[OPE-L] contributions of the TSSI

From: Fred Moseley (fmoseley@MTHOLYOKE.EDU)
Date: Sun Oct 21 2007 - 15:34:46 EDT

Hi Jerry,

I will repeat myself and say that I think that the proponents of the
TSSI have made the following important contributions to Marxian
scholarship, even though I disagree with them on some issues.

1.  They have argued that Marx’s theory is not based on the logical
method of simultaneous determination, contrary to the prevailing
Sraffian interpretation of Marx's theory, but is instead based on the
logical method of temporal or sequential determination (similar in this
respect to the theory of the monetary circuit and much of
Post-Keynesian theory).  Even if the TSSI turns out to be wrong on this
issue (and I think they are mostly right), they will have contributed
to the development of Marxian theory by forcing a thorough
consideration of this fundamental issue, and this probably would not
have happened without the TSSI.

Jerry, don’t you think this is a contribution?

2.  Relatedly, they were the first to criticize the Okishio Theorem on
the grounds that the Okishio Theorem is based on a different theory
from Marx’s theory – linear production theory which assumes
simultaneous determination. Most clearly, in Marx’s theory, the rate of
profit is determined prior to prices of production (by the ratio of the
aggregate totals of surplus-value and capital invested), whereas in
linear production theory, the rate of profit is determined
simultaneously with prices of production (plus also prices of
production in Marx’s theory are industry totals, and prices of
production in linear production theory are unit prices).

Therefore, conclusions reached by the Okishio Theorem do not
necessarily apply to Marx’s theory.  Almost all the prior (i.e.
pre-TSSI) discussion of the Okishio Theorem had implicitly assumed (and
most of the discussion continues to assume) that Marx’s theory is the
same as linear production theory, and so that the Okishio Theorem
applies to Marx’s theory (as Okishio himself claimed).  But the TSSI
has questioned that fundamental assumption, and this has opened up an
important new debate in the evaluation of Marx’s theory of the rate of
profit.  I think this is another significant contribution.

Jerry, don’t you?

3. Relatedly again, they have forced a more thorough consideration of
the issue of current cost vs. historical cost valuation of constant
capital.  I disagree with them on this issue, but I think they have
raised an important problem, which most people continue to ignore:  if
constant capital is revalued to current cost, this involves a real loss
to the firms.  If one simply ignores the loss, and revalues the
constant capital to current cost, then the rate of profit will be
increased.  But what happens to the loss?  Is it simply written off the
books, without any negative consequences?  How should the loss be taken
into account?

I am not sure what the right answer to this question is, but I think it
is an important question, that has been raised by the TSSI.

Jerry, don’t you think this is a contribution?


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