Re: [OPE] Are Regulation Theorists Marxists?

From: Anders Ekeland <>
Date: Sat Aug 22 2009 - 14:22:46 EDT

 From Jurriaan's answer it is clear that we stand on the same LTV
ground. Juriaan also formulates several questions still to analysed,
pointing to all the more concrete elaboration of the core ideas of
Marx that Marx did not have time to go into, or where he in light of
experience did not get it right. I have not very much to add actually.

That there are several currents of "Marxism without Marx" is clear.
But recognition of the LTV-paradigm (not as a specific theory) is one
of the indicators of whether someone that claims to be a Marxist is
with or without Marx. In the latter case they should not label
themselves Marxist as most regulation theorist do not do, being
honest intellectuals who have contributed significantly to the
development of the science of economics.

Well done Juriaan!


At 23:15 20.08.2009, you wrote:
>Hi Anders
>In reply to some questions you raise:
>I think Marx did indeed see labour as the primary "value-creating
>activity", since ultimately you cannot exchange more than there is
>to exchange, beyond that you can only trade claims to present, past
>and future income and property rights. I have never denied that sort
>of idea. So human work is absolutely necessary to create
>replacements for, and net new additions to, the stock of exchanged
>objects, that's a simple and essential insight of historical
>materialism. If you withdraw all labour, you are left with a ghost
>town. But it would obviously be a crude 101 Marxist sociology to
>claim that "the economy" exists only of production of goods and
>labour-services (even if this wrong idea is repeated in government
>budget statements, such as when GDP is equated with "the whole economy").
>As I have pointed out many times on OPE-L, the wealth of society is
>not restricted to the current net new output of (privately produced)
>commodities. Beyond this, there exists a whole accumulation of
>physical capital and non-capitalised use-values consisting of real
>estate and durables, and financial assets which are claims to past,
>present and future income - assets which, whether they are new or
>second-hand, are also traded. In addition there is the wealth of
>knowledge in people's heads. Moreover all kinds of products are
>created and exchanged external to the specifically capitalist mode
>of production.
>The question then is, whether the trade in non-productive assets or
>non-capitalistically produced assets is regulated by the law of
>value. To some extent, they must be, if you accept Marx's theory,
>since many of the prices of these assets must be influenced by
>current (re-)production costs and the incomes generated by it which
>remains a physical reality that is difficult to avoid. But in fact
>the prices of many assets, particularly financial assets, are not
>regulated by the law of value at all, even if they ultimately assume
>its operation, i.e. ultimately assume a price-structure determined
>by current production costs.
>Marx frankly admits this also, insofar as e.g. "fictitious capital"
>does not necessarily bear any proportionate relationship at all to
>the value relations that exist behind them, and deviate sharply from
>them, indeed this is precisely why they are fictitious in Marx's
>eye, i.e. they bear no determinate relationship to quantities of
>labour effort. Real estate (land, waters, buildings, structures) may
>also be sold at prices completely unrelated to their reproduction
>cost in labour-time. Second-hand assets may be sold at all kinds of
>prices quite unrelated to the labour-time which it took to make them
>in the past, or to current labour-costs. Stocks ands securities are
>constantly being overvalued and undervalued, in ways which may in
>fact not have anything much to do even with the anticipated incomes
>from production. Maybe this is not obvious to a Marxism 101
>student, but it is obvious if you make a careful study of social
>accounts and social statistics.
>Since nowadays, in richer OECD countries with ageing populations,
>the value of capital external to production is greater than the
>capital tied up in production, it would be a stupid error to think
>that the law of value governs the allocation of ALL resources in
>society. That is simply not true, and I am amazed that scholars
>still keep saying that it does, or that the law of value is a
>general equilibrium principle. It is also odd that radicals would
>deny the existence in modern society of the economic constraint
>exerted by the law of value, when it is so obvious, even in everyday
>working life.
>Marxists often fall into the trap of thinking that Marx provided a
>theory of capitalist society and the capitalist economy as a whole.
