[OPE-L:410] Comments from Riccardo-1

Riccardo Bellofiore (bellofio@cisi.unito.it)
Sat, 4 Nov 1995 04:12:20 -0800

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It was asked to Mr K. what he was doing. He replied: I'm working hard
preparing my next error.

Bertolt Brecht

1. Introduction

This is my first intervention the list, so I hope I'm allowed to
present some general impressions and comments on the debate so far; along
with some points on specificic issues. If you wish, take it as a
brainstorm, and be ready to delete it as so on as possible. 30/10, so may
be it is not really up to date. Since I fear is too long, I split it into
three posts. I promise the following posts, if there will be any (i.e. if
what I write here seems useful to pursuing the debate to the other
participan ts) will be much shorter.

Note that I joined the list about a month ago. I started very
seriously (as Alan did) to read the posts from the beginning, i.e
including the posts preceding my inclusion. I had not realized that I was
one, and you were many. The more I read, the m ore I was back because new
posts were accumulating at a faster rate than my reading. So I changed my
mind, and started reading only the last week's post. Thus mine are
impression from a casual selection. BTW, I note that there is a great
disparity of inpu ts: few guys send big amounts of post (in any sense of
the word), others very few, others (may be the majority) are still silent.
There is something wrong in that, but please do not ask me to be more
precise on that, because I have not the ideas so clear on what are the
causes. The obvious consequence of this state of affair is to enlarge the
gulf, because the people who do not intervene stay out forever. If
understand well, this was also one of the preoccupations of the last
Alan's megapost, which I like d the most. But may be I'm wrong, and in any
case the quality of the debate on the list is consistently very high
(excluding the present one, of course).

Apologies for the English.

This intervention is offered in the spirit of the Brecht's quote.

2. Why Marx, and who are the 'political economists' of our time to criticize

Let me start from why I am interested in Marx - more than in
Marxism, or in Marxist political economy. I now give only the answer
pertaining to the theoretical level, not at the political level. I find in
his writings - especially the Grundrisse an d Capital vol. I - the only
analysis in which value theory is explicitly built from the start in terms
of a monetary analysis. Marx was interested to 'form': he criticizes
Ricardo for not having studied the form of labor, and the form of value.
When we ta lk of the form of value we are talking of money. His value
theory is, according to my perceptions, definitely not a theory of
equilibrium relative prices, but: a) a theory of how capitalist society
comes out on the market (theory of exchange); b) a theory
of the origin of profits in production (theory of exploitation); c) a theory of endogenous technical change (theory of relative surplus value); d) a systematic development of the contradictions among exchange value and use value (theory of crises). The i
nterconnections of these different dimensions of value theory was, I think, most clear in authors as Rosa Luxemburg and H. Grossmann.

In each step of the preceding, money is not merely important, it
is essential. The whole gives way to an analysis of the contradictory
nature of capitalist development which has at this heart the struggle over
labor time, and how the collusions or
divisions within the capitalist class are affecting it.

Let me look at the same thing from another point of view. I see in
Marx an author who is interested in exactly the three things that are now
bothering mainstream economic theory: (i) how to put money, in an
essential sense, in general economic equi librium; (ii) how economic
magnitudes comes to life, i.e. how (a tendency to) equilibrium may arise
and affirms itself from non-equilibrium (the stability issue); (iii) how
to endogenize innovations in the theory of growth.

Let us face it:

- these questions has been raised outside Marxism by heterodox bourgeouis
thought, many times, in a manner which cannot be dismissed: to make only
one examples, look at all the old models of monetary economies as sequence
economies in Wicksell, and the th eory of capitalist development in

- these questions now resurfaces in orthodox neoclassical theory;

- these old and new developments put elegantly aside the Marxian theory of
(surplus)value and class struggle

- 'they' are ahead of us, i.e. I don't think we can reformulate today a
Marxian political economy without taking into account non Marxian
theoretical developments.

