Re: [OPE-L] Okishio Theorem - does anyone think it is relevant?

From: Anders Ekeland (anders.ekeland@ONLINE.NO)
Date: Tue Nov 06 2007 - 14:54:17 EST


I had to find my copy of Howard and King in my archives - and get
time to read it - so this comes late in the discussion, sorry.

At 21:58 30.10.2007, you wrote:
>Hi Anders:
>If no one thought that it was relevant, then why was
>there so much time and effort
>allocated to answering it?

Because of the immense political effect. This is why the debate in
what kind of paradigm you can say that Marx was inconsistent, forgot
to correct the input prices, that profit rates cannot fall when there
is increased productivity etc. etc.

The TSSI answer to this is that only in a dynamic paradigm - clearly
Marx' own - can you declare him inconsistent etc.

One can then ask if not the method arguing by using models with "long
run equilibrium prices" in order to simplify away all "disturbing",
accidental influences in a fundamentally dynamic Weltanschaung -
common to both Smith, Ricardo and Marx - did not open up for the
static, non-dynamic today's main-stream neo-classical inspired
text-book economics, i.e. putting the classics "on their head". They
used long run equilibrium as a simplifying assumption - but in our
times - there is no other "rigorous" framwork.

The classics - including Marx - could not forsee the immense
domination of GE-economics - so the use of models where "everything
have come to rest" - all forces of competition have played themselves
out was innocent. That's why there are some textual evidence for Marx
as a simultaneist, cf. Klimans book Chapter 6.

I agree with Kliman that Marx is clearly not a simultaneist, but my
gut feeling (entirely subjective) is that Marx' himself was in some
ways paralyzed by this contradition between using static
(simultaneist) models to simplify and prove his results - and the
results he was convinced was true. My hunch is that if he had been
satisfied with his own solutions to the transformation problem
problems - he would have published Capital III himself.

He would have answered the challenges raised after the publication of
volume I etc. From Howard and King, A history of Marxian Economics,
Vol. 1, chap. 2 it emerges - IMO - that Marx and Engels was well
aware of the transformation problem, but none of them were able to
formulate a *completely* satisfying solution - otherwise this would
not still have been a problem - so many eager and bright minds have
studied this problem - and so far  - before TSS - the result have
been - that either you reject or ignore Marx' value theory - or you
are stuck with the transformation problem.

I think that f.ex. Farjoun and Machover, the "New solution", the TSSI
probably are pointing to the fact that the problem have to be
reformulated before it can be solved. Inside the Bortiewicz framework
there is no solution - only inconsitencies.

Like the TSSI I am convinced that Marx was not simultaneist, he was a
profoundly dynamic, dialectic thinker, but his use of "long-run
equilib. models has shaped the subsequent debate. That's why I am
much less condemning of those who have not yet seen the TSSI-light.
Maybe mainstream economics has to become truly dynamic before Marxist
economics returns full scale dynamic - and the TP finds a solution on
this basis.

> > And of course it is the monetary rate of profit we are
> > talking about - the only rate that capitalists care about.
>Individual capitalists care about the rate of return on investment
>(RRI), not the
>rate of profit per se.  I believe we had that
>discussion, though, before you joined

I meant the RRI.

>The question is what the range of conditions
>specified by the illustration include.
>Clearly, the range includes
>the "limit case" of V = 0 but V = 0 is a condition
>the limit in that no meaningful formula can be derived from
>that case. Thus, "at
>the limit" all formula  fall

I will return to this point Jerry, come back with a Kliman-like
example with constant money wages. But I challenge you to show that
Klimans model breaks down if there are constant money wages. Take
your time, I am not a professional revolutionary so my answer will
come in some weeks, if not months.


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