>He did not, and he very specifically points this out in numerous
>places: his aim was only to depict the capitalist mode of production
>in its "ideal average", in terms of its specific value relations,
>which at times takes him to an astronomic level of abstraction from
>the real world. For example, he says explicitly he will discuss the
>credit system only insofar as it is relevant to, and affects, the
>capitalist mode of production. If therefore you took his theory of
>credit as the whole story, you would go very wrong. This leads to
>all sorts of attempts to complete the theory, of which regulationism
>is an example.
>As a corollary, as I aim to cover in one future article, any talk of
>reproduction schemes must recognize "the results of accumulation",
>which include a growing pile of assets existing external to the
>sphere of production. And likewise, any theory of money and credit
>must recognise that price structures are influenced by the very
>existence of this pile. When for example I raised the question of
>real estate prices years ago on OPE-L there was some puzzlement
>about what this has to do with Marxian political economy - shouldn't
>we be talking instead about the nastiness of exploitation at the
>point of production, the inevitably falling rate of profit and the
>intricacies of the transformation problem? - but as we can now see,
>these real estate price-levels can have a gigantic influence on what
>happens to capitalist economies, and I feel vindicated in my
>inquiries in that sense.
>As regards the theory of money, Marx simply assumes gold money and a
>MELT scalar for abstract labour, explicitly noting that it is only
>an assumption. It is moreover an assumption which applies only to
>the new gross output. He is mostly rather unconcerned with prices as
>such, because he is concerned with the fundamentals of the creation
>and circulation of capital, of which prices are the reflex, i.e.
>with the value relations from which prices derive and on which they
>ultimately depend. That may be an entirely satisfactory procedure
>for his explanatory purposes, but it would be a silly idea to think
>that a "commodity theory of money" really applies in reality, or
>indeed that Marx espoused a commodity theory of money as a serious
>explanation of monetary phenomena, when all he tried to do was to
>show how money necessarily emerges out of the growing sophistication
>of commodity trade. You may be able to find some historical
>situations where a commodity theory of money explains trading
>relations fairly well, but that is probably more an exception, than the rule.
>Marx himself never said of his theory that it was a labour theory of
>value - I have never been able to find any locus anywhere, which has
>Marx saying that he regarded his own theory as a labour theory of
>value or "the" labour theory of value. When he talked about the
>labour theory of value, he was usually referring to the fullfledged
>Ricardian theory of value, or to the lineage of political economists
>from William Petty to Adam Smith onwards, who believed that economic
>value expressed labour-time and production costs. This in contrast
>to vulgar theories according to which demand is explained by supply,
>supply is explained by demand, and prices are explained by prices.
>Marginalist theory or utility theory was not invented after Marx, it
>existed all along, for centuries, as you can read for example in
>Schumpeter's history of economic thought. Marx was also well aware
>of this, from the very start of his studies in political economy, as
>shown by his reading notes from 1844 for example (a number of these
>notes are not easily accessible in English). But to him it seemed
>obvious that the marginalist theory or the utility theory just
>didn't have much explanatory power. He makes this all very clear
>also in his Contribution to the Critique of Political Economy, where he says:
>"Although use-values serve social needs and therefore exist within
>the social framework, they do not express the social relations of
>production. For instance, let us take as a use-value a commodity
>such as a diamond. We cannot tell by looking at it that the diamond
>is a commodity. Where it serves as an aesthetic or mechanical
>use-value, on the neck of a courtesan or in the hand of a
>glass-cutter, it is a diamond and not a commodity. To be a use-value
>is evidently a necessary prerequisite of the commodity, but it is
>immaterial to the use-value whether it is a commodity. Use-value as
>such, since it is independent of the determinate economic form, lies
>outside the sphere of investigation of political economy. It belongs
>in this sphere only when it is itself a determinate form. Use-value
>is the immediate physical entity in which a definite economic
>relationship - exchange-value - is expressed."
