[OPE-L:2213] Reply to Duncan (Profit Rate, Science)

akliman@acl.nyit.edu (akliman@acl.nyit.edu)
Tue, 14 May 1996 13:35:55 -0700

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This is to reply to Duncan's interesting posts ope-l 2165 and 2171

My work on Marx's value theory, while it does, I think, have other
implications, is first and foremost work in the history of economic
thought. (Behind all of the anti-"religious" venom coming from Glasgow
and North Carolina is simple disrespect for the history of economic
thought and of standards of "verification" appropriate to it.) This
is not because my interests are what are called "antiquarian," but
because THE key topic of discussion of Marx's work among economists has
centered on his "logical inconsistencies" for exactly one century.

If there is something new to be said in this area--which has attracted
such luminaries as Boehm-Bawerk, Samuelson, and Baumol, among others, from
the camp of mainstream economics--then surely it should be important *in
its own right*?

THIS is how I ask that my existing work on Marx's value theory be
judged, because this is its central purpose. I try, and increasingly
try harder, to make clear the criteria upon which is should be judged.
Have I refuted the refutation of Marx's logic? If so, the historical
record demands correction. If not, where is the logical error in my
reasoning, and/or where is the proof (not just divergent interpretation)
of the lack of conformity of my interpretation to the original text?
If neither is found, the historical record demands correction.

This is the MAIN thing I hope to accomplish by a dialog with (Marxist
and non-Marxist) economists: correction of the historical record. Thus
far, there has been little success, but a soon-to-be-published encyclo-
pedia entry (written by a non-Marxist) does suggest that Ted and I have
disposed of the Bortkiewiczian objection to Marx's transformation.

I most strongly believe that anyone interested in truth should demand
correction of the historical record here, whether or not they agree
with my interpretation, whether or not they call themselves Marxists.
And I most strongly believe that anyone with some power to change things
should exercise it in the name of truth. Get the Roemers of the world
to stop saying that Marx was "simply wrong" (this is a direct quote
referring to the FRP and value theory), get the Howard and Kings to
stop saying defense of Marx's law of the FRP as he articulated it is
intellectually indefensible, get the Steedmans and Blaugs to eat their

I think this counterassault is extremely important politically, because
I think truth is very important politically. But I think any truth-
seeker, even those who disagree with my interpretation of Marx, should
demand a correction of the historical record, unless error in my
reasoning or lack of comformity with the text can be *demonstrated.* And
this applies also to simultaneous single-system interpretations of Marx,
which have in different ways also opened up different, potentially
valid, interpretations of Marx's value theory (though see below).

THIS is what I ask of anyone knowledgeable about the issues, Marxist
or non-Marxist. I ask the same thing from Shaikh, Skillman, Blaug,
Steedman, Cotrell, Samuelson, etc. I do not ask anyone to agree with
my interpretation or to prove it wrong; that is ludicrous. I do not
even ask anyone to agree with it--what good would that do? I put it
out there, answer questions, defend it, develop it, but I don't ask
anyone to "accept" it in this sense.

Once one takes what I am saying seriously--and I am very serious about
it--then the reasons for my frustration may make more sense. Instead
of dealing with my work as a response to a key century-long debate, and
wrt Bortkiewicz a definitive response, the work is ignored, then treated
dismissively on the basis of (very quick) misreadings ("iterative
solution to the transformation problem"), or the current favorite--
"it doesn't make a very good cup of espresso" (e.g., you don't show
profit rate dynamics, you don't do this, you don't do that). Right;
it isn't an espresso machine.

