Re: [OPE] CAPITAL AS POWER: free PDF download

From: Ian Wright <>
Date: Mon Nov 29 2010 - 17:09:26 EST

Just some random thoughts on a skim-reading of Nitzan and Bilcher's
book, particularly the sections relevant to value theory. I must read
the whole book, when I get time, since it seems very interesting and
of high quality, although I completely disagree with their

Nitzan and Bilcher reject the *possibility* of any theory of economic
value, whether neoclassical, Marxist, or whatever. They do not
mention Samuel Bailey.

N&B not only reject modern neoclassical economics but the entire
theoretical foundation of Classical Political Economy, specifically
any value theory that attempts to relate nominal magnitudes (e.g.,
money prices etc.) to real magnitudes (e.g., labor-time, etc.).
Obviously that's a radical proposal. But is it a good one? Attention
therefore immediately focuses on the reasons why Nitzan and Bilcher
reject value theory. They spend considerable time on the Cambridge
capital controversies and the problem of defining "quantity of
capital". They conclude that neoclassical economics cannot sustain the
idea that capital is a material quantity. They also spend considerable
time on Marx's theory. The primary (although not only) reason that
Marx cannot sustain the idea that capital as a material quantity is
the transformation problem. They also survey the literature on
empirical correlations (Shaikh, Cockshott & Cottrell etc.) and reject
it (for Kliman-like reasons, plus they object to using price data
deflated by the wage rate to infer embodied labor coefficients).

Hence capital is not a material magnitude but something else, namely "power".

I agree with N&B that if one looks at the history of economics it is a
continuing story of failed (or not entirely successful) attempts to
get-to-grips with economic value, especially with regard to the nature
of "capital". So concluding that the whole enterprise is misguided
isn't unreasonable.

Sometimes it is argued on OPE-L that Marxist theoreticians should move
on from the "transformation problem", which is not only very old but
seemingly fruitless. Yet -- time and time again -- we see empirically
that many intellectuals have adapted their theoretical work and have
taken it in certain directions precisely because of the existence of
the transformation problem. Ideas and intellectuals of course matter
and theoretical obstacles are a type of material obstacle.

Would N&B be interested to know that it is easy to show that "prices
of production" do in fact measure objective real costs, specifically
the total coexisting labor required to reproduce commodities?
Certainly this result knocks away one of the main pillars of their
rejection of the possibility of a labor theory of value.

I'd be interested in Paul, Allin & Dave's responses to their critique
of the empirical results of very high correlation between labor-values
and aggregated market prices.

I would like to read their whole book with two questions in mind,
"What do magnitudes of money represent in their theory?" Nothing or
something? And, "Why does a car cost more than a pencil?"

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Received on Mon Nov 29 17:10:54 2010

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