[OPE-L:749] LTV an assumption debate

Steve.Keen@unsw.EDU.AU (Steve.Keen@unsw.EDU.AU)
Sun, 17 Dec 1995 17:50:53 -0800

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This is a cursory initial posting on the "LTV an assumption" thread
which attempts to at least outline my perspective. I apologise for
the enormous holes I have left in justifying my argument, but the
time constraints on me at present are overwhelming. However I have
to say something or my contribution to the debate will lapse.

There are many threads running through this discussion on the
validity of the LTV. I will try to address them in turn as I put my
perspective--which is as critical of the LTV as Gil's though in a
quite different way. I'll cover just one component per posting,
because as I wrote this, it grew, predictably, like topsy.

(1) Equivalents and Exchange

The first thread I can see is the issue of the validity, in general,
of searching for an equivalent embodied in all commodities as an
explanation of exchange and exchange-value.

Gil has been making a good logical argument against this
perspective, as part of his critique of the LTV. I want to make a
logical and historical argument *for* it, but also as part of a
critique of the LTV.

Gil's argument amounts to a logical defence of the notion that we
cannot prove that something objective underlies exchange--and this
is something with which I agree, and I think Fred also agrees. There
have always been two distinct forks in value analysis in economics:
the subjective, which began in "modern times" with the Mercantilists
and is now embodied by the neoclassicals (and Austrians); the
objective, which began with the Churchmen (Aquinas et al) and is now
epitomised by Marxians, Post Keynesians and Sraffians.

Meek's _Studies..._ does a very good job of arguing that the
subjective perspective emanated from merchants who purchased
commodities in one social system and sold them in another, and that
the objective perspective began with those who observed production
and exchange in the one social system. The former explanation for
"value" is necessarily subjective, the latter sought some objective
basis for exchange, with the choice normally reducing to labor.

I don't believe that one approach can be proven to be logically
superior to the other a priori. You instead have to develop the
theory from its presuppositions, and (a) see how much explanatory
power it has, (b) see whether the perspective leads to logical
conundrums. As it happens, both approaches have had plenty of
failings in (b)--as well as sufficient success in (a) to enable most
adherents to refuse to alter their positions in the light of (b).

So overall, Gil is right--you can't prove just from the fact of
exchange that each thing being exchanged contains something
common--labor or anything else. But you can start with the
presumption that exchange *does* in fact embody the exchange of
equivalents, and see what analytic strength this perspective has.
This I think is Fred's position, and I agree with him on it.
However, this doesn't lead to me supporting the LTV. To explain why,
I have to consider the second strand in this debate--what were
Marx's logical presuppositions?

Steve Keen
PS Please don't wait for the next post if you want to comment on
this one!