[OPE-L:6327] Re: Historical, real and current costs

Gerald Levy (glevy@pratt.edu)
Sat, 21 Mar 1998 10:43:42 -0500 (est)

Alejandro R wrote on Sat, 21 Mar:

> > > Note that, actually, "Andrew's example" is not Andrew's but it is
> > > in Marx's Capital II, Chapter 13:
> > That is not true. The widget example was Andrews example, not Marxs. For
> > instance, in the quote you cite from Vol. 2, Ch. 13, we did not have:
> > * a one-product economy.
> > * no constant capital.
> > * only one capitalist ("Mr. Moneybags").
> But Jerry, these are only simplyfing assumptions in order to make the
> numerical examples easier! Otherwise we should use multiproduct
> examples and the cumbersome and boring matrix algebra. The example
> Andrew is proposing can be ulteriorly complicated in the way you
> suggest, but we had only more numbers on the screen which are not
> really useful, I think.

Again we disagree. Yes, I know: the _reason_ the assumptions are made is
to simplify the math. But, at what cost?

For example, the assumption that c=0 in this context means that after
production time, there can be no flow of value from labor.

In other words, the assumptions themselves lead to misleading and
perverted results.

> Why would a multiperiod example change the issues in discussion?

I'm not sure it would since the issue being discussed concerns what
happens (and can happen) _within_ a period.

> Additionally, "corn models" are not Andrew''s. For example, Duncan
> use a "corn model" to explain his reading of the falling rate or
> profit in his book Understanding Capital (I recently received a copy!)
> Duncan says on p. 131: "A numerical example of this process may help
> to explain it. Suppose, for simplicity, that we are in the corn
> economy of Ricardo; hence there will be only one produced commodity
> and prices will be proportional to labor values."

But, Duncan clearly indicates above that the corn model is Ricardian in
origin. No claim is made that Marx adopted a corn model.

> I ask: Do your complaints about "Andrew''s corn model" apply also to
> Duncan''s examples?

Please ... Alejandro. Andrew does not adopt "models". He uses "examples"
and/or "illustrations".

> I don''t remember --maybe I wasn''t in the list--
> that you have suggested this issue to Duncan to be discussed. I have
> the impression (maybe wrong) that you seem to believe that the only
> person in the world using "corn models" is Andrew [...]


> Do you think that such a
> kind of results are also present in Duncan''s work.

Your question is too vaguely worded. I.e. I don't know which of Duncan's
(many) works you are referring to.

(... however, it may indeed be that Duncan and I have disagreements on
this matter. E.g. I think that Duncan tends to believe that there is less
of an analytical/philosophical gap between classical political
economists and Marx than I accept. I.e. I think he sometimes sees Marx
as a continuation of the classical tradition, whereas I think that Marx
surpassed that tradition. In other words, I think that Marx's "paradigm"
was fundamentally different from the classical "paradigm". Sometimes I
think that Duncan believes that they were operating within the same
general paradigm. But I don't want to misrepresent Duncan here so we can
talk about this issue if Duncan wants to).

> All this is something funny for me because, almost one year ago,
> Duncan kindly read my paper on the Okishio Theorem. His FIRST COMMENT
> was that I should use a "corn model" and avoid the cumbersome matrix
> algebra!

If one were to adopt (temporarily) a "corn model" to develop an internal
critique of Ricardo or Okishio then that would be a different matter from
adopting a "corn model" which claims to be an interpretation of Marx
and/or a statement about capitalist reality.

Andrew and I discussed this issue in some depth re the Okishio Theorem
and, as I can recall, we reached agreement that it was legitimate to make
the same assumptions that Okishio made in the presentation of a critique
of Okishio.

Where we differed was our accessment of what assumptions are legitimate
within an interpretation of specific issues in Marx. For instance, in the
context of an interpretation of Marx I objected to the v=0 assumption. In
response, Andrew offered various logical reasons for adopting that
assumption and offered some passages from Marx suggesting that he had
adopted that assumption. I took issue with Andrew's interpretation of the
passages from Marx wherein he claimed that Marx adopted the v=0 assumption
and I, additionally and more importantly, claimed that the v=0 assumption
was at odds with Marx's theory. For those who were around at the time, you
will probably recall that this exchange went on for a long time!

> You are of course right, but you are forgetting a quotation:
> Marx also says, *conclusively*:
> "In all these cases therefore the production time of the advanced
> capital consists of two peridos: one period during which the capital
> is engaged in the labour process and a second period during which its
> form of existence -- that of an unfinished product -- IS ABANDONED TO
> LABOUR PROCESS." (p. 239)
> Note that Marx says *without being at that time in the labour
> process", i.e. there is not labour expended at that time. The
> commodity, during this time, is "abandoned to the sway of natural
> processes".

It's not as "conclusive" as you might think. *Even if* there is no living
labour expended in the drying process, there *is* constant capital (or, at
least, it has not been explicitly excluded by assumption).

> Andrew is simply talking about this period of time in which the
> commodity is "abandoned to the influence of naturale processes" and
> therefore there is no new living labor being spent. You raised the
> point that during this period, "in Andrew''s example", the Sun would
> create value. But this period also exists in Marx''s example. My
> question: Do you see also the "perverse results" in Marx''s
> examples, in which certainly we have this period of time?

See above comment.

[stuff deleted]

> No, I don''t, but I think the "corn models" are useful to stress some
> important aspect. I certainly don''t think that the authors who use
> them (like Duncan and Andrew) think that they are "modelling
> capitalism" in every aspect.

I'm sure that's true, *but* Andrew claimed just the other day that
"examples" like his were better at explaining "real" situations than the
adoption of models. Thus, he has been claiming, in part, that these
examples can be used to interpret reality (or some aspect of it) rather
than just interpreting Marx or someone else.

I'll get back to you -- probably -- on your new numerical example.

In solidarity, Jerry