tag:blogger.com,1999:blog-6245381193993153721.post2286222991063983723..comments2024-03-17T00:23:24.896-07:00Comments on Social Democracy for the 21st Century: A Realist Alternative to the Modern Left: Matias Vernengo on Marx’s Labour Theory of ValueLord Keyneshttp://www.blogger.com/profile/06556863604205200159noreply@blogger.comBlogger18125tag:blogger.com,1999:blog-6245381193993153721.post-29812989008600092962015-04-04T13:58:01.970-07:002015-04-04T13:58:01.970-07:00It kind of says something about the discussion tha...It kind of says something about the discussion that the word "clarify" now gets scare-quotes.<br /><br />As it happens, I own a copy of that book. As I type this, it is within arm's reach on my bookshelf.<br /><br />And your description of administered pricing is lovely. Really. If you'd apply as much care to your reading of Marx as you clearly do to your reading of Lee, I doubt we'd be having this discussion. However, a synoptic view of possible pricing arrangements does not actually address the <i>tendency</i> under discussion, which consists of nothing more than the effects of the movement of capital.<br /><br />Scientific realism holds that mechanisms can exist even unactualized or unexperienced. In this case, the tendency is generally actualized, but not always experienced, due to the multiplicity of causes in the economy. But even if the process does not play out fully, the movement of capital is an undeniable feature of the real economy. And with that movement of capital comes technical improvement and supply growth, which tend to depress prices and with it per-unit profits, and so on.<br /><br />Consider how blunt Alan Freeman is in the paper I directed you to, stating in no uncertain terms that the ultimate determination of profits is nevertheless contingent (bolding mine):<br /><br /><i>"<b>No necessary law governs the actual profits realised in different sectors.</b> Most important of all, when we look beneath sectoral averages we find <i>individual</i> profit rates realised by different producers of the same commodity. Whatever the sectoral averages, these differ vastly and are the motor of the investment mechanism. As Marx repeatedly argued, <b>the pursuit of an above average profit rate, brought on by an exceptionally productive new technique, is the real motive for capital movements</b>."</i><br /><br />In other words, where the rubber meets the road, PK price theory and TSSI value theory do appear, as I have been saying, compatible. It was reading Lee (and Godley and Lavoie) that solidified the notion for me, actually!<br /><br />(Note: I won't have time for the remainder of the weekend to read and reply to your new post or any subsequent comments, as I'll be visiting with family.)Hedlundnoreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-44495182291505419402015-04-04T08:40:45.357-07:002015-04-04T08:40:45.357-07:00If you are asking me to "clarify" how bu...If you are asking me to "clarify" how businesses that maintain different mark-ups destroy the idea that all profit rates equalise under capitalism, then I explained it above: mark-up pricing is deliberating done to set a target rate of return and severe barriers to entry are the norm. Then as a business you use advertising, sales promotion, or celebrity endorsement etc to manipulate people's utility and demand. <br /><br />Firms in the same sector generally follow a price leader in that sector, and set mark-up on total average unit costs. This is then generally maintained because businesses hate price wars and need to establish goodwill with customers by keeping prices stable. <br /><br />If you are not satisfied with this, then read <br /><br />Lee, Frederic S. 1998. Post Keynesian Price Theory. Cambridge University Press, Cambridge and New York. Chapter 12, pp. 225ff.Lord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-37685797458285723372015-04-04T08:29:19.809-07:002015-04-04T08:29:19.809-07:00Matias,
I do apologise to you for failing to unde...Matias,<br /><br />I do apologise to you for failing to understand that you were not necessarily endorsing Sraffa's view<br /><br />regardsLord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-7708791097668936442015-04-04T08:22:32.107-07:002015-04-04T08:22:32.107-07:00Don't "also" me; I asked you a quest...Don't "also" me; I asked you a question in between those asinine comments of yours. At least <i>try</i> to disguise your contempt for meaningful discourse. <br /><br />You haven't earned an answer but here it is anyway:<br /><br />(1) yes, because s=p at the <i>average OCC</i> for prices of production, meaning ratios above and below balance. <br />(2) what part of "for the last time" did you not understand? <br /><br />For real, you steamrolled my request for clarification (which I suspect you can't provide) so you could ask the question I answered about 2.5 inches further up the page. Are you like, a blogging collective instead of a single person? Should I take this as multiple people asking?Hedlundnoreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-70766352083557300042015-04-04T08:13:48.756-07:002015-04-04T08:13:48.756-07:00Thanks for the post. It's not my view really. ...Thanks for the post. It's not my view really. I just reproduce a well established Sraffian view, which is what Sraffa really thought about it, as Garegnani, Vianello, and others have described in numerous places. Matias Vernengohttps://www.blogger.com/profile/09521604894748538215noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-74161111987390185882015-04-04T06:13:34.058-07:002015-04-04T06:13:34.058-07:00Also, you need to clarify:
