Re: [OPE-L] Lange's vindication

From: Jerry Levy (Gerald_A_Levy@MSN.COM)
Date: Sun Apr 22 2007 - 08:26:43 EDT

>>> By vindication I mean to argue in favour of the truth, justice or validity of something that has been subject to discussion. Lange vindicates the subjective theory of value as a devise to explain the every day exchange in the market and to efficiently allocate resources under capitalism or socialism. It doesn’t mean that Lange hasn’t believed in the usefulness of Marxian theory. He thought the later is useful for another purposes. <<<

Hi Alejandro:

There's no doubt that Lange came to be attracted to some of the 
analytical tools of marginalism.  This does not mean that the subjective
theory of value was vindicated thereby anymore than a Marxian theory
of value is vindicated when someone abandons marginalism in 
favor of a Marxian perspective.  *At best*, it was an assertion by Lange.

Before one comes to the conclusion that the market is an efficient process
which has guided the allocation of resources under capitalism and can do so 
under capitalism, let us consider from a global standpoint the consequences
of this alleged capitalist efficiency.

In due course, I believe that it will be commonly recognized that the most 
far-reaching and historically important consequence of capitalism has not been 
merely the development of the productive forces, instability, poverty, class 
oppression and economic crises, but has rather been the *systematic
undermining of the  conditions for the reproduction of life for our species 
and all others on this planet!*
It was not surprising -- given the time and  social context in which Lange
wrote -- that he did not appreciate the extent to which the market, and
"externalities",  have etched this legacy into the land and seascape of
Earth.   If there is socialism, a burning and urgent question for workers will 
be whether we can collectively "salvage" the environment  before it's too late
for our species and others.  Faith in the market, just like faith in the ability of
new technologies to solve these problems, must be abandoned.
>>> Clearly the relative merits of Marxian economics and of modern “bourgeois” economic theory belong to different “ranges”. Marxian economics can work the economic evolution of capitalist society into a consistent theory from which its necessity is deduced, while “bourgeois” economists get no further than mere historical description. On the other hand, “bourgeois” economics is able to grasp the phenomena of the every-day life of a capitalist economy in a manner that is far superior to anything the Marxists can produce […] In people want to anticipate the development of Capitalism over a long period a knowledge of Marx is a much more effective starting point than a knowledge of Wieser, Boehm-Bawerk, Pareto or even Marshall (though the last-named is in this respect much superior). But Marxian economics would be a poor basis for running a central bank or anticipating the effects of a change in the rate of discount. (pp. 191-192) Oskar Lange, “Marxian Economics and Modern Economic Theory”, The Review of Economic Studies, Vol. 2, Nº 3, (Jun., 1935). <<<

I agree with you that Marx was very concerned with the problems of
everyday life under capitalism -- hence his repeated admiration for 
Engels' book _The Condition of the Working Class in England_ 
and his many journalistic articles which reported on a wide range of 
events.   Lange's claim, however,  that  bourgeois economics is 
better able to grasp those realities is (once again) at best an assertion.  

To the extent to which Marx was concerned with everyday phenomena, 
he was far more concerned with the everyday lives of the working class
than with central bank policy.  He did not see to establish a  role for 
himself as a  policy advisor for states and capitalist institutions: he 
was a revolutionary and tended to focus on those everyday events which 
had significance for grasping the condition of workers and had implications 
for the revolutionary struggle against capitalism.  

In solidarity, Jerry

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