>It is of interest to note here, that Marx never actually ruled
>use-value out from political economy, as many Marxists thought; he
>says only that it plays a role only if it has itself "a determinate
>form", we are talking here about use-values as object-classes or
>useful/utility functions, where certain "kinds" of use-values are
>technically indispensable for production and consumption, an idea
>reflected in the modern notion of a "product chain" or "value chain"
>or "commodity chain". For example, labour-power has a certain
>use-value, and an employer is usually looking for a particular kind
>of use-value (a particular kind of ability or skill) and not just
>labour power in general. Hence the political economy of skills and
>the labour market. Or, in the reproduction schemes, Marx
>distinguishes between consumer goods, means of production and luxury
>goods which are also object-classes of use-values.
>Marx was also well aware of equilibrium theory, but he regarded it
>as something which evaded the central problems:
>"Supply and demand regulate nothing but the temporary fluctuations
>of market prices. They will explain to you why the market price of a
>commodity rises above or sinks below its value, but they can never
>account for that value itself. Suppose supply and demand to
>equilibrate, or, as the economists call it, to cover each other.
>Why, the very moment these opposite forces become equal they
>paralyze each other, and cease to work in the one or the other
>direction. At the moment when supply and demand equilibrate each
>other, and therefore cease to act, the market price of a commodity
>coincides with its real value, with the standard price round which
>its market prices oscillate. In inquiring into the nature of that
>value, we have, therefore, nothing at all to do with the temporary
>effects on market prices of supply and demand. The same holds true
>of wages and of the prices of all other commodities."
>The centrepiece of Marx's theory of capital IMO is, simply put, to
>trace out the full human implications of the social reality, that
>ownership of (private) property can claim the labour of others and
>regulate social interactions, can claim social labour and control
>social behaviour, in a situation where the whole of production has
>been capitalised, i.e. reorganised in terms of commercial principles
>such that all (or most) inputs and outputs of production are
>supplied via the market. Marx is of course particularly concerned
>here with the overall meaning and effects of all this, for the
>working classes. Capital and even joint-stock type ventures already
>existed in ancient Mesopotamia, but that did not mean that a
>capitalist mode of production existed there on any significant scale.
>Why is such an inquiry important? Well, among other things, because
>the spread of this social relationship of production, through market
>expansion and "primitive accumulation", has caused more economic
>growth, more population growth and more transformation of the
>physical and social world in two hundred years than in all the
>centuries of human history that came before it. It has torn out all
>traditional relationships and replaced them with relations subject
>to the movements of capital. You have to be able to explain how all
>this could happen, and what its dynamics are, and why, although
>markets existed for at least five thousand years, they didn't
>previously produce such vast economic growth. Thus we can already
>read in the Communist Manifesto for example:
>"The bourgeoisie, during its rule of scarce one hundred years, has
>created more massive and more colossal productive forces than have
>all preceding generations together. Subjection of Nature's forces to
>man, machinery, application of chemistry to industry and
>agriculture, steam-navigation, railways, electric telegraphs,
>clearing of whole continents for cultivation, canalisation of
>rivers, whole populations conjured out of the ground -- what earlier
>century had even a presentiment that such productive forces
>slumbered in the lap of social labor?"
>Marx obviously did not say land is a "source of value", he says land
>is economically a source of material wealth. Unimproved land in his
>theory has no economic value, at best a price not determined by
>value. But improved land in his theory has an economic value,
>insofar as labour has been expended on it, to make it more
>productive and so forth. This idea is partly recognised in social
>accounts, since the value of new land improvements is included in
>gross product, although the transfer of property rights for land is
>not regarded as adding new value.
>Personally I am not a Marxist, it doesn't make much sense to me
>anymore, and such an affiliation only causes trouble, to the extent
>that you have to face great intellectual arrogance, quasi-religious
>sensitivities, a preoccupation with orthodoxy, doctrinairism,
>misunderstandings, misappreciations, badly articulated moral
>disputes, and so forth. It can get in the way of research and
>healthy human relations. When you say Marx made an error, they come
>down on you like a tonne of bricks, and if you say Marx made an
>error and this is how you solve it, then you are written off as a renegade!
