[OPE-L:785] More Digression

John R. Ernst (ernst@pipeline.com)
Sat, 13 Jan 1996 13:50:08 -0800

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By and large, I would agree with Duncan's last post.
Indeed, if there are differences, they are due
to the obscure nature of my own post to which he responds.
The basic point, which I should have made explicitly, is

Can we grasp Marx's notion of accumulation by using
equilibrium models in which inputs and outputs are
simultaneously priced and/or valued?

I think not. That which I am willing to toss overboard
disagrees. To be sure, I may be hasty in saying this.
In this context, we can look at the framework Duncan says
we have. That is, for me, the question is how does that
framework look in the context of what can be called
non-equilibrium models of accumulation. For much of it
we simply do not now know.

Let's be clear on something fairly basic. When I look at
empirical studies of, say, the movement of the rate of
profit over time, for me a rising rate of profit
partially confirms Marx's notion of accumulation,
given simultaneous pricing. I'd be shocked if someone
could prove him "right", once and for all, using such
pricing. Thus, we Marxists are looking at the world in
two very different ways.

Does this fundamental difference affect the way in which
we view, say, "the class distribution of produced value"?
I think so. The gross and net of amounts produced value
clearly depend upon the manner in which inputs and outputs
are valued. Here, again, there are basic differences.

Concerning those who wish to continue to operate in
the usual equilibrium context, I think the remarks of
John Roemer are worth considering:

Like many economists of my generation, I am strongly influenced by the
power of the equilibrium method: of examining a model when it is at
rest...in the sense that all the rules that describe how its parts work are

simultaneously fulfilled. What is disturbing about the equilibrium method
is that it pictures the typical position of the system as a position the
system rarely or never enjoys....There seems to be a deep contradiction
between using models whose main analytical trick is to postulate a position

that is precisely at variance with the most interesting and important
aspect of capitalist economy as described by Marxian theory--its incessant
contradictory motion. There is therefore the danger that...the equilibrium

method will prevent one from seeing the most important aspects of the
Marxian theory of capital. Knowing no other method, I use the equilibrium
method, with the vague thought that, when rereading these pages in twenty
years, its obsolescence as a modeling tool for Marxian theory may be clear.

(Quoted in Tom Mayer, 1994. Analytical Marxism. Sage: 304).

(Quote courtesy of Rakish Bhandari)