periodic crises, etc."

I do find important differences in our points of view.  Also, in his post to
me of the day before, July 14, Fred argued that "NO OTHER ECONOMIC THEORY
provides a logical proof of his [its] basic assumptions," and added that the
plausibility of the labor theory of value did not depend on a logical proof,
"because it depends on this [a materialist] point of view."  Neoclassical
theory depends on a "subjective point of view."  Fred concludes:  "The
choice between these two theories cannot be made on the basis of purely
logical arguments, but should be based primarily on the RELATIVE explanatory
power of the two theories."  I copy both Fred's posts in full below.

Fred, first, explanatory power is part of it, but the Ptolemean theory had
plenty of explanatory power.  Let's assume that in the early stages of the
Copernican theory the Ptolemean theory was actually more powerful in  its
explanations.  That did not make it right.  The choice between Copernicus
and Ptolemeus never turned on which set of assumptions had greater
explanatory power.  We are not testing competing points of view to find out
which explains more.  Robust assumptions about the work of a deity in our
lives no doubt explains a good deal more than SNLT, but it is not the scope
of explanation alone that confirms a theory.

I hasten to add that a theory that does not explain is of no value to

But what I'm arguing, Fred, is that something has got left out -- exactly
the thing I insisted on with Paul:  the question is the degree to which our
theories actually give us access (approximately, fallibly, revisably) to the
causal structures of nature and social life.

On that score, I don't think SNLT is the causal ground, and you can be sure
you have not adequately specified the causal ground of explanation when you
end, as you do, with an "etc."   We don't identify the causal structure of
water as some hydrogen, more oxygen and etc.

We have to distinguish between those structures we investigate that are
*constitutive* and those additional properties or structures that are
consequent, that are manifestations, that we attribute to the underlying
structure.  The constitutive structure of the value relation is specified in
the passage you quote from the Kugelman letter.  First, as a general matter,
for any form of society, social reproduction requires some causally potent
structure that accomplishes the distribution of labor to need.  Second --
and let me turn around Marx's actual statement in the Kugelmann letter to
make clear the distinction between what is constitutive and what is
manifestation --  wherever the causal structure of independent producers
producing use values useless to themselves exists, then the form for the
distribution of labor will be to some extent characterized by the value
form.  I disagree that profit is necessary to understand this, or the rate
of profit, or conflict over the working day, or intensity of labor, etc.
Those things ARE necessary to understand why every product of labor takes
the commodity form, but that is a different question and depends on a causal
structure that is different in kind.  It presupposes the causal structure of
commodity producing labor, but it is nonetheless a different causal
structure of labor.

I'll say a bit more about this in a separate post to Claus and will address
the question you ask there of the extent to which "simple commodity
production" remains valid for capitalist society.

I agree, Fred, that we always test particular theories against alternatives.
I disagree that we begin with assumptions that are confirmed by means of
explanatory power alone.  What gets left out of that model is the decisive
thing -- what are the causal structures of social life actually operating?
We have to specify those.  Contemporary science takes it to be the business
of science to identify and explain the causal structures of the world.
Marx's social theory is not different.  He took great care to do so.



Fred's "equality versus equivalence" from 7/15/07:

Howard, again I think we may substantially agree.

When I talk about the "empirical explanatory power of Marx's theory", I
don't mean a good fit between labor-times and prices.  I disagree with
Paul on this point.  Theoretically, I don't think that Marx's theory
predicts that prices in capitalism will be proportional to labor-times,
because of the equalization of the rate of profit.

When I say "empirical explanatory power", I mean:
explanation of the necessity of money and the value of money
explanation of profit and the magnitude of profit
explanation of conflicts between capitalist and workers
over wages, and the working day, and the intensity of labor
         explanation of inherent technological change,            the
trend in the rate of profit, periodic crises, etc.
All these important phenomena in capitalism are explained as the
*necessary consequences* of SNLT as the substance of value.

The explanatory power of Marx's theory on all these important phenomena
in capitalism is much greater than any other theory of value -
including especially the neoclassical supply and demand theory of
value, which can explain none of the above important phenomena.

As you put it, Marx's theory provides an "explanatory structure" (SNLT
as the substance of value) that is "capable of accounting for the
empirical phenomena being investigated" (e.g. the phenomena listed

Do you see any differences between what you are saying and what I am saying?

Thanks for your clarification.



Fred's "equality versus equivalence" from 7/14/07:

Quoting Howard Engelskirchen <howarde@TWCNY.RR.COM>:

> Hi Fred and Paul,
> Paul, you mentioned in an earlier post that Marx's choice of labor
> objectified labor) as a scalar was an assertion and was not logically
> proved.  And Fred you responded (to Andy and Paul, I think) by saying that
> Marx's argument did not constitute a logical proof, but rested instead on
> its empirical explanatory adequacy.  I read your arguments in this post on
> the strength of Marx's argument, but first I want to understand what it is
> you have in mind by insisting that Marx has not offered a logical proof.
> Equally (or is it equivalently?), Paul, I want to understand what you mean
> that Marx's argument about labor is only an assertion.
> Neither of you may intend this, but the argument always seems inevitably
> sound as if this were somehow a failing of Marx's argument:  that he
> have offered a logical proof, but failed to do so.
> For example, Paul, is bare assertion the only alternative available to
> logical proof in science?
> And Fred, does anyone offer logical proofs of such things?  Induction, of
> course, doesn't prove.  And deduction proves what is already implicit in
> premises.  So why do we say that Marx has not logically proved?   Can you
> offer an example of a generalization in the natural or social sciences
> *is* the result of logical proof?
> Thanks; I've enjoyed the exchange.
> Howard

Hi Howard, thanks for your comments.