In other words, the responses are, to a large extent, off the point and
diversionary. I don't mind discussing other points, but when one judges
my work, I ask that it be judged in a manner appropriate to its

To try to stop the diversionism, but mostly because it is the only
adequate way to deal with the issues, in my view, I also ask that issues
of interpretation and issues of empirical relevance, strength as theory,
etc. be kept distinct. I certainly don't want to say that because my
work vindicates Marx's logical coherence, it therefore shows he was
"right" about theoretical issues. Contrary to the slander coming from
the Glasgow-NC axis, I am perfectly willing to engage in discussions
of the theoretical adequacy of (my interpetation of) Marx's value theory.
But whether Marx was right or wrong, whether TSS is good theory (for
WHOM, for WHAT?) and whether my interpretation sucessfully defends Marx
against the logical incoherence critique are entirely separate issues,
and I simply do not accept a discussion of the merits and demerits of
the TSS interpretation as a SUBSTITUTE for a clear answer to whether
the historical record should be corrected--especially when the merits
and demerits are defined relative to some alien criterion (I think Alan
wrote profoundly and eloquently about this the other day, when exposing
the arbitrariness of the concept of "science" championed by some of
its self-styled defenders.)

There's another issue wrt interpretation. Just because my interpretation
refutes the claims of logical incoherence doesn't necessarily mean it is
the best interpretation, or that other interpretations aren't possible.
So for those who do have an interest in the history of thought, at least
wrt Marx, the question is what are the criteria by which to judge which
interpretation is superior *as interpretation*? I have made the following
claim: assuming the work of theorist X hasn't been shown to be self-
contradictory, then different interpretations should be judged by how well
it is able to make sense of the theorist's work as a whole (concepts and
theoretical conclusions), which includes, but is not limited to, its
conformity with the text.

Some folks, mainly TSSers, have expressed agreement with this. Gil
Skillman disagrees, for reasons that are unclear to me, and has suggested
an alternative set of criteria (which I think confuse issues of interpretive
adequacy and theory construction). But there hasn't been hardly enough
discussion about these issues, I think. Instead, what we find are
people rejecting the *interpretation* because they don't think it makes
for good *theory* (that's the most generous interpretation I can give).
In general, I think, people aren't getting what's at issue. One can
simply not treat interpretations as a matter of taste--no thanks, I
don't drink. There are empirical standards involved. This has been
less than adequately appreciated.

Duncan writes: "I think what gradually establishes a new interpretation
in a science is the demonstration of its effectiveness in fostering new
lines of research and clarifying confusions." I hope he is right, but
I have my doubts. Kuhn notes that it took 100 years for Copernicanism
to emerge victorious over Ptolemyism. The old guard never accepted
Copernicus's theory. I've recently been told that Keynes said something
much the same: the way a new theory wins is that the old guard dies.
So I don't have much hope that I will succeed in convincing those who
have their minds made up, those who have 25 years sunk into trying to
solve the problem of how "values," which "determine" prices, do so although
they are quantitatively redundant, those who have an ideological interest
of one sort or another (this includes Marxists) in Marx being logically
inconsistent. One reason for this is very deep. Kuhn notes that the
opponents of Copernicus really weren't "wrong." In a quite literal
sense, what Copernicus was arguing was impossible, from their perspective.
Part of the very *meaning* of "earth," in their theory, was that the
earth is *stationary*. (Replace "earth" with "values and prices of
production" and what do you have?!)

Moreover, I don't think economics is really a science. I especially
don't think different theories win out in economics due to their
superior ability to predict and explain. And I especially do not think
disinterested science is at the root of the century-long critiques of
Marx for "internal inconsistency." THis becoes so clear when every
critique crumbles almost immediately when you stomp on it a bit. Rather,
of course, what is at root is an ideological attack on Marx, a way of
snidely avoiding having to confront his thought head-on, an attempt to
bury his legacy and, often (among "sympathetic" critics), an attempt to
cut an intellectual giant down to one's own size so that one can breathe
easily as "independent."

Realizing that this is going on quite long, I'll save a discussion of some
of the issues Duncan raised about the FRP to another post. In general,
I agree with much of what he says, about the nature of the TSS refutation
of the Okishio theorem. But one thing I do want to address here is the
aspect of the Okishio theorem that is clearly NOT disinterested science--
the claims made very clearly, boldly, and explicitly by both Okishio and
Roemer that they are REFUTING Marx's law of the FRP. Were this aspect
not to be there, or even not so prominent, I would agree that we were
then just to be engaged in a discussion of the reletive fruitfulness
of different "models"--this one holds the real wage fixed, looks at
one-shot tech. change; this one lets the real wage rise; this one looks
at continuous tech. change and explicitly deals with the realized rate
on capital advanced, etc.

