Vulgar Economy-TSS (part 6)

Xxxx Xxxxxx xxxxxxxxxx at
Thu Mar 1 20:02:15 MST 2001

Vulgar Economy-TSS (part 6)

        Freeman (1996: 17-19) attributes a set of absurd "presuppositions" to
equilibrium theory in all its variations.  He seriously misrepresents
the positions he opposes, and demonstrates a startling incapacity to
distinguish identities, equilibrium conditions and tendencies from one
another.  According to Freeman, the Sraffa-Bortkiewicz framework
presumes that "Commodities are sold for the price at which they were
purchased. This is the secret, ideological form of the basic Equilibrium
postulate, which has the most profound impact on the internal logical
structure of every variant of it."  He maintains also that the
equilibrium framework comprises "a Ptolemaic System [whose] job is to
sustain an ideology" (1996: 21) in which "All profit rates are equal",
and in which "Prices can never change".

        These attributions are simply wrong. Equilibrium theories do not
presume that actual profit rates are equal across sectors, or that
prices are constant and uniform for each commodity. The presumption is
that there exist within capitalism mechanisms that, under given
conditions of production and given distributional arrangements, (i)
cause the prices of all units of each type of commodity to gravitate
toward a unique value, that is, toward the commodity's long-period
normal price; and (ii) cause sectoral profit rates to converge if there
are no impediments to the movement of capital.  Marx affirmed the
centrality of these tendencies, as we have seen.

        None of this is intended to deny what is indisputable, that Marx
devoted ample attention to crisis and structural change.  But there is
no evidence that he regarded these phenomena, in themselves, as
destructive of the results obtained through the application of the
long-period method.  The evidence, as reflected in his remarks on the
tendency of sectoral profit rates to equalize, lies entirely on the
other side.   Trade cycles, growth, technical change and the
socio-political dynamics of class conflict coexist with equilibrating
processes such as those described by Smith and Ricardo.  Non-equilibrium
Marxists maintain that the long-period method is incompatible with a
reality characterized by disequilibrium and historical change.  On the
contrary, the method not only acknowledges the existence of crises,
coordination failures and evolutionary change - it contends that they
can best be understood against the background of the gravitational
mechanisms they disrupt.

4.      Analytical Features of the Temporal Single System Approach

        The essential elements of the Temporal Single System Approach are
captured in a model developed by Kliman and McGlone (1999).   They begin
by defining a unit of labor-time as the amount of labor that exchanges
for one unit of money, say a dollar, so that all of the value and price
magnitudes in the model can be read either as quantities of money or as
quantities of labor-time.  All parameters and variables are measured per
unit of output.  Constant capital   and variable capital   represent the
sums of money advanced by capitalists in sector i to purchase means of
production and to pay the wages of workers.  These sums of money need
not correspond to the quantities of labor actually embodied in the
material inputs utilized or in the wage goods consumed by workers.
Surplus-value   represents the amount of labor-time, again measured in
money, that employers compel workers to perform in excess of  .  Thus
is the total amount of direct labor, measured in money, devoted to the
production of a unit of commodity i.    Values  ,   …   are therefore
given by the expression

Xxxx Xxxxx Xxxxxx
Ph.D Student
Department of Political Science
SUNY at Albany
Nelson A. Rockefeller College
135 Western Ave.; Milne 102
Albany, NY 12222

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