Comrades, if we look at Marx's order of enquiry, as Alan
reconstructed it, it started with TSV. Then, Marx studied the politicla
economy of his time *before* starting to write (another) version of what
will become in due course Capital, vol. I. I t hink Michael L. is right,
we must take into account the Grundrisse, but that does not change much:
it was written in a great hurry *after* years of studying Smith and
Ricardo, Malthus and Sismondi, Tooke and Fullarton. Well, it is
understandable that we s tart with vol. I of Capital. But we should not
forget that an essential step for us is to criticize the political economy
of today. I found, in the fascinating (and to my mind very useful) last
two megapost by Alan the suggestion of Friedman. Well, I have
the ideas less clear: but 20 years ago I would have said Keynes,
Schumpeter and Sraffa; now I would refer, with less certainty, Hayek,
Hicks, Stiglitz, but, note, without cancelling the other three (since
their critique has not been already accomplished ). If we take into
accounts the interconnections, Walras, Wicksell, Mises, Arrow-Debreu,
Hahn, Pasinetti come into the picture. I understand one can be scared: but
what I'm sure is that one cannot think to do Marxian political economy
today without the di mension of 'critique', starting from Marx or Marxism
and going straight ahead to modern capitalism. We must accept the
challenge of *modern* (not Ricardo!) political economists in mind.

Some time ago, Alan suggested that the relevant split is among
general economic equilibrium theorists (including the neoricardian school)
and sequential economists. I replied that the first dividing line rather
is among 'real' analysis and 'monetar y' analysis, and that Alan's
division is reproduced within the two strands. So we have, say, real
sequential economists (Sraffa, Pasinetti), real general equilibrium
theorist (Walras, Arrow-Debreu, Wicksell), monetary equilibrium theorists
(Hayek, Mises; though I should better specify here the meaning of
equilibrium), monetary sequential theorists (Wicksell again, Schumpeter,
Keynes). Hicks and Stiglitz evolved in different corners in different
times. Marx, a sequential theorist, stayed with one foot in r eal analysis
and another in monetary analisys. I am one of those who thinks that this
is a problem, and that he must be put more strongly on the money side,
*without losing the labor the theory of value*. Is that possible? This is
my theoretical bet (for political reasons).

Is it possible, for our project, not to consider this matter of
what is modern political economy almost at the start, since it defines our
questions to Marx today, and then most of the answers we shall meet?

3. Some comments on value theory

From my part, I agree with Jim Devine (quoting Baumol) that prices
and values are related at the macrosocietal level, and with Duncan that
the transformation issue has to do with the Marxian law of the
conservation of living labor. But there is mor e than that: as Paul Z.
wrote, "the law of value is concerned fundamentally with determining the
basis of capitalist exploitation in the exploitation of labor power
resulting from the difference between labor time put in by workers and the
value of their labor power on the market".

Let me explore this topic a bit further. Marx's is not mainly,
then, a theory of relative prices but a theory of the origin of profit.
But not in the sense that from a *given* output of capitalist production
we go back and recognize under the surpl us product the surplus labor.
Rather in the sense that Marx *first of all* analyze the process of the
creation of surplus value. That is: the extraction of surplus labor from
the worker. This presupposes, as his critique of Ricardo in TSV makes
chrystal c lear, not to reason, as Sraffa, starting from a given
productive configuration, but analysising, at the beginning, the
lenghtening of the working day, or an higher intensity of work, or the
revolution in the means of production. This centrality of change in more
than half of vol. I of Capital is not outside the labor theory of value;
it IS labor theory of value *in action*.

4. Some comments on abstract labor

On abstract labor, I agree with most of what Paul B. has written.
To my mind there are two deductions of abstract labor in Marx, one from
exchange, the other from wage labor (i.e., from capitalist exchange).
According to the first one, abstract lab or is the labour of the
individuals directly represented as its opposite, social labor - concrete
useful and determinate labour which *becomes* social in as much as it is
turned in its opposite, abstract labor. According to the second one,
abstract labour
is *the* use-value which confronts money posited as capital, the *living* labor of the wage worker as against objectifed, dead labor.

This double deduction holds together if generalized commodity
exchange is nothing other than capitalist commodity exchange. And in fact,
for Marx, the commodity exchange becomes general only with capital - it
was Engels who invented the 'simple com modity production' case. In the
unpublished Chapter VI Marx wrote: "the highly developed exchange of
commodities and the form of the commodity as the universally necessary
social form of the product can only emerge as the consequence of
capitalist mode of
production production" (But read all the 949-950 pages of the Penguin transl.).

Sect. I must be read having this in mind. In fact the beginning of
Capital is: "The wealth of societis *in which the capitalist mode of
production prevails* appears as an immense collection of commodities; the
individual commodity appears as its e lementary form. Our investigation
*therefore* begins with the analysis of the commodity" (Penguin ed., p.

(1. continue)

Riccardo Bellofiore e-mail: bellofio@cisi.unito.it
Department of Economics Tel: (39) -35- 277505 (direct)
University of Bergamo (39) -35- 277501 (dept.)
Piazza Rosate, 2 (39) -11- 5819619 (home)
I-24129 Bergamo Fax: (39) -35- 249975