Do you think labour va...Also, you need to clarify:<br /><br />Do you think labour value = prices in an aggregate sense even when (1) the organic composition of capital in different industries is different and (2) there is no uniform profit rate?Lord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-34753649545806027242015-04-04T00:29:17.645-07:002015-04-04T00:29:17.645-07:00Your response is high on insistence, low on explan...Your response is high on insistence, low on explanation.<br /><br />How do mark-ups in any way contradict what I said? Do you even understand the point being made? (Hint: It in no way depends on flexprices.)Hedlundnoreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-11001005194959458872015-04-03T23:21:44.363-07:002015-04-03T23:21:44.363-07:00" Ceteris paribus, this would equalize the ra...<i>" Ceteris paribus, this would equalize the rate across the economy. "</i><br /><br />Not it would not. Because you ignore the role of mark-ups. <br /><br />What you want to say is: if I assumed all REAL WORLD factors away, and assumed by definition artificial conditions, then I can say there is a tendency to the rate of profit to fall.<br /><br />That is worthless reduction of the real world to an empirically irrelevant analytic a priori model -- just like any neoclassical who wants to defend a model where all prices have tendency to market clearing. <br /><br />With the methodology you describe, you could "prove" all neoclassical or Austrian theories true.Lord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-19166484779579471842015-04-03T22:56:30.712-07:002015-04-03T22:56:30.712-07:00I've already explained why the real world has ...<i>I've already explained why the real world has no tendency to a uniform rate of profit</i><br /><br />No, you haven't "explained" any such thing; you've "asserted" it a few times, such as now, in the case of (1).<br /><br />As for (2), I've been absolutely clear that profit rates never do empirically equalize, because there are many other factors also at work. The tendency is not, as I said, unicausal (or monocausal, if you prefer Greek prefixes).<br /><br />Denying the tendency is tantamount to denying the effect of arbitrage, or of the movement of capital from less-profitable to more-profitable enterprises (which then grow and develop and become less profitable). Ceteris paribus, this would equalize the rate across the economy. Real life does not "do" ceteris paribus, but that just means the tendency works alongside other factors, not that it doesn't exist.<br /><br />If a taut elastic band connects your waist to the corner of a room, but you are still able to go anywhere within the room, would you conclude that it exerts <i>no</i> force on you? No; merely that said force is often overcome.Hedlundnoreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-56928537385139869122015-04-03T22:17:02.651-07:002015-04-03T22:17:02.651-07:00I've already explained why the real world has ...I've already explained why the real world has no tendency to a uniform rate of profit<br /><br />(1) the classical and neoclassical arguments for a tendency to uniform rate of profit are flawed and empirically worthless. <br /><br />The LTV and all theories derived from it allegedly showing a tendency to uniform rate of profit are flawed and empirically worthless, because the LTV is flawed, incoherent and empirically worthless.<br /><br />(2) we have no convincing empirical evidence that profits equalise, and huge and overwhelming evidence against it. Long run profit rates are a random walk and divergent, and short run profit rates explained to a great extent by the business cycle and institutional factors (e.g., mark-up pricing, strength of unions). Lord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-74521374936907390742015-04-03T21:09:11.512-07:002015-04-03T21:09:11.512-07:00Utter gibberish -- and absolute proof of your inte...<i>Utter gibberish -- and absolute proof of your intellectual bankruptcy.</i><br /><br />...<b>Wow</b>. Just, wow. When the bottom drops out on the quality of your arguments, it <i>really</i> drops out.<br /><br />"I don't recognize these basic Philosophy of Science terms — <a href="http://plato.stanford.edu/entries/dispositions/" rel="nofollow">powers, tendencies, dispositions, etc.</a> — therefore, they must mean nothing!" This is the mindset of a child. <br /><br />Go read a book — some actual realist philosophy, such as the work of Lawson, Maki, or Mumford, just to name a few contemporary scholars — and learn some damn epistemic humility. Only once you learn to check yourself will you finally stop wrecking yourself, in plain view of the whole internet.<br /><br /><i>Does the real world have a tendency to a uniform profit rate if not. Yes or no?</i><br /><br />Yes, it does. I've already been clear about this, and about the fact said tendency is nevertheless commonly offset by other factors. Asking me to re-re-re-clarify is a waste of time, as I have never wavered on this point. Now go on, LORD, tell me how you, the ultimate arbiter of truth, don't believe it and therefore it's bunk.<br /><br /><i>So you think that, say, at ever point even when profit rates are different, labour value = prices in an aggregate sense? Is that correct?