Re: [OPE-L] What is most important in Marx's theory?

Date: Mon Mar 12 2007 - 05:41:19 EDT

---------------------------- Original Message ---------------------------
Subject: Re: [OPE-L] What is most important in Marx's theory?
From:    "Riccardo Bellofiore" <>
Date:    Mon, March 12, 2007 3:59 am

Very good p̣ost, Howard. Too complicated to
answer. I agree with a lot of things.

The point here, however, is simple. Marx proceeds
as if all latent value is always "realized",
after having explained in the first three
chapters that this cannot be assumed as a feature
of the way the world is. An interpretation which
works without taking into account this is not a
good interpretation, IMHO. All the first three
chapters appears odd.

Like you, I am against the reasomning with
assuumptions, stopping there. That is the thrust
of my insistence about grounging the LTV, so I
agree that the LTV is NOT an assumption, or a


At 21:37 -0500 11-03-2007, Howard Engelskirchen wrote:
>Hi Fred and Riccardo,
>I'm uncomfortable with all this talk of assumptions and relaxing
>assumptions.  Pretty much the first thing I learned about economics was the
>joke of the physicist, the chemist and the economist washed up on a desert
>island with nothing but a couple of cans of beans.  The physicist wanted to
>calculate how high to throw them so the cans would break right when they
>fell, the chemist wanted to calculate how hot to heat them.  The economist,
>pointing to the epistemological, not to say practical, uncertainties of
>those suggestions, proposed, much more elegantly, "Assume a can-opener."
>Marx would have sided with the physicist or chemist without doubt.
>Scientists, including Marx, propose, within the framework of the best
>available background theories, hypotheses that are evaluated by the
>contribution they make to explanation and induction and that are tested by
>practice, observation, and the inferences drawn from them.  The labor theory
>of value is no different.  It is not an assumption.  It gives expression to
>a theory grounded in a pretty much observable form of social labor from
>which exceedingly far reaching consequences can be derived.
>Certainly assumptions are made in science, and in Marx, but in the end
>theories proposing structures, properties and explanatory mechanisms ought
>to correspond to the way the world is, not to well conceived assumptions.
>Or so I think.  So I think Marx thought.
>Moreover, the search for the 'simplest determinations' in the Method of
>Political Economy is not a search for the simplest assumptions.
>Again, actual science is about causal explanation, not logical proof.
>Notice the reason for this -- logic (like making an assumption) is a
>conceptual exercise and has real world consequences only insofar as we use
>it to inform our causal engagement with the world.  But at that point we're
>evaluating causal mechanisms and practice, not proofs.
>I'm also uncomfortable with the suggestion that there are different
>interpretations of Marx that get evaluated the way we evaluate lawyers'
>arguments in court -- who made the best case, whose logic is the most
>consistent, etc.  No doubt I exaggerate.  I value Fred's attention to Marx's
>texts, but this is for the sake of getting the world right, not for the
>fidelity of interpretation.  There may be various reasonable interpretations
>of the texts which nonetheless do not ground, clarify, revise or develop the
>scientific foundation Marx established.
>Of course, I agree that with Marx just to understand the foundation he left
>is a matter of class struggle within each of us, within our collective work,
>and with capital.
>----- Original Message -----
>From: <ope-admin@RICARDO.ECN.WFU.EDU>
>Sent: Sunday, March 11, 2007 4:10 PM
>Subject: Re: [OPE-L] What is most important in Marx's theory?
>>  ---------------------------- Original Message
>>  Date: Sun, 11 Mar 2007 20:05:28 +0100
>>  From: Riccardo Bellofiore <>
>>  Subject: Re: [OPE-L] What is most important in Marx's theory?
>>  Hi Fred:
>>  We agree on these
>>  >I agree that capital could also be defined as "value in process", where
>  > >value alternatively assumes the forms of money and commodities.
>>  >>And I agree that the main question of Volume 1 is to explain how M-M'
>>  >>happens systematically, for the economy as a whole.
>>  >
>>  >I agree that "proves" is too strong a word.  I should have said that
>>  >Marx's theory deduces surplus-value as the result of surplus labor
>>  >(i.e. exploitation) on the basis of the assumption of the labor theory
>>  >of value.  Arguments can be given for the plausibility of the labor
>>  >theory of value, including your argument, but this is not a logical
>  > >proof.
>>  We disagree on this
>>  >
>>  >Instead, the validity of the labor theory of value and the surplus
>>  >labor theory of surplus-value should be evaluated on the basis of its
>>  >explanatory power (including the necessity of money, conflict over the
>>  >working day and over the intensity of labor, inherent technological
>>  >change, boom-bust cycles, etc.) (as Marx suggested in his famous letter
>>  >about the review of Capital in the Centralblatt).
>>  It seems that you think that Marx could have started just *assuming*
>>  that value exhibits only money, and then goes into the business of
>>  the explanatory power.
