The Keen/Ernst debate

Steve.Keen at Steve.Keen at
Mon Oct 16 16:28:20 MDT 1995

Thanks to Andrew for the comment:

|Probably it was not Steve's intention, but the idea that "dynamic" reformulation
| of Marx's value theory is an attempt to rescue the LTV makes it sound like a
| sort of analytical trick.  Saying that the work of Freeman, Ernst, Kliman,
| McGlone, etc. refutes the logical refutations of Marx helps make clearer
| that the "tricks" are actually the assumptions of Dmitriev, Bortkiewicz, and
| the post-Sraffian (not MOSTLY Sraffa himself), smuggled in unobtrusively.
|  It is amazing how "powerful" the input price = output price assumption is,
| for instance.

with which I entirely agree. I certainly don't regard the use of dynamics
as an analytic trick, since I use it in my own work. The analytic trick,
as Andrew correctly identifies, is the "input price = output price
assumption", which I believe was valid in the context in which Sraffa
himself applied it, but utterly illegitimate as the basis for the analysis
of capitalism, which is how his "followers" such as Steedman purport to
use it.

Andrew comments that Sraffians claim that stationary prices are the only
ones that permit reproduction, and in this he's entirely correct. In fact,
if you look at Steedman's 1992 critique of Kaleckian mark-up pricing
theory in the Review of Political Economy, you will see that his numerical
example has stationary prices, as well as a 50% rate of surplus and
33% rate of profit--and yet no consideration of the disposal of the
surplus, let alone accumulation of it.

As I hope my next two posts made clear, I'm not concerned with the
issue of price stationarity in Marx, but with whether the foundations of
the labor theory of value are logical--by which I mean whether they
flow from Marx's own dialectical logic. My characterisation of the LTV
as "static" was a "side-swipe", in that sense, an initial short-hand for
the statement that I don't believe the LTV is logically derived by Marx.

But there is a sense in which I still regard Steedman's initial critique
of Marxian value theory as valid. Marx's discussion of the value/price
relation was an "as if in equilibrium" one. Steedman's critique was that
in an equilibrium situation, with varying capital to labor ratios,
using the raw input data gave valid equilibrium prices, but applying
the LTV categories to the same data gave invalid equilibrium prices.

Steve Keen

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