[OPE-L] Sraffian surplus vs Marxian surplus

From: Jurriaan Bendien (adsl675281@TISCALI.NL)
Date: Wed Jun 28 2006 - 14:06:19 EDT

Hi Anders,

I am basically in agreement with the case you make. However, I've noticed
the more rigorous literature which explores the concepts of surplus you
might possibly devise in detail is very small. On and off I have been
thinking about one of my books I still have to write sometime, which is
about "surplus and scarcity" (I do not have much opportunity to write
systematically yet, though, I mean, I have to earn a crust and lack an
academic position of a type that might enable me to write and research). The
idea is that you need both these concepts for a viable economics, and that
you really have to look at what these concepts mean and how they are used,
pierce through the ideological veil, as it were. Once we no longer cast
things in terms of a fight between Marx, Sraffa and the neoclassicals, I
think we can take a broader perspective and reach some kind of new
synthesis, forgetting about the trivia of the debates. I don't dismiss
Sraffa's idea entirely, to the extent that he makes very clear that some
neoclassical concepts are illogical and unsound, and to the extent he does
try to provide an alternative. Just because a thinker has not solved a
problem, does not necessarily mean his idea is a waste of time, at least
s/he recognised there is a problem, and traced out some of the implications.

You asked:

why it is interesting to look for "a
reference to a specific analytical discussion of
Sraffian vs Marxian concepts of surplus" - as
long as there is no explicit formulation of
Marxian surplus in a dynamic framework?

Well I don't know if there is somebody who has attempted such a formulation.
To some extent at least, the TSS framework is dynamic. However my own
understanding is that a lot of the discussion on these topics is flawed,
because of an inadequate specification of the basic concepts involved and
their use, including value, price, input/output, surplus and so on. People
are in a rush to compute something based on loosely defined concepts. There
is also very little sense of an understanding of how markets actually
function in the real world, or their historical evolution.

I worked for some years as research statistician at one point, which is to
say, you work on the problems of what exactly has to be measured and how to
measure it, if you like, categorisation and conceptual problems. Measurement
isn't everything perhaps, but the discipline of measurement is that you are
forced to get very precise conceptually about what exactly you try to
measure, and why - even if it turns out that you cannot actually measure
something directly, then at least you know the meaning of what is involved
and the logical implications. And that's useful.

If you look at the state of modern economics globally, I think you will find
that it is a shambles, insofar as most of the foundational principles have
been proved by scholars to be shaky or false, or applicable only under
counterfactual conditions. The "economics" that is taught with great
certitude is either more in the nature of an ideology about the benefits of
markets, or else a technically specific study of particular markets.
Basically, you have a lot of "little theories" and ad hoc theorems which are
more or less eclectically combined, and invoked as appropriate.

The effect is that economics lacks much explanatory or predictive power, if
anything it is more a description of what happens, with a greater or lesser
degree of mathematical sophistication and accuracy. Andre Gunder Frank once
joked that astrologers were better at predicting the future than economists,
a rather disconcerting finding. Presumably if economics is a science, it has
to have genuine explanatory and predictive power. Put simply, I think that
economics mostly lacks the *concepts* which can describe and explain the
real world, yet paradoxically - and tragically - more and more social
problems are framed as economic problems. It's tragic, because given the
crisis of economics itself to which I refer, it is unable to solve those
problems obviously.

In the real world, what governments have, is a basic macroeconomic model of
their country's economy, i.e. a series of observed variables to which they
fit equations of a probabilistic type, and then they know that if certain
variables move in a certain direction, this will most probably have
such-and-such economic effects which you can estimate. It takes maybe a few
dozen economists to operate it, all the rest can ideologise all they like.
It is a largely pragmatic exercise, strongly empirically oriented, and most
of the references to "equilibrium" in it are rhetorical flourishes. What
they mean is that if you have an imbalance here, you get an imbalance there,
and if you have a balance here, you get a balance there, but at any time
there are really both balances and imbalances.

My own contribution to the discussion of equilibrium is to say that economic
equilibrium or balance is ultimately not constituted by "the market in
general" (the "price mechanism"), but by purely social factors. I think that
if historical materialism means anything, that's exactly what it says. It's
a question of property rights and their enforcement, of relations of
production and distribution, of the "dull compulsion of economic relations"
as Marx puts it. Markets in reality involve both freedom and coercion, but
in ideology and rhetoric, usually one of the terms is emphasised over the

Economists who work on real economic problems and not just academic ones
however don't waste much time on discussions about "equilibrium" - they are
concerned with price stability and social stability, and they know that if
you don't have the one, you don't have the other either. Price stability
means a low level of price inflation and absence of wild price fluctuations,
and social stability means that people don't revolt because they can't meet
their needs. Even so, you can have basic price stability combined with
considerable price fluctuations, and even if you have price stability,
people may still revolt, in part because they have needs which cannot be met
through markets. So really these terms themselves don't explain much either.

What is specific to socialist economics is the idea that markets are only
one way of allocating resources, not the only one, and not necessarily the
most efficient or desirable one. Bourgeois private property rights are not
the only kind of property rights conceivable. Goods and services can be
produced in all kinds of ways, and the options chosen more often than not
owe their implementation to the prevailing power relations.

The conclusion I reached was basically that we need some kind of new
synthesis, but I think that synthesis will probably develop out of the
social conflicts that occur. Possibly it is too big a project for any one
thinker. If e.g. you look at the events around May '68, they generated an
enormous amount of new concepts, new ideas, which influenced a whole
generation. And I think that will happen again some time in some form or



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