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Well, triumph away. IF my critique of the labor theory of value was based
on this issue, then I'd be mortally wounded -:) and crawl off into a hole
But it ain't. I indulged in this debate with you in one post, but since it
is not the core of my critique, I won't bother dancing this dance any
longer. If you want to address the substantive aspects of my analysis of
Marx--which, in case you have forgotten, relate to the way Marx derives his
analysis of value from the concepts of use-value and exchange-value--then
please do so.
At 11:36 AM 7/23/00 -0400, you wrote:
>A reply to Steve Keen's OPE-L 3583.
>In OPE-L 3578, posted on Tuesday, July 11, 2000 8:28 AM, I demonstrated
>that there is no such thing as the physical surplus. There are physical
>surpluses of some items but physical deficits of others.
>STEVE HAS ADMITTED THAT I'M RIGHT ABOUT THIS. BUT IN AN ATTEMPT TO
>RESCUE PHYSICALISM (AKA "THE SURPLUS APPROACH"), HE USES A LOT OF FANCY
>WORDS THAT BOIL DOWN TO ONE POINT:
>YOU CAN ADD APPLES AND ORANGES.
>SORRY, STEVE, YOU'RE JUST WRONG:
>YOU **CANNOT** ADD APPLES AND ORANGES.
>Steve's admission that I'm right is contained in the following: "If you
>go for a 10,000 by 10,000 [input-output] matrix, then quite probably you
>will find lots of negative surplus entries."
>Then comes his attempted adding up of apples and oranges in order to
>evade the problem:
>"But generally, analysts work with 130 x 130 or less. At that level,
>while some products may be headed for extinction, others which are
>classed in the same category will be expanding. You are much less likely
>to get negative entries in that instance.
>"If you are working as a theoretician, and attempting to model economic
>dynamics, then you are likely working with 4 or less sectors. Then you
>are going to have all non-negative surpluses."
>Let me point out, incidentally, that the last point isn't true.
>*Aggregate* profit in the US in 1933 was negative. (But was there a
>physical deficit of **every** item?)
>But conceptually speaking, the real problem with what Steve has argues
>here is that one cannot aggregate sectors in PHYSICAL terms; one can't
>add apples and oranges. But that's precisely what his defense of
>physicalism requires. He is trying to rescue the claim that "the
>physical surplus" is a meaningful notion. The aggregation he proposes
>must therefore be carried out in PHYSICAL terms -- by adding up apples
>and oranges -- without recourse to any measure of *value*!!
>I-O accounts perform no such miracle. The I-O coefficients are
>constructed from *value* figures (specificially, money price figures).
>An I-O coefficient is the ratio of the MONETARY VALUE of inputs purchased
>from another sector (j) to the MONETARY VALUE of the gross output of this
>sector (k). There is no adding up of apples and oranges. There is
>therefore no construction of any meaningless "aggregate physical
>surplus." Everything is constructed on the basis of actual money prices.
>At different money prices the allegedly "physical" coefficients would be
>different. The allegedly "physical" surplus would be different -- though
>all physical quantities would be exactly the same. Go figure.
>Those whose theory is so thoroughly incoherent in its fundamentals
>shouldn't throw stones.
>Steve Keen also writes: "As for measuring the physical surplus, I would
>be quite content to measure it in terms of labor-time. I would of course
>not be content to pretend that the surplus was generated entirely by the
>This sounds good at first, but it just displays a lack of understanding
>of the problem. It is the own-rate problem that Keynes addressed in Ch.
>17 (?) of the _General Theory_. (Keynes' excellent discussion of the
>meaninglessness of physicalism -- net product, etc. -- in Ch. 4 (?) is
>also worth re-reading.) Except in very rare cases, different things
>(goods and services, labor, money) grow at different rates over time. To
>have any *aggregate* measure of growth, one of these things *must* "rule
>the roost." It is, in Marx's terminology, the value substance. The
>rate of growth of this substance is the aggregate rate of growth. Thus,
>except in peculiar cases -- cases in which everything grows at the same
>rate -- different value measures are not just different ways of
>expressing the same thing. They are not "neutral." They give different
>results concerning just how big the thing is, and indeed different
>results as to whether it is positive or negative.
Dr. Steve Keen
Economics & Finance
University of Western Sydney Macarthur
Building 11 Room 30,
Goldsmith Avenue, Campbelltown
PO Box 555 Campbelltown NSW 2560
firstname.lastname@example.org 61 2 4620-3016 Fax 61 2 4626-6683
Home 02 9558-8018 Mobile 0409 716 088
Home Page: http://bus.macarthur.uws.edu.au/steve-keen/
Workshop on Economic Dynamcs: http://bus.macarthur.uws.edu.au/WED
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