</i><br /><br />For the last time *Yes*. I don't know what part of "double-entry bookkeeping" you're struggling with. That's how Marx views the sphere of circulation. Everything comes from somewhere and goes somewhere, and all the rows and columns sum to zero.Hedlundnoreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-2310695919618574722015-04-03T19:22:07.496-07:002015-04-03T19:22:07.496-07:00""Has a tendency" is a statement ab...<i>""Has a tendency" is a statement about the nature of structural mechanisms, not an expression of unicausality! </i><br /><br />Utter gibberish -- and absolute proof of your intellectual bankruptcy.<br /><br />Does the real world have a tendency to a uniform profit rate if not. Yes or no?<br /><br />(2) <i>Said differences *also* cancel out without equalized profit rates.</i><br /><br />So you think that, say, at ever point even when profit rates are different, labour value = prices in an aggregate sense? Is that correct? Lord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-35596296733230670342015-04-03T18:20:31.695-07:002015-04-03T18:20:31.695-07:00Another set of comments covering precisely the sam...Another set of comments covering precisely the same complaints I've already addressed. Ho hum. I'll be brief.<br /><br /><i>No, Hedlund, you [are] incapable of even proving the LTV as stated in Chapter 1 of Capital is coherent and empirical relevant at all. </i><br /><br /><i>This</i> is incoherent; it amounts to asking why, in ch 1 vol 1, when the theoretical apparatus is still being explained, he has not presented a complete value theory. I suppose I could get the full content of Keynes's General Theory from just ch 1, then?<br /><br />If your complaint is that capital is <i>too long</i>, we've lapsed back out of economics and into aesthetics.<br /><br /><i>Repeatedly, you cannot explain how to properly define and measure heterogeneous labour in the first place, as SNLT.</i><br /><br />Outright falsehood. Others and I have explained countless times how it is defined and measured in previous posts. As they say, one can lead a horse to water...<br /><br /><i>You cannot sensibly explain to me why animal labour -- or for that matter slave labour -- shouldn't be included in any empirical definition of labour value</i><br /><br />Another falsehood. For those just joining us, I have explained this in detail underneath the "Animal Labour" post, complete with a link to a (non-Marxist!) article illustrating the distinction.<br /><br /><i>You can't explain why labour should be considered the sole determinant of some mysterious labour value</i><br /><br />That's fine. I don't care about "mystical" labor value; just the real kind, which I <i>can and have</i> explained. I don't care if you <i>like</i> the theory, because I don't debate aesthetics. <br /><br />All that matters is whether it is internally consistent and empirically supported. You have not disputed either without recourse to equivocation between interpretations, misuse of the vocabulary, or empty assertions.<br /><br /><i>Marxist sub-cults ... angels, head of pin, cult</i><br /><br />Disgusting rhetoric from the person who has ignored basically every standard of scientific discourse in this exchange.<br /><br /><i>their arguments are worth nothing, if they cannot even justify the LTV as a empirically useful concept at all</i><br /><br />Agreed.<br /><br /><i>and like you they can't.</i><br /><br />"LK Hasn't Read Empirical Work" != "There Is No Empirical Work." I've even provided some. Yet another dishonest claim, frankly astounding in its epistemological implications.<br /><br /><i>Meanwhile, Post Keynesian economics gets the job done. It shows how prices are determined -- just as I have shown in the last part of this post.</i><br /><br />This is like critiquing heliocentrism for failing to predict the weather. But please, continue to make sweeping arguments from ignorance.<br /><br /><i>Finally, you also retreat into ... how labour value equals profit only in an aggregate sense in which, at a uniform rate of profit, price deviations above and below labour value cancel one another out.</i><br /><br />Said differences *also* cancel out <i>without</i> equalized profit rates. I've already explained this. That's basically the theme of the day; LK repeating misleading claims answered elsewhere.<br /><br /><i>But we have already seen above how even that is empirically worthless since real world capitalism does not actually have a tendency for the rates of profit to equalise.</i><br /><br />Already explained. "Has a tendency" is a statement about the nature of structural mechanisms, not an expression of unicausality! Of course it doesn't suffice by itself to predict price movements. Your criticism suggests that you haven't fully discarded the positivist methodology, and thus your reported preference for scientific realism is suspect.<br /><br /><i>even if you could defend it from Bortkiewicz, Dimitriev and Tugan-Baranovsky etc.</i><br /><br />I have no reason to believe you grasp even a small part of the arguments of the theorists you're namedropping like a compulsive tic, but yes, they have been rebutted conclusively.<br /><br /><i>It has no explanatory power. It adds nothing economic theory.</i><br /><br />Unsupported. Basically a mantra at this point. Keep chanting, though.Hedlundnoreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-55415969402419918572015-04-03T13:21:43.704-07:002015-04-03T13:21:43.704-07:00LK, i would also like someone to dissect the idea ...LK, i would also like someone to dissect the idea of Matias Vernengo that "labor commanded" is in some sense showing the importance of labor in Sraffian models. I've vague feeling it is just a numerarie and thus has no special relation to labor...