Vulgar economy (part 11)

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Thu Mar 1 20:11:35 MST 2001

Vulgar economy (part 11)

5. The Textual Evidence
Temporal Single System theorists acknowledge that Bortkiewicz's critique
is sound as regards the traditional long-period interpretation of Marx's
value analysis.  What they claim is that the critique is directed at a
misrepresentation of Marx's theory; when Marx is correctly interpreted -
as having sought to explain the sequential movement of actual market
prices and values (defined as money costs) - the usual criticisms no
longer apply.

        Naples puts an interesting spin on this argument when she characterizes
Bortkiewicz's contribution as the "discovery of a contradiction between
Marx and equilibrium."  Bortkiewicz's mistake was to allow "his
simplifying equilibrium assumptions to vitiate Marx's most critical
concept[s]: that the capitalists' ownership of the means of production
permits them to extract both necessary and surplus labour from workers,
and that their labour productivity explains both prices and the profit
rate" (Naples 1996: 97).  How Bortkiewicz's argument "vitiates" these
concepts is unclear, since they both hold (though not exactly as Marx
supposed them to) within the conventional interpretation.  In any case,
according to Naples, Bortkiewicz demonstrated that if a uniform profit
rate condition is imposed on a

Simlutaneous-time [sic!] model … the system of equations becomes
overdetermined.  But Marx would argue that it is not he but capitalism
which is internally inconsistent.  Its tendency towards a uniform profit
rate cannot be realized.  He would agree with Walras that the promise of
socialism hinges on demonstrating the irrationality of capitalism.  And
he would applaud the success of his labour theory of value in
demonstrating precisely that (1996: 111-112).

In this deformed analogue of Samuelson's eraser solution, the
contradictions exposed by Bortkiewicz are resolved by a semantic waving
of hands: the contradictions are not Marx's but capitalism's, and they
become apparent only when we try to fit his theory into an equilibrium
straightjacket and then "discover" what appear to be errors in it.
Naples argues that "the labour theory of value was Marx's 'hard core'
[in the sense of Lakatos 1978] and therefore incapable of refutation
from within his own paradigm….  He would have rejected equilibrium as an
'inappropriate abstraction' inconsistent with his core principles"
(1996: 97).
I think it doubtful that the inventor of historical materialism would
have defended his own theory by insisting that its premises are not
subject to scientific scrutiny.  Beyond that, however, Naples's
reasoning reflects a central defect of Non-equilibrium Marxism -that the
main argument adduced in support of its interpretive stance is that this
interpretation, and the idiosyncratic terminology that goes with it,
provide a rhetoric in which certain questionable propositions put forth
by Marx can be made to appear correct. A cursory examination how
Non-equilibrium Marxists handle the textual evidence reveals that
careful attention to nuance and context is not characteristic of their
The following passage occurs in Capital, Vol.I:

Magnitude of value expresses a relation of social production, it
expresses the connection that necessarily exists between a certain
article and the portion of total labour-time of society required to
produce it.  As soon as magnitude of value is converted into price, the
above necessary relation takes the shape of a more or less accidental
exchange-ratio between a single commodity and another, the
money-commodity.  But this exchange-ratio may express either the real
magnitude of that commodity's value, or the quantity of gold deviating
from that value, for which, according to circumstances, it may be parted
with.  The possibility, therefore, of quantitative incongruity between
price and magnitude of value, or the deviation of the former from the
latter, is inherent in the price-form itself (1883: 102).

Working from a translation that writes "transformed" for "converted",
Freeman (1996: 10-11) offers this passage as evidence that Marx had no
need to transform inputs in Volume III, "because the transformation is
already given in Vol. I".   But the passage merely makes a routine point
that no one disputes, that money-denominated prices can diverge from
labor-values for both systematic and accidental reasons.  In drawing a
connection to Volume III, on the basis of nothing more than the presence
of the word transformed, Freeman fails to notice that the passage
provides no support at all for the Temporal Single System position.
        Similarly, when Marx writes in Volume II (1893: 106) "that value
functions as … capital only in so far as it remains identical with
itself and is compared with itself in the different phases of its
circuit, which are not at all 'contemporary' but succeed one another,"
Freeman (1996: 16) sees proof that Marx's methodological views are
incompatible with the simultaneous determination approach.  But
Freeman's reading is a non sequitur.  Neither Bortkiewicz nor Sraffa,
nor anyone else, claims that Marx adopted a simultaneous determination
approach in his discussion of value and price.  What is at issue is
whether he conceived of values and prices as long-period centers of
gravitation, in which case some of the problems that arose in his
analysis of value can be resolved only within a simultaneous
determination framework.  The quoted passage has no bearing on this
point.  Nor is the simultaneous determination method at all in conflict
with Marx's quite sensible observation that capital changes form over
time as it passes through the various phases of its circuit.
        In Theories of Surplus Value (1862-63, Vol. II: 167) Marx tells us that

Every commodity which enters into another commodity as constant capital
emerges as the result, the product, of another production process.  And
so the commodity appears alternately as a pre-condition for the
production of other commodities and as the result of a process in which
the existence of the other commodities is the pre-condition for its own

To Freeman (1996: 16) this statement can only be interpreted as
supportive of a method of successive determination in chronological
time.  Readers less fixated on grinding the Temporal Single System axe
might perceive that the statement is equally consistent with a view of
production as a circular process in which commodities are produced by
means of commodities - and that important aspects of an economic system
so-conceived can be elucidated through simultaneous equation models of
the sort developed by Bortkiewicz and Sraffa.

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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