>More importantly, Marxism is often the worst enemy of what Marx &
>Engels aspired to. When originally I began to study the Marxian
>tradition at university 1979-1982, about which I read quite a lot,
>the lecturers taught mainly from the perspective of Louis Althusser
>and Gerald Cohen, that kind of stuff, neat and tidy definitions. But
>I almost immediately sensed this wasn't very satisfactory, and I
>began to read Marx & Engels themselves, which were actually not so
>difficult to read, and they made a lot more sense. And I realised
>that very often Marxism has almost nothing to do with what Marx &
>Engels really thought, in the context of their times, and didn't
>think things through. And, actually, Marx was often
>decontextualised, you didn't really know for example about who among
>his contemporaries he was arguing with, what they said, and so forth.
>Marxism is often just an ideology of people who want to hang out as
>erudite radicals, or yearn for an instant masterkey to the big
>picture, and it often contains an admixture of ill-digested social
>theories which happen to be fashionable at the time. Marxist parties
>think, that it is their task to promulgate Marxist ideology, rather
>than creatively apply Marx's insight using their own nouse. But this
>is very often rather unhelpful to my own project of fathoming the
>truth about society, that journey of discovery if you like. It can
>take a great deal of work to form adequate concepts really guided by
>the leads provided by Marx & Engels, but that is not very attractive
>to many people, because they want to appropriate an instant insight
>into the latest, greatest and most profound truths, and not be
>burdened with all the work it takes to get there. I worry sometimes
>about the future of science, since, in science, you often have to do
>a lot of work to get a result that, although important and valuable,
>simply isn't very spectacular, and doesn't make you an instant
>popstar. And a lot of that work can be tedious and boring. It is so
>much easier to grab the latest and the greatest off someone else.
>Sebastian Timpenaro points out in his book On Materialism, typically
>the intellectuals tried to revamp Marx's thought by incorporating
>the latest fashionable theories into it, in order to show how Marx
>had already explained everything better, with the ironic result that
>Marx was assimilated to these theories, rather than the other way
>around. Sort of like Goethe's saying, "you think you push, and you
>are pulled", you think you are making great intellectual strides,
>but you are really only just catching up with the latest
>intellectual fashions, only vaguely aware of the social and
>ideological determinants behind your own thought. Whereas often you
>need to be in a certain position to really understand something, as
>an outsider it will be difficult to get things in proportion.
>Marxism IMO contains a lot of badly formed ideas, and I could in
>fact write plenty academic articles on rather simple foundational
>ideas which are really faulty and which caused enormous errors in
>social thought, sort of like "Inputs, outputs and other laughs in
>economics". Economics and social theory generally is, in my opinion,
>often a mixture of fact and fiction, of science and ideology, the
>inferential systems seem "scientific" and "objective", but they are
>in reality more often a theoretical reflection of unacknowledge
>moral biases, perhaps hidden by complex mathematical formula's which
>seem to indicate "logical rigour", "objectivity" and luminous
>intelligence. There is nothing wrong with a partisan moral
>perspective, indeed we all have one, but it is another thing if a
>moral perspective insinuates itself surreptitiously in a viewpoint,
>or a maze of conceptual distinctions, which is claimed to be
>"objective" and "scientific" or even "value-free". Then we get all
>sorts of reifications.
>That is not to say that some Marxists haven't made great
>intellectual and scientific contributions to what we know, and to
>human culture generally. They obviously have, their imprint on
>categories used by everybody nowadays is clear, and I've cited
>plenty of them. But for every great thinker there are oodles of
>others who just sow confusion and don't really clarify things. And
>at that point, the label isn't very useful to me anymore, and if I
>do use the label, I am implicated in all sorts of things I honestly
>want nothing to do with. If somebody says he's a communist, a
>radical democrat, or a socialist, or social democrat, or a
>libertarian, that makes sense to me, but a "Marxist"? Which
>physicist calls himself an "Einsteinian"? Which biologist calls
>himself a "Darwinian"? It doesn't make much sense to me. Once you
>affiliate to Marxism, you immediately get all the pressures and
>burdens of doctrinal orthodoxy, moral fervour, political
>animosities, and ill-considered attempts to plug the lacunae in
>Marx's ideas, and those things get in the way of what I want to do,
>the questions I want to ask. It's a question of developing your own
>creativity, rather than be endlessly burdened by having to make
>ritual odes of allegiance to authorities... who turn out to be not
>really authorative anyway.

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