Re: [OPE-L] Marx on the 'maximum rate of profit'

From: Rakesh Bhandari (bhandari@BERKELEY.EDU)
Date: Sat Oct 14 2006 - 12:35:43 EDT

>--- Ian Wright <wrighti@ACM.ORG> wrote:
>>  Hi Ajit
>>  > I'm surprised that you are still not convinced
>>  after
>>  > our last exchange! ajit
>>  I wouldn't expect fundamental theoretical
>>  differences to get resolved
>>  after one or two debates. The history of the
>>  transformation problem is
>>  an extreme example.
>>  But nothing was resolved in our last exchange,
>>  although I thought it
>>  very useful. For example, I learnt that Sraffians
>>  seem to think that
>>  Sraffa's simultaneous equations give them some
>>  insight into dynamics
>>  via the device of an undistributed surplus (i.e. a
>>  specified nominal
>>  income distribution and an unspecified real income
>>  distribution).
>>  My logico-mathematical demonstration that the
>>  standard Sraffian labour
>>  value formula does not measure replacement costs for
>>  capitalist simple
>>  reproduction stands, and awaits a refutation. In
>>  this context,
>>  Sraffa's labour-values assume that capitalist
>>  consumption is zero
>>  during the period of replacement, i.e. production by
>>  means of
>>  commodities apart from the commodity money-capital.
>>  Your labour-value
>>  formula only measures replacement costs for simple
>>  commodity
>>  production. No wonder there are paradoxes when this
>>  approach is
>>  applied to capitalist production.
>>  All your theoretical difficulties with the logical
>>  possibility of
>>  labour theories of value derive from the classical
>>  problematic of
>>  divergence of prices of production from labour
>>  values due to
>>  profit-equalizing prices of production.
>>  What if this classical problematic is due to a
>>  mis-specification of
>>  labour conservation in the presence of
>>  money-capital?
>>  Best wishes,
>>  -Ian.
>Ian, I don't want to revive the debate. But my basic
>point is that you have created a system of subsistence
>economy--you are not the first one to confuse simple
>reproduction with the subsistence economy because
>subsistence economy is one example of simple
>reproduction. Your whole argument about money sector
>etc. is a mathematical smoke and mirrior, which is
>hiding this simple fact from you. The real test of
>your accounting principle would be its application in
>an expanding reproduction scheme. If your accounting
>system breaks down in this case then you will realise
>that my criticism was right all along. And again, if
>your accounting scheme breaks down in the case of
>expanding reproduction then it of course it couln't be
>Marx's accounting procedure as you cannot claim that
>Marx's accounting was designed only for simple
>reproduction of the capitalist system. So apply the
>test and see what happens. If your accounting passes
>this test, then you may have something!

The aggressive tone and the absence of self-reflexivity are on
display once again. The most extreme example I have yet encountered
of the the difficulty of maintaining cognitive flexibility in
adulthood. Ajit simply cannot see Marx outside any framework except
his own Sraffian one as shown in his astonishingly ignorant
propositions to the list.

Now on this issue.

Does Ajit's framework pass the tests he gives in a schoolmaster way to others?

Marx does not require that output unit prices equal input unit prices
to solve for prices or the profit rate. But the Sraffian system goes
no where without this stipulation.

So does Ajit even attempt to answer concerns that his own touted
formalism could not pass the test of handling not expanded
reproduction per se but expanded reproduction with on going technical
change in which (assuming a fixed value of money) output prices will
be systematically lower than input prices (and  Ricardo himself
asserted that prices were changing on a daily basis because of
technical change)?

No Ajit  says not a word about the concerns about the straighjacket
nature of his formalism voiced not only by  Alan Freeman but also
(decades later) by Mark Blaug?

Is Athar Hussain, et al who seems to have voiced this concern first a
fool as well?

Do they all understand as little as I putatively do?

But everyone of them has been called a fool by Ajit.

Does every Sraffian critic lack quality control? Quality has  simply
become synomous with agreeing with Ajit's Sraffa?


>Cheers, ajit
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