>>  Certainly this does not clarify why he revised several times the
>>  beginning of Capital, exactly to ground the LTV.
>>  >
>>  >I would say that Marx assumes in Volume 1 (and indeed throughout
>>  >Capital, as a general rule) that supply = demand, and therefore the
>>  >actual magnitude is the latent magnitude (as we have discussed many
>>  >times).
>>  I know, but that is clearly, as Marx says, a preliminary assumption.
>>  You must have an argument not to drop that assumption later on. If
>>  you drop it, the problem of latent-actual comes into the picture (as
>>  you know, I resolved it through the effective 'ordinary) demand and
>>  short-term expectations fulfilled). Anyhow, on this there is no
>>  final word in Marx.
>>  >
>>  >I argue (as you know) that the total surplus-value is indeed "fixed" in
>>  >Volume 1 and is then taken as given in Volume 3, which analyzes the
>>  >division of this predetermined total surplus-value into individual
>>  >parts.  I think there is tons of textual evidence to support this
>>  >interpretation, which I have presented in several papers.
>>  Yes. But because of the problem of necessary labor, how to interpret
>>  it, that evidence is inconclusive. It is inconclusive also because
>>  Marx never published his manuscripts. So it was work in progress.
>>  And I strongly resist to utilize a work in progress to reinterpret
>>  vol. I.
>>  >
>>  >Ajit says that "the whole world knows" that this is what Marx tried to
>>  >although he thinks that Marx failed in this attempt, because he "failed
>>  >to transform the inputs".
>>  I doubt Ajit implied that. What is known is that in vol. III the
>>  general rate of profi is in value terms, and then applied to the
>>  inputs, evaluated at simple prices. You rightly insist on
>>  simultaneous determination. But when you go there, as I told you
>>  several times, you are actually in the impossibility to have the
>>  rate of profit known before prices, unless you impose that. Any how,
>>  I repeat: one thing is to say that in vol. I we are talking of
>>  quantitative determinations. Another one is the amount.I don't see
>>  what is against Marx in saying that.
>>  >I agree that there is no "right interpretation" of Marx's theory, and
>>  >that different interpretations are possible and reasonable, on the
>>  >basis of the sometimes ambiguous textual evidence.
>>  Good.
>>  >
>>  >However, I would argue that my "macro-monetary" interpretation at least
>>  >belongs to the set of reasonable interpretations of Marx's theory (and
>>  >I would acknowledge that your interpretation of NLT, which is different
>>  >from mine, also belongs to this set).
>>  I agree that your interpretation is reasonable, but ...
>>  >
>>  >And I would argue that an advantage of my interpretation is that it
>>  >makes Marx's theory a logically consistent, without unsolved "logical
>>  >problems" that have to be dealt with.  Why not give Marx the "benefit
>>  >of the doubt", instead of insisting on an interpretation for which
>  > >there remains unsolved logical problems?
>>  That's where we disagree. You resolve the problems, IMHO, as a
>>  stipulation. Better: at first with a given MELT, in the end
>>  resorting to S = D, "gravitation", quantity theory of money. I doubt
>>  this can be attributed to Marx, in its entirety. But is a sensible
>>  development by Fred Moseley: anyhow, I do not think that a theory
>>  may be assessed on this ground. It si assessed studying it in how it
>>  is formulated (preferably in the original). That's why I would say
>  > that you are original thinker trying honestly to face an appproach
>>  which on some points is inconclusive (I didn't say: wrong).
>>  >>
>>  >>>riccardo
>>  >>>
>>  >>>PS: if I am wrong, why Marx in the several
>>  >>>editions of Vol. I didn't put a very simple
>>  >>>footnote saying the following: the exchange
>>  >>>ratios of the elements of constant capital and
>>  >>>variable capital are not
>>  >>>supposed to be transformed? Instead, he wrote in
>>  >>>the footnotes, more or less: the exchange ratios
>>  >>>assumed here are simple prices, i. e. not
>>  >>>immediately capitalist prices; this creates a
>>  >>>problem, to determine prices of production,
>>  >>>which I'll do in vol. III.
>>  >>
>>  >>But Marx does say something to this effect in a very important footnote
>>  >>at the end of Chapter 5 (a footnote to the famous "Hic Rhodus, hic
>>  >>salta" challenge).
>>  >>
>>  >>"[We should] formulate the problem of the formation of capital as
>>  >>follows:  How can we account for the origin of capital on the
>>  >>assumption that prices are regulated by the average price, i.e
>>  >>ultimately by the value of commodities?
>>  >>I say 'ultimately' because average prices do not directly coincide with
>>  >>the values of commodities, as Smith, Ricardo, and others believe."
>>  >>
>>  >>This is not entirely clear, but at least it suggests that average
>>  >>prices are not equal to values, but this does not affect the theory of
>>  >>surplus-value.
>>  It is exactly what I referred to. He coluld have said: look, my
>>  exchange ratios here there is no need to be transformed ... It seems
>>  to me that he says the opposite.
>>  >>
>>  >>
>>  >>Comradely,
>>  >>Fred
>>  comradely
>>  riccardo

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