Re: [OPE-L] contributions of the TSSI

From: Fred Moseley (fmoseley@MTHOLYOKE.EDU)
Date: Sat Oct 27 2007 - 11:50:36 EDT

Hi Jerry, brief responses below to your comments.
Sorry for the delay.  It's been a busy week.

Quoting glevy@PRATT.EDU:

> 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?

What I mean is that the logic of Marx’s theory is generally interpreted
to be the same as the logic of linear production theory, in the sense

1.  Input prices are determined simultaneously with output prices, by a
system of simultaneous equations, with the physical quantities of
inputs and outputs as the fundamental givens.

2.  The rate of profit is also determined simultaneously with the
prices of inputs and outputs by the same system of equations.

If you want to drop the adjective “Sraffian” to describe this logical
method, that is OK with me.  But in the context of interpretation of
Marx’s theory, the adjective “Sraffian” seems to be accurate and more
informative than linear production 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?
> No, there were rejections and critiques of the method of simultaneous
> determination (e.g. by Shaikh) before the TSSI entered the picture.
Shaikh did not really challenge the logic of simultaneous
determination.  He only said that the “iterative method” was a
different mathematical technique for arriving at the same conclusions
as the simultaneous determination method.  The fundamental assumptions
were still the physical quantities of inputs and outputs.  This did not
challenge simultaneous determination in any fundamental way.

>> 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.

I should not have said “first”.  Whether or not the TSSI was the
“first” to challenge the logic of the Okishio theorem is not that
important.  I would revise that to say that their challenge to the
logic of the Okishio theorem has been more influential (and thus a
contribution) than these other authors.   Shaikh’s papers do not claim
to challenge the logic of the Okishio theorem, but only to assume a
different “decision rule” for the introduction of new technology.
Ernst considers himself a member of the TSSI (as in many old OPEL
posts), a “forerunner” of sorts.  I don’t remember (Ian) Hunt’s 1983
paper, but I doubt that he argued that the Okishio theorem is based on
a different theory of the rate of profit from Marx’s theory, since he
has recently defended simultaneous determination on this list.  Ian can
obviously speak for himself, and I would be very happy to be wrong
about this.

> 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.
I partially agree with you here.  I agree that TSSI initially claimed
to “refute the Okishio theorem on its own terms” (i.e. not that
Okishio’s “terms” were different from Marx’s “terms”).  But in Kliman’s
book (Chapter 7), the main argument is that the rate of profit in the
Okishio theorem is determined in a different way from the rate of
profit in Marx’s theory.  There is one paragraph that argues that the
Okishio theorem “also fails on its own terms”, but this claim is
emphasized much less than before.

What I think is the contribution of the TSSI is the argument that the
Okishio theorem is based on a different theory of the rate of profit
than 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?
> 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.

This is probably our fundamental disagreement or rather different
priorities.  As I have argued before, I think there is still valuable
and necessary work to be done on these abstract theoretical issues.
And of course there is also much valuable and necessary work to be done
on more concrete applied issues.  To each his own priorities.


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