I agree completely with what you say, and this has been one of my main
points (sorry if I was not clear about this).  Marx has been
criticized, from Bohm-Bawerk on, for having "failed to provide a
logical proof of the labor theory of value in Section 1".  (Indeed, the
reviewer in the Centralblatt made the same criticism in 1868, and Marx
replied that this comment reveals "complete ignorance both of the
subject dealt with and of scientific method.")

But NO OTHER ECONOMIC THEORY provides a logical proof of his basic
assumptions.  The bar is always set so much higher for Marx's theory
than for other theories.  Theory appraisal should always be
COMPARATIVE, so that one could not get away with these debating tricks.

I think that Marx provides a strong argument for the plausibility of
the labor theory of value, from his objective (or materialist) point of
view; but it is not a logical proof, because it depends on this point
of view.  Similarly, arguments for the plausibility of the utility
theory of value are not logical proofs, but depend on the neoclassical
subjective point of view.  The choice between these two theories cannot
be made on the basis of purely logical arguments, but should be based
primarily on the RELATIVE explanatory power of the two theories.  And
the most important phenomenon to be explained in a theory of capitalism
is PROFIT, and all the important phenomena related to profit
(conflicts, technological change, crises, etc.)


----- Original Message -----
From: <fmoseley@MTHOLYOKE.EDU>
Sent: Saturday, July 21, 2007 11:08 AM
Subject: Re: [OPE-L] [On Fred's and your posts

Quoting cmgermer@UFPR.BR:

>> Fred:  My question about this argument is the following:  it seems
>> to be based on the assumption of "simple commodity production" (in
>> which each
>> worker owns her own means of production).  If so, then to what extent
>> does it remain valid for capitalist society?  What do you think?
> Claus:
> Rakesh sent me a post making what seems to me to be the same question:
> This is a very important point, and I don't have the whole explanation.
> However, in my opinion the following are some of the elements of the
> explanation:
> The law of value arises out of the contradiction between the division of
> labour and the absence of a social plan for the distribution of labour and
> of the products of labour among the individual producers. What I
> understand as the law of value, as I said in my previous post, is the need
> for the exchange of commodities to be based on the exchange of equal
> amounts of labor: the use-value which each individual offers to the
> society mus be the product of the same amount of labor contained in the
> use-values he/she receives from the society in exchange.
> Since the capitalist economy is a commodity producing economy, the law of
> value must of necessity remain valid, because the contradiction mentioned
> above remains as well. The individual producers are in this case the
> capitalist units of production, each one comprising a number of workers
> and say one capitalist, and the basic exchange is among those units of
> production, divided into the exchange among the workers and the exchange
> among the capitalists. The basic point is that the reproduction of the
> society is now dependent on the requirements for the reproduction of the
> capitalist units of production. But in the absence of a social plan for
> the distribution of labour and of the products of labour, the exchange
> among the capitalist units of production must follow the law of value.
> If there were not the capitalists, the exchange among the units of
> production would follow the law of value to its whole extent. The
> existence of the capitalists requires the units of production to produce a
> surplus in relation to the needs of their workers, which requires the
> workers to work a surplus time. But a surplus product will only exist if
> the reproduction of the workers follows the law of value, i.e., if the
> exchange among them is based on the exchange of equal SNLTs. In other
> words, the workers cannot get more from the social product than what is
> necessary for the reproduction of their labour power. The exchange among
> them is mediated by the exchange among the capitalist units of production.

What are the equal SNLTs that are being exchanged?  Does this mean that
the workers's means of subsistence should exchange at their values?
But they don't.  So what does it mean?

I would say that surplus-value (not the surplus product) exists only if
the money value produced by workers is greater than money wages they
are paid, which does not require that equal SNLT's be exchanged.

> Thus, social labour is split into two parts, one being the labour
> necessary to reproduce the labor power, the other being surplus labour, to
> which corresponds a surplus product. The value of the surplus product is
> subject to the law of value, because its global value corresponds to the
> surplus labour.

Exactly how do you define "necessary labor"?  As the labor-time
required to produce the means of subsistence or the labor-time required
to produce money value = money wages?  I think it is the latter (i.e.
NLT = money wage / MELT), which does not require that equal SNLT's be

I took another look at Rubin, and I think he does a pretty good job of
extending the "necessity of the regulation of social labor" argument to
the case of capitalism.  His argument briefly summarized:

1.  The regulation of labor in capitalism is more complicated than in a
simple commodity economy.  Labor in capitalism is regulated through the
regulation of capital.

2.  The regulation of capital is governed by equal rates of profit,
rather than by equal SNLTs.

3.  This gives rise to a new law of exchange:  prices of production.

4.  However, prices of production must ultimately be based on SNLTs,
because this is the (more complicated) mechanism through labor is
regulated in capitalism.

I think this is a good argument for the plausibility of the LTV, but I
still don't think this is a logical proof.  I think the ultimate
validity of the law of value depends on its explanatory power, as
demonstrated by the rest of the theory.

I will be out of town for the next week, and may not have much access
to email.


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