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

From: Ian Hunt (ian.hunt@FLINDERS.EDU.AU)
Date: Tue Nov 06 2007 - 17:04:41 EST

The political effect is important only for those who think that a
person's work is up for admiration: putting Marx on a pedestal is not
only a reflection of feudal political attitudes but has been
counterproductive politically. Marx's work is unfinished. The point
is to ask how we can build on it.

I know of no evidence that Marx thought in GE terms: at most he
contemplated what prices would be like when supply equals demand,
which Marx seems to have taken as the point where the relationship
between supply and demand is such that market prices are neither bid
up or down. This would have been compatible with many prices in the
market, rising or falling individual (but not average market) prices,
and rising or falling activity levels for some techniques of

>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.

Associate Professor Ian Hunt,
Dept  of Philosophy, School of Humanities,
Director, Centre for Applied Philosophy,
Flinders University of SA,
Humanities Building,
Bedford Park, SA, 5042,
Ph: (08) 8201 2054 Fax: (08) 8201 2784

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