Labor theory of value debate

Steve.Keen at unsw.EDU.AU Steve.Keen at unsw.EDU.AU
Tue Sep 20 16:51:11 MDT 1994

Dear Louis,

Just a few quick comments on your post.

You mentioned that you are reading Meek; I hope that you have a copy
of the 2nd edition, which has both a preface and an afterword where
he discusses the impact that Sraffa's critique has had upon him, in
great detail but with, from memory, no equations--though lots of
formal thinking which could also be expressed in maths.

Secondly, my arguments which develop my anti-LTV case do use
mathematics; but the original arguments by which I attempt to establish
that the LTV is wrong use no mathematics at all. It is entirely an
interpretation of Marx's philosophy and logic.

Your comment:

>This led me to consider why I am so wary at the outset of a theory so
>heavily reliant on mathematics. Mathematics seems to be an insufficient
>entry-point into the study of capitalism. It tends to view social phenomena
>in a rather static fashion. Computer modelling, calculus, etc. might be
>sufficient for figuring out how to build bridges, missile guidance systems,
>etc. They don't seem exactly up to the task of analyzing the class struggle.

is one that I think reflected the attitude of many Marxists to the Sraffian
critique of Marx. That is one reason why I thought it still worth my while
to develop my critique.

In fact, an absence of maths is one case that I can put in my favour (though
I'm hardly going to "hang my hat" on it). If the maths in Minsky worried
you, you should consult almost any reference on the transformation problem
to see the complicated mathematical footwork that has to be done to get
over the LTV-motivated need to transform values into prices. And that
complexity originates long before any attempt is made to analyse the
class struggle using maths.

As for Minsky, please take a second look--there is much in that book
[I presume you were referring to _Inflation, Recession, and Economic
Policy_, which also goes by the name of _Can "it" happen Again_].
In particular, the Introduction (pp. xi-xxiv) and Ch 3 (pp. 59-70)
make a good statement of his perspective, without an equation in

Re the Great Depression, I don't deny that there were reformist and
revolutionary groups inspired by that cataclysm--my post said that
fascism was "as likely as", and on that front the experiences in
Germany, Japan, Italy, the Balkans, etc., are reasonable enough.
At the same time in my country (Australia), I think that there was
a huge rise in the membership of the Communist Party. The problem
is that we can't tell before going into an experience like that,
which side will emerge victorious on the other. You note that
such parties failed because of "nerve and sectarianism"--quite
possibly true, but is there any way to ensure that the same thing
won't happen "next time"? This was my concern--I wasn't trying
to knock reformists or revolutionaries, but to point out the dangers
in cataclysmic change--revolutions--which aren't nearly so acute in
gradual change--reform.

I agree that my analysis said nothing about the underdeveloped
world, and that Minskian style analysis in particular isn't
particularly relevant to it. Whether the great depression in the 3rd
world has been a necessary factor in the non-occurrence of such an
event in the West is a moot point, however. Underdevelopment is a
product of imperialism, without a doubt; whether its continued
existence is a necessary factor in the wealth of the West, I'm not
so sure.

Steve Keen


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