Re: [OPE-L] Okishio Theorem

From: Rakesh Bhandari (bhandari@BERKELEY.EDU)
Date: Sat Nov 03 2007 - 12:59:01 EDT

Most interesting way of putting things, Fred.  Perhaps though the theorem
can be separated
from the mode of proof, though.

 That is, the theorem is as I said it was--an impossibility theorem:
viable technical change in itself cannot reduce the profit rate.  TSSI
allows for interperiodic
technical change, which means that simultaneous valuation has to be
extirpated as Ernst, a
TSSI predecessor put it. But since TSSI does confine itself to technical
which Okishio would have consisdered viable, this means the TSSI does accept
Okishio's framing of the problem.

So it's not that TSSI found an error in Okishio's calculations; they found
error in his limiting himself not to what he said--viable technical
change; instead he had limited himself to only the one shot form of viable
technical change. Holding Okishio to all forms of viable technical change
does not seem to me an external critique. Or at least it's immanent in
important ways.

 At any rate, TSSI does respond effectively to Philippe Van Parijs's use
of Okishio to dismiss the validity of Marx's theory of the tendency for
the rate of profit to fall, and as far as I can see van Parijs' critique
of Marx has been the single most iinfluential critique of Marx's theory
on the profit rate. I know of no reply by van Parijs (now at Harvard?) to
Freeman and Kliman.

> Quoting Rakesh Bhandari <bhandari@BERKELEY.EDU>:
>> Fred you write:
>> "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."
>> But TSSI a refutation on Okishio Theorem on its own terms--for all
>> practical purposes. Okishio Theorem is according to standard
>> interpretation an impossibility theorem--it's impossible for viable
>> technical change in itself to depress the profit rate. TSSI did the
>> impossible; it showed that viable techical change can depress the profit
>> rate. But...TSSI has not demonstrated that empirically David Laibman's
>> tracking theorem (the money rate of profit tracks the material rate of
>> profit) will not hold in the long term. But TSSI did the impossible, and
>> I
>> can understand why they are so damn excited about it. Doing the
>> impossible
>> is a large part of what intellectual progress is, no?
>> Rakesh
> I think there is a basic confusion in Rakesh’s comments and in Alan’s
> reply to Rakesh (which I am not copying here because of its length).
> Rakesh states the “impossibility theorem” as:  “it’s impossible for
> viable technical change in itself to depress the rate of profit”.
> But WHICH rate of profit and WHICH THEORY of the rate of profit?
> Whether or not this theorem is true depends on one’s theory of the rate
> of profit.  It may be true for one theory of the rate of profit, but
> not true for other theories of the rate of profit.
> The TSSI and the Okishio theorem are based on DIFFERENT rates of
> profit.  The Okishio theorem is based on linear production theory and
> simultaneous determination and the TSSI is based on temporal
> determination.  The Okishio theorem is true in terms of its own theory
> of the rate of profit, but it is not true in terms of the temporal
> theory of the rate of profit.  As Anders said in a recent post:  “The
> premises of Okishio is clearly different from Marx’s.”
> This “impossibility theorem” cannot be applied in blanket fashion to
> all theories of the rate of profit, but only to the theory of the rate
> of profit on which it is based – linear production theory.  Okishio
> claimed that his theory applied to Marx’s theory, but he was wrong,
> because Marx’s theory of the rate of profit is different from linear
> production theory.
> Even though Alan continues to claim that the TSSI has refuted the
> Okishio theorem “on its own terms”, they have not done so.  They have
> refuted the Okishio theorem by substituting an entirely different
> theory of the rate of profit.  Which in itself is an important
> contribution.  It opens the door to other interpretations of Marx’s
> theory of the rate of profit besides linear production theory.  But
> claiming more than that obfuscates what the real contribution of the
> TSSI is.
> Comradely,
> Fred
> ----------------------------------------------------------------
> This message was sent using IMP, the Internet Messaging Program.

This archive was generated by hypermail 2.1.5 : Fri Nov 30 2007 - 00:00:03 EST