But this is not the case. Okishio doesn't believe his own "model."
Roemer most certainly doesn't belive his own "model"--he says repeatedly
and explicitly that the real wage does in fact not remain constant.
So what is all the fuss about? The constancy of the real wage is adopted
in order to isolate the effect of mechanization ITSELF on the profit rate,
in order to "prove" wrong Marx's contention that the profit rate can fall
due to mechanization itself. They are not trying to model reality. They
are trying to refute Marx. They are dealing with the history of economic
thought. According to Glasgow-NC-think, they are not being scientific!

All I ask for is the same right, and that my work be treated with equal
seriousness. I ask, therefore, that it be treated as a defense of the
logical coherence of Marx's law, just as they meant their work as a
refutation of its logic, not a model of reality.

By this criterion, I think all the TSS refutations are resounding
successes. Yes, Okishio/Roemer deal with one-shot tech. change, and we
do not--but their alleged theorem does NOT preclude continuous tech.
cursory reading of Marx's formulation of the law in the opening pages of
Ch. 13, Vol. III of _Capital_, discloses that the law is stated precisely
for continuous technical change.

Had Okishio merely said, "i have here an interesting model which shows
that one-shot tech. change, given a constant real wage, adopted by
profit maximizers, cannot lead to a fall in a stationary price, uniform
profit rate," I would have absolutely no beef with him. Yes, a (mildly)
interesting model. But then, I wouldn't need to deal with him, because
no one would have paid the slightest attention. He and Roemer are
big names for supposedly bringing down a giant.

Actually, their "theorem" is very sloopy and slipshod. The math doesn't
say what they say it says. I showed this about a month or so ago on
ope-l (and no one has challenged my reasonning/evidence).

What's my point? Simply that it is not the intellectual quality or
analytical rigor of this work that has made it famous, but the fact that
it seems like it can bring down Marx.

A double standard is at work. Some folks attack Marx, and their work is
considered serious science. Other folks defend Marx and the neo-Tuckerites
come out of the woodwork screaming about religiousity.

So this is my only problem with what Jerry wrote the other day: Theory is
the continuation of the class struggle by other means. And there's an
objectivity to theory, independent of the intentions of the thinker.
One can be all "for" the right things, but that is by no means sufficient
to "root the capitalist out" of one's head. Just because "we're all
Marxists," doesn't mean we can take for granted that no class divides
are at stake on ope-l. This is not to accuse any individual; far from
it; it is a continuous, hard, struggle to root bourgeous ideology out of
all of our thinking. The point is that we have to be aware that this is
at stake. Theory is not just some sort of intellectual game, IMHO.

I owe lots of people responses to lots of serious posts. Seeing what's
come in from the list today, I'm begining to despair that I will ever
catch up. The more serious the post, the harder it is to reply,
because the greater is the thought and time needed. ... And you see how
much I've got to write until I think I've worked through the issue with
sufficient clarity. But I'll try.

One more thing. I want to stress again that I'm all for debating the
theoretical adequacy of different value theories, etc. The problem
is that different theories have different criteria for adequacy, and
that I refuse to accept others' criteria in evaluating theories I
adhere to, just as otthers' refuse to accept my criteria. So there
needs to be a way for theoretical opponents to speak to one another.
I don't think this has been worked out on ope-l, or anywhere in the
circles in which I travel. People tend to view "choice" of theory
as a matter of taste, lacking standards. This is one main reason
why I try to focus my interventions/discussions on well-defined,
clearly answerable issues (e.g., does this refute the Okishio theorem,
yes or no?), because I know others do NOT share my concerns, way of
thinking, theory, criteria of evaluation, etc., but I still want to
speak to them. I know they won't find much, or all, of what I have
to say "appealing" (to use the vogue word), and I'm not trying to
appeal to them. So I have to do so in a way that doesn't require that
they *like* what I say in order for them to acknowledge its validity.

Of course, many try not to play by these "rules." But in the process,
the impartial observor can figure out what's going on.

Andrew Kliman