[OPE-L:73] [OPE-L:309] Re: Negative Value Added and the MELT

Andrew Kliman (Andrew_Kliman@email.msn.com)
Fri, 6 Nov 1998 21:29:40 -0500

A reply to OPE-L 296.

I'll get to the technicalities below, but first let me point out
once more the fundamental flaw in (and the overall irrelevance
of) Ajit's line of argument. As I've shown, simultaneous
valuation implies that surplus-labor isn't necessary and
sufficient for profit to exist. Moreover, no one disputes this.
Simultaneist interpretations of Marx's value theory are therefore
incompatible with his theory of the origin of profit. A choice
must be made.

In order to try to evade this choice, Ajit is trying to impose
extraneous conditions (first, equal profit rates, and now, no
negative net products). By employing such strategems, one can
certainly ensure that profit is positive if surplus-labor is
positive, and vice-versa. But, as I've noted already, this
simply does NOT imply that surplus-labor is necessary and
sufficient for positive profit. Rather, surplus-labor TOGETHER
WITH the extraneous conditions are necessary and sufficient for

That's something very different. That someone is an adult is
neither a necessary condition nor a sufficient condition for that
person to be female. If, however, I impose the extraneous
condition that the person is also a woman, then this condition
TOGETHER WITH the person's adult-ness is both necessary and
sufficient for the person to be female.

In any case, I'm happy to see that he has abandoned his objection
to my use of market prices to test the implications of theorems
that deal with profits under market prices.

Now to the technicalities. Ajit writes:

"First of all, in the example you give below, the production
price ratio of
the two commodities is not 1:1 as you suggest, but it is: the
price of
bread in terms of wheat is equal to 1.00009."

No, this is wrong. I suggest that Ajit re-check his figures.

"In both the examples, that is the example in this post as well
as the
earlier one, your given systems are irreproducible, and that's
the source
of your results."

If "irreproducible" means that a negative net product of some
good is produced, this is correct. That is indeed the source of
my results.

If, however, "irreproducible" means that an economy could not
reproduce itself in the long run if it had the technical
coefficients implicit in the example, the statement is false.

"For example, in your earlier example, the system needs 104
units of wheat for simple reproduction but produces only 101
units of
wheat. The system cannot go on reproducing itself. Similarly, in
current example your system needs 20,000 units of wheat as input
produces only 10001 units of wheat (I have scaled down your first
by 100 to make it clear--in your original example it will take a
bit longer
time for the wheat sector to wind down to nothing)."

Again, this is false. Simple or expanded reproduction on the
basis of the technical coefficients implicit in the example is
quite possible.

I have already posted an example in which some net product is
negative in each and every period, yet expanded reproduction
occurs indefinitely. Although surplus-labor is always positive
in the example, "profit" as defined by simultaneism is negative
in each period. Moreover, the percentage deviation of prices
from production prices is always very small.

"Nobody works out properties of an economic system which is
structurally irreproducible."

Well, again it depends on what is meant by "irreproducible." The
economy of my example is perfectly capable of reproduction in the
long run. Some net products are negative, but I would hope that
people would find it important to work out the properties of such
economic systems, because ALL (actual) economic systems produce
some negative net products.

And even were Ajit right that reproduction requires all-positive
net products, this would still be an evasion of the question at
hand -- the necessity and sufficiency of surplus-labor for
positive profit. Again, if "reproducibility" must be smuggled
in, in order for positive profit and positive surplus-labor to
coincide, then surplus-labor itself isn't necessary or sufficient
for positive profit. In contrast, the TSS interpretation of
Marx's value theory implies that -- under completely general
conditions, no strings attached -- surplus-labor is indeed
necessary and sufficient for (real) profit to be positive.

Your choice.

Andrew ("Drewk") Kliman Home:
Dept. of Social Sciences 60 W. 76th St., #4E
Pace University New York, NY 10023
Pleasantville, NY 10570
(914) 773-3951 Andrew_Kliman@msn.com

"... the *practice* of philosophy is itself *theoretical.* It is
the *critique* that measures the individual existence by the
essence, the particular reality by the Idea." -- K.M.