[OPE] Specially for Patrick Bond: David Harvey on equilibrium

From: Jurriaan Bendien <adsl675281@telfort.nl>
Date: Fri Sep 18 2009 - 07:18:08 EDT

I'm sorry fellas but you obviously haven't understood what I said, and you
simply ignore what I did say and you start talking about something else, and
blaming me for being "impersonal" though at other times I get accused of
being "personal". So now why don't you stop being "whiny-ass titty-babies"
when I contest your sacred equilibrium dogma, and respond to the argument as
put, like grown men!

It is very obvious that if we note an imbalance, that we could also imagine
what it would mean, if there was a balance, and that indeed we can cognize
the imbalance only because we have an idea about what a balance would be -
even if, what is a balance to one person, represents an imbalance from the
point of view of another person, so that the very meaning of what a balance
would be, is contested. But all this is trivial, because the real questions

(1) what the balance actually consists of, or what is being balanced;
(2) whether a balance exists at any time, or whether it is merely a
theoretical, idealised extrapolation;
(3) what actually constitutes the balance.

Professor Levy aims to dispense with the whole question, by exhorting that
he cannot for the life of him conceive of disequilibrium without
equilibrium... when all else fails, start playing word games and talk
semantics like a Left-Hegelian!

Poor old Karl Marx... if he could see these discussions no doubt he would
laugh his head off, or at least tear his hair out with frustration about the
insipidly poor level of discussion.

In point of fact Marx was neither concerned with equilibrium theory nor with
disequilibrium theory, like the Marxists, hanging on the coattails of
bourgeois opinion, are, he just explained that certain necessary proportions
were required for the expanded reproduction of capital, and that, at a
certain point, the constantly uneven development of capitalism created
disproportions of a type and large magnitude for which the market system
could no longer adjust or compensate, causing a crisis, manifesting itself
in a decline in production, underinvestment, excess production, and
unemployment. He explain in detail how these critical disproportions emerged
out of the very functioning of the accumulation process itself, in which
everything is in continuous movement, so that any assumed constant is only
an abstraction.

This did not mean at all, however, that any genuine equilibrium first
existed, and then turned into disequilibrium, as Marxist philistines,
blithely borrowing the bourgeois terminology, claim. There was simply no
evidence for that whatsoever, it was an ideological depiction.

It just meant, that the disproportions between the supply and demand for
money, commodities and capital which existed all along, but which could
previously be adjusted for by altering the trading pattern, could no longer
be adjusted for, as proved by the occurrence of real and large capital
losses, pushing many capitalists out of business, and creating unemployed
labour unable to find work.

The perpetual imbalance was, in other words, a matter of degree and type;
the trading system could flexibly adjust for many disproportions, indeed
inadequate supply or inadequate demand were the very life of the market, it
motivated market actors to scurry around the marketplace trying to buy and
sell, but the trading system could not adjust for some other disproportions,
something which became critical at some point, because they threatened to
destroy the whole trading system, leaving sellers without buyers and buyers
without sellers, and thus destroying the very existence of a market. If
suddenly there is no market, business people do not know what to do
anymore... their existence depends on there being a market.

The reason why Marx was never concerned with market equilibrium and
disequilibrium as such was, because he never believed, as in reified
bourgeois ideology, that society was held together by price movements and
markets, or that price movements accomplished a real aggregate balance
between supply and demand. That would be an undue concession to the
bourgeois exultation of markets as the most efficient means to satisfy human
needs. The chatter about equilibrium and disequilibrium was merely produced
by economists skating on the surface appearances of the market. Marx knew
very well that markets were always either growing or declining, to a greater
or lesser extent, and never in balance at any time. As a historical
materialist, Marx believed the "hidden order" was to be found in the
physical and social compulsion to produce, reproduce and consume the
necessaries of human life continuously, and in the social relations between
living human beings which that compulsion necessitated - social relations
existing "independent of their will".

