Re: [OPE-L] non-contributions of the TSSI

From: glevy@PRATT.EDU
Date: Mon Oct 22 2007 - 06:05:16 EDT

Hi Fred:

Short responses to your questions appear below.

> 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,

The Sraffian interpretation "prevails"?  How did you come to that assessment?

> 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?

No, there were rejections and critiques of the method of simultaneous
determination (e.g. by Shaikh) before the TSSI entered the picture.

> 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

No, I don't think that's true either: they were not the "first".
This claim was made - to one extent or another - by Shaikh (78;80);
Weeks (82); Fine (82); Ernst (82) [NB: long before the TSSI came into
being) Clawson (83); Hunt (83); Naples (89); et al.

Moreover, Kliman's critique of the Okishio Theorem is _not_ based most
fundamentally on the claim that it is a different theory than that
advanced by Marx.  Rather, his claim is that it is inconsistent in its
_own_ terms.

> – 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?

See above.  It is probably the case that hardly anyone would be talking
about the Okishio Theorem or discussing allegations of internal
inconsistency in Marx had it not been for the TSSI.  They deserve
dis-credit for re-focusing our attention on those topics. There had been
extensive discussion on the latter in the '70's and '80's and the former
in the '80's: the TSSI has simply succeeded in getting others to chew
again on those old bones rather than move forward to discuss more
meaningful and less abstract questions.  Most surplus approach economists,
indeed, were bored by those debates decades ago. At least Steedman went on
to write some interesting stuff on the theory of international trade
rather than being continually locked into a Time Warp discussing the 19th
Century TP and related controversies.

> 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?

No. An important contribution would be to consider in Marxian terms the
_actual_  relation between the valuation of constant capital and the rate
of profit.  Their exclusive focus on Marxological interpretive questions
prevents them from tackling in a meaningful way this question.

They did - as a practical matter - have one significant contribution: they
created the IWGVT which -- despite all of its problems (of which there were
many) - did host conferences where Marxians from different theoretical
perspectives and traditions could meet and exchange ideas.  Then - in
relatively short order - they effectively killed what they had created.
Kliman's law suit against URPE was a big factor in this decline but - more
generally - the nasty, non-collegial atmosphere at the mini-conferences
turned people off. Simply put, scholars who weren't supporters of the TSSI
 basically said  "!Basta!" and walked with their feet.  Like many other
obsolete organizations that have passed into history, it remains only

In solidarity, Jerry

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