[OPE-L:736] exchange of equals

Fred Moseley (fmoseley@laneta.apc.org)
Thu, 14 Dec 1995 11:02:50 -0800

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Thanks to Chai-on, Steve, Gil, Michael P, Paul Z. John E., etc. for various
responses to my recent posts. Sorry for the delay in my responses, but I
have had in-laws visiting and had to prepare my weekly seminar at UNAM (in
Spanish - a lot of work given my limited Spanish). And more family arrives
tomorrow (Mexico is a favorite place to visit in December), but at least the
classes are over, so I will try to respond in the next few days. I will
start with Gil's, since the issues he raised seem to be the hottest right
now. I will break the response into two posts - exchange of equals and
price of land - to facilitate further discussion.


1. My understanding of Gil's distinction between equivalence and equality
is that equality requires commensurability and equivalence does not. This
seems to be the main difference for our purposes. Gil, please correct me if
I am wrong.

2. Gil argues further that Marx assumed in Section 1 that commodities are
equivalents, in the sense that they are all exchanged against e.g. wheat,
but that Marx did not assume or establish that commodities are equals, in
the sense of requiring commensurability.

3. To begin with, I think that when Marx said the exchange of equivalents,
he meant the exchange of equals, in the sense of commensurability. The
question remains whether Marx was justified in considering exchange as the
exchange of equals, but this is what Marx meant when he said the exchange of
(and also what I meant when I stated Marx's second methodological
presupposition was the exchange of equivalents).

4. Now to the question of whether Marx was justified in considering
exchange as the exchange of equals: One could respond by arguing that Marx
simply ASSUMED that the exchange of commodities is essentially the exchange
of equals. Gil would say that this is assuming what should be proved, but
it could be argued that this is a fundamental methodological presupposition,
which cannot be "proved", and that the best way to test the validity of this
presupposition - relative to the opposite presupposition of the exchange of
non-equivalents (it has to be one or the other, doesn't it?) - is to compare
the relative explanatory of the theories based on these two alternative

4. But I think a stronger argument can be made for Marx's assumption of the
exchange of equals. Marx's assumption of the exchange of equals follows
from his first methodological presupposition that capitalism should be
analyzed in terms of its objective characteristics. If exchange is viewed
as an objective process, i.e. as a SYSTEM of MUTUALLY CONSISTENT exchanges,
rather than as an individual act of exchange from the perspective of
individual exchangers and disconnected from all other exchanges, then it
follows that exhange must be an exchange of equals (mutual consistency or
transitivity requires equality).

But even this argument does not "prove" that exchange must be viewed as an
exchange of equals.. The exchange of equals follows only from the objective
method. One can still adopt the subjective method of individual choices and
view exchange as an exchange of non-equals. But, similarly, one could not
"prove" that exchange has to be viewed as an exchange of non-equals. So we
would come back again to the relative explanatory power of these two methods
as the best test of their relative validity.

5. A note on the history of economics: the classical economists, especially
the Physiocrats, also assumed that exchange is the exchange of equals, in
the sense of requiring commensurability. Menger railed against the
classical economists (in an Appendix to his Principles of Political Economy)
for making this assumption, and based his neo-classical theory on the
opposition assumption of the exchange of non-equivalents. (By the way,
Menger also used "equivalence" to mean the same thing as "equal"). As Gil
noted, Bohm-Bawerk made the same argument against Marx, but B-B's argument,
like Menger's, assumes the subjective method.

Fred Moseley