[OPE-L:2413] Re: assumptions, assumptions, assumptions

glevy@acnet.pratt.edu (glevy@acnet.pratt.edu)
Wed, 29 May 1996 19:11:37 -0700

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I think that Andrew's [OPE-L:2411] cleared up a number of misgivings that
I had related to the assumptions made in his model re the Okishio Theorem
and the IRR. A few comments, though:

(1) I would certainly agree with Andrew's defense of abstraction and his
comment that "introducing all sorts of 'realistic' features on top of the
stark inner dialectical antagonism of capital and labor just serves to
obscure and confuse everything. Deeper comprehension requires deeper
abstraction." Yet, I hope he would agree with me when I say that theorists
have to be very careful that the assumptions they select are appropriate
for the issues studied and the "level of abstraction." I would suggest
further that the particular selection of assumptions frequently obscures
everything by assuming away the most important variables in question (as
is the case with general equilibrium theory).

(2) Andrew's clarification of what he meant by NDFC (non-depreciating
fixed capital) was helpful since he now states explicitly that even in
this context there is moral depreciation. This was certainly not apparent
to me previously.

(3) Taking the above into account and assuming v=0 (i.e. workers live on
air), we get r = s/NDFC. This formula for the r and the IRR rests
critically on the assumption of v=0. Is it a legitimate assumption for
Andrew to make given the purpose of his model? I would suggest that it is
*if and only if* the conclusions of the model can be reproduced when
this assumption is dropped (i.e. when v>0).

(4) After challenging Andrew in a previous post whether Marx made the
assumption that "workers live on air" (i.e. v=0), Andrew in [OPE-L:2307],
reproduced a couple of quotes from V3. My reading of those quotes does not
support Andrew's reading that Marx was assuming provisionally that v=0. I
won't argue the point, though, since I believe it to be an entirely
secondary issue.

(5) Regarding Andrew's interpretation of the reproduction schema, I agree
with much of what he wrote regarding Luxemburg, although, I would like to
see the point he made about Smith and "trickle-down" theory discussed some
more at some point. As so many of the debates historically among Marxist
economists have centered around the interpretation of the reproduction
schemes, we would certainly be well served to discuss this topic more
explicitly at some point so that we do not repeat the mistakes of those
who went before us.

In OPE-L Solidarity,