[OPE] devaluation and revaluation of variable capital

From: Jurriaan Bendien (adsl675281@tiscali.nl)
Date: Mon Feb 11 2008 - 15:31:05 EST


Your reply does not seem very intelligent to me, though you are obviously intelligent. I am not a Marxist at all, and I do not think that Marx exhaustively describes or explains all the phenomena of economic value. I have never argued that either, as far as I am aware. Nor do I think that Marx claimed anything like that.

Although I don't prefer Ernest Mandel's style (though he writes clearly, at least), he makes a perfectly valid point:

"[Marx's Capital] was never intended as a handbook to help governments to solve such problems as balance-of-payments deficits, nor yet as a learned, if somewhat trite, explanation of all the exciting happenings in the marketplace when Mr Smith finds no buyer for the last of his 1,000 tons of iron. It was intended as an explanation of what would happen to labour, machinery, technology, the size of enterprises, the social structure of the population, the discontinuity of economic growth, and the relations between workers and work, as the capitalist mode of production unfolded all its terrifying potential. From that point of view, the achievement is truly impressive." (Cap. Vol. 1, Penguin intro, p. 22-23). 

I could quibble with phrases such as "terrifying potential", but the main point is fair enough I think.

I do not understand how marginal utilities provide any useful precision, because "utility" is something which is barely quantifiable as such, if at all. I can quantify "utility" only by finding proxies which, according to some argument, provide an indicator of utility, but the whole thing quickly becomes tautological. Of interest to me is not an ideological justification of the rationality or usefulness of markets, I'm convinced they have their place, but an explanation of how they really function, never mind the bullshit, and that's much harder.

If you know anything about the world economy, you know that "scarcity" does not ultimately explain very much about the allocation of global resources, and anyway the very concept of scarcity is as problematic as the concept of value, insofar as it has both subjective and objective aspects. I would not deny that scarcity is an important allocative principle or that scarcity can influence prices, but insisting on that doesn't solve any problem, since there are many different kinds of scarcity. If scarcity is to have any explanatory power, I would need to get highly specific about what sort of scarcity we are talking about.

The concept of "average socially necessary labourtime" refers to a relationship between supply of products and the need for those products, recognized via effective demand. That concept may not be adequate for an economist interested in the optimal allocation of (scarce) resources, but it was adequate for the purpose of Marx's critique of political economy. Marx was hardly an expert in the optimal allocation of resources, I mean, he couldn't even make an independent living on his own strength. He had great strengths, but that wasn't one of them.

I'll try one of these days, if I see an opportunity, to visit Austria, and I will see if I come to different or better conclusions. For the rest, I do think a number of points you make are quite valid and I can learn from them - in that sense you are fighting the wrong guy. That aside, these topics are very complex, and I regret to say I have not yet found an adequate way to express my ideas about them effectively, in a very concise way. I do not have the leisure to think through the problems thoroughly as I would like, to get to a good crisp formulation of their essence. That is why I am rather reluctant to say a lot about it at this stage. Other OPE-Lers can do so better than I can, and it's better if I mainly follow the discussion.

My reference to gross output is not trivial, since the total number of actual and ideal prices extant in the world is a multiple of the prices implied in gross output. Marx was primarily concerned with the valuation of the new output of capitalist production, not all prices, or all assets, for which labour-value may be largely irrelevant.


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