<br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-16724587003799022682015-04-03T10:13:27.441-07:002015-04-03T10:13:27.441-07:00Finally, you also retreat into the aggregate expla...Finally, you also retreat into the aggregate explanation of LTV in vol. 3: that is, when Marx discusses how labour value equals profit only in an aggregate sense in which, at a uniform rate of profit, price deviations above and below labour value cancel one another out.<br /><br />But we have already seen above how even that is empirically worthless since real world capitalism does not actually have a tendency for the rates of profit to equalise. <br /><br />Your aggregate LTV equality even if you could defend it from Bortkiewicz, Dimitriev and Tugan-Baranovsky etc. is still <i>empirically worthless and useless</i> . It has no explanatory power. It adds nothing economic theory.Lord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-83319709390540197932015-04-03T10:02:48.130-07:002015-04-03T10:02:48.130-07:00No, Hedlund, you -- like all Marxists -- are total...No, Hedlund, you -- like all Marxists -- are totally incapable of even proving the LTV as stated in Chapter 1 of Capital is coherent and empirical relevant at all. <br /><br />Repeatedly, you cannot explain how to properly define and measure heterogeneous labour in the first place, as SNLT. You cannot sensibly explain to me why animal labour -- or for that matter slave labour -- shouldn't be included in any empirical definition of labour value -- except by retreating into analytic definitions of the LTV of no concern to anyone actually interested in real world economies. <br /><br />You can't explain why labour should be considered the sole determinant of some mysterious labour value, when it is clearly not even a sufficient condition for such value in the first place. <br /><br />As for all the endless internecine debates between Marxist sub-cults, all their arguments are worth nothing, if they cannot even justify the LTV as a empirically useful concept at all -- and like you they can't. <br /><br />All they are doing is arguing over how many angels can fit on the head of a pin, and wasting their lives away on a cult.<br /><br />Meanwhile, Post Keynesian economics gets the job done. It shows how prices are determined -- just as I have shown in the last part of this post. The LTV has ZERO explanatory power.Lord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-49804503625186277022015-04-03T09:59:17.944-07:002015-04-03T09:59:17.944-07:00ED: I retract that LK has not proffered a retracti...ED: I retract that LK has not proffered a retraction; he <i>just</i> did so on one point in the previous post.Hedlundnoreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-25354370802767872015-04-03T09:49:34.007-07:002015-04-03T09:49:34.007-07:00As LK flees to yet another post from the last wrec...As LK flees to yet another post from the last wreckage, I will make a similar public service announcement:<br /><br />Newcomers are encouraged to read the earlier posts and, ESPECIALLY, the comments beneath them. <br /><br />LK has not illustrated an adequate grasp of the subject matter to criticize it effectively. In particular, a number of his claims have been proven flatly wrong, and though LK retains the conceit that he is "willing to learn from corrections or misunderstandings," he has yet to proffer a retraction on any falsified claim. <br /><br />As stated in the last post: LK's attack on Marx appears to be purely ideologically motivated. He has shown nothing but contempt for the notion that one should use terms correctly, and rushes to conclusions that demonstrate the zeal and certainty of a praxeologist based on a limited and frequently erroneous grasp of the subject matter.<br /><br />LK, as for this post in particular: <br /><br />Careful; by quoting Vernengo, you signal that you are leaving behind your previous idiosyncratic gripes and stepping into the Marxist interpretive debate proper.<br /><br />Vernengo points out, correctly, that "you can't argue with the algebra." But this misstates the problem, since no one argues with the algebra; they argue with the underlying assumptions. For example, the TSSI's response to Okishio is not to say he made a mathematical error, but that the premises are faulty; though Okishio's theorem does great damage to simultaneous dual-system interpretation, the argument is logically invalid when placed in TSS terms, and therefore says nothing against it.<br /><br />If you're now going to use arguments drawing from the SDSI to argue against Marx generally, then (apart from the fact that it illustrates SDSI Marxists are doing more harm than good) you're in for a long hike. You may as well just spend the next hundred or so posts quoting the countless debates in books and journals over the past quarter century, to spare yourself the trouble of reinventing the wheel. <br /><br />It's worth noting that you've already got a book that illustrates the problem with every single claim of inconsistency that emerged from said debate, from Dmetriev and Bortkiewicz to the present. It's just a question of whether you're willing to read and comprehend. You've given little reassurance to that end, so far.Hedlundnoreply@blogger.com