Instead of talking about equilibrium, Marx therefore talked instead about
the conditions for enlarged economic reproduction, and he did not seek the
"hidden order" of capitalist society in the aggregate statistical result of
"random" price movements, but in the reproduction of the social relations of
production, codified in enforced personal and property rights, permitting
the accumulation of capital to continue. This economic reproduction process
was, within certain limits, compatible with all kinds of price fluctuations
and disproportions at any time, making the academic philosophies of economic
balance largely ideological, since such a balance never existed in the real
world, and markets could not accomplish it, by their very nature. At most
market action could accomplish a positive bank balance, and that was really
what people were interested in most of all.

As I have said, I do not deny the utility of equilibrium theory for certain
analytical purposes, such as establishing how many items you can trade at a
certain price in a given setting, or what magnitude of fluctuations would
exceed the limit of tolerance and destroy the trading system. That is indeed
precisely how business people and governments use equilibrium ideas to
fathom the markets. What I deny is the further ideological claims of
equilibrium theory about markets and the nature of social reality, and I
think it is a very sad thing indeed that "Marxists" have intellectually
taken on board these intellectual reifications, thereby sinking into a
problematic alien to the liberation of the workers from the dictates of

In bourgeois theory, it is argued that, given certain assumptions, a model
can be constructed with a distribution of money-prices such that all markets
will clear, and thus, that market equilibrium is attained, and in principle
attainable. Marxists contest the assumptions as being unrealistic, and...
then try to devise a model which shows that that there exists a distribution
of money-prices which is determined by labour-time. The aim of this exercise
is to prove that equilibrium prices can be effected by the law of value, in
other words, that economic equilibrium could in principle be accomplished by
the law of value. But what this really has to do with Marx's concerns, given
the above, is unclear to me, and it is unclear to me that it has anything to
do with economic reality. It is just another philosophy of balance where the
balance is accomplished in a different way than you thought it was. Well,
fair enough, but with equal force it can be argued that this new idea of
balance also rests on assumptions which are very much at odds with the real
world. What is the point of science, if it only tells us that something
would exist "if" it existed, but it doesn't exist? One might fairly object
that it is intellectual masturbation.


PS - As regards Mr Goecmen, I am sorry that I unintentionally hurt the
subtle nuance of his exalted feelings by using plain workers' language
rather than scholastic pedanticism and the dreary code of Marxist
quasi-religious doctrinairism, but I used the language I used (1) because I
was writing in a hurry, not having the luxury of philosophizing endlessly
and refining my speech meticulously in an academic environment where other
people do all the shitwork for me, including nicely editing my exalted
thoughts for me without at all upsetting their subtle and profound meaning,
and (2) because I tried to state the main point as plainly as I could. I
disagree that there is anything like "Scientific Marxism" because I regard
Marxism as the ideology of the New Marxist Exploiting Class, the taxation
socialists, and not as a "science". Actually, Engels himself referred to
"the false assumption that Marx wishes to define where he only investigates,
and that in general one might expect fixed, cut-to-measure, once and for all
applicable definitions in Marx's works. It is self-evident that where things
and their interrelations are conceived, not as fixed, but as changing, their
mental images, the ideas, are likewise subject to change and transformation;
and they are not encapsulated in rigid definitions, but are developed in
their historical or logical process of formation."
http://www.marxists.org/archive/marx/works/1894-c3/pref.htm The point is to
understand the idea behind the words, and the reality behind the idea. The
"dialectics" of Professor Goecmen and Professor Levy consist of the
luminous, fantastically erudite insight (sic.) that the meaning of "night"
requires the meaning of "day", but I take a rather dim view of such
sophistry, and would rather prefer to get on with the analysis.

ope mailing list
Received on Fri Sep 18 07:20:32 2009

This archive was generated by hypermail 2.1.8 : Wed Sep 30 2009 - 00:00:02 EDT