Vulgar Economy in Marxian Garb: A Critique of Temporal Single System Marxism:Re: Value Theory (2): TSS Paradigm

S Chatterjee schatterjee2001 at
Fri Mar 2 16:34:52 MST 2001

--- Xxxx Xxxxxx <xxxxxxxxxx at> wrote:

> What evidence are you suggesting that TSS is
> consistent with Marx's own value theory? Indeed, the
>critics of TSS are arguing that the theory is
> not textually grounded on Marx's writings. Kliman
> himself is confirming this by saying that the value
>theory should be empirically tested (see
> the archives for his article). As I said before that
> when TSS people try to vindicate Marx's value
>theory, they do this exactly in a way to
> _confirm_ Marx's neo-classical opponents or orthodox
> economists. That is the flow.  Their logic goes
>something like that 1) If Marx's critics are
> correct about the inconsistencies of Marx 2) then we
> should show that Marx's is not inconsistent or
>revise Marx. Why to revise Marx in order
> to refute those who misread Marx? As Mongiovi
> suggests in his below article: "A neat statement of
>this position can be found in the opening
> paragraphs of a recent paper by Andrew Kliman and
> Ted McGlone (1999), who remark that if Marx's
>critics are correct, if his theories "suffer
> from insuperable internal inconsistencies" and "are
> untenable even in their own terms", then his
>analysis must be discarded or revised.
> Kliman and McGlone go so far as to endorse Anthony
> Brewer's assertion (1995: 140) that if Marx's value
theory and his law of the tendency of
> the profit rate to fall "both fail … not much is
> left."

The problem with much of what passes for Marxist
analysis today is that it has become too polemical; it
has gone away from the method of science. To conduct
such an analysis, it is necessary to: (1) understand
the subject matter (to the extent possible) of which
one is speaking and this requires some mental and
physical effort, and, (b) keep an open and detached
mind so as to examine the various sides of a contested
question; this will require a lowering of the ego.
Most of us cannot see the many sides of an issue
(unlike Marx or Einstein) but together we may be able
to help one other attain such a viewpoint.

One of the problems with value theory is that it
raises passions and differing opinions and
interpretations. Christopher Caudwell had remarked in
his essay on Freud that the fact that the field of
psychology was rent with schisms was a pointer that it
had not yet developed into a science but was more like
a religion with warring sects. In the physical
sciences whenever such a crisis or schism develops,
the new theory or viewpoint generally prevails after a
protracted period of struggle. This is assuming that
the new theory is internally consistent and explains
the new empirical data which the old theory is
incapable of.

But before any theory can be developed, we have to
start with certain basic concepts or constructs or
mental pictures (which are derived from observations
of reality). It is only after this that the theory can
be fruitfully developed. If the basic concepts are
flawed, then the elaborate structure constructed on it
will also be flawed. This is the chief defect of
orthodox economics.

One of the problems with value theory is that the
basic concept of what is meant by value is not
adequately understood and agreed upon. That is the
main reason for the sharply differing viewpoints. The
reason of my two earlier posts was to present two such
differing viewpoints of value which any ordinary
person not trained in the field of economics could
understand. And then do more study, discuss, and judge
for ourselves.

But instead of making the effort to explain your own
point of view and understanding of the meaning and
differing interpretations of value, you reply with the
article polemically titled "Vulgar Economy in Marxian
Garb: A Critique of Temporal Single System" written by
a professor of economics. What is the point of
presenting such a critique when you have not developed
or explained your own views about the subject matter,
i.e., value? Why take refuge behind the coattails of
an academic expert and send 12 consecutive posts (when
you could have just provided the link or summaraized
the article in your own words)? To be able to critique
a thing, one has to first understand and work with the
thing itself. Only then can one make a reasonable

You mention Andrew Kliman and Ted McGlone whose works
I have not read (have you read and understood them?).
I am concentrating on Alan Freeman since he appears to
be the main intellectual of the TSS school. So far,
their concept of value seems reasonable but I may be
wrong and the future will tell. I am not an expert in
anything, least of all in Marxian economics. But I
have done some limited research and study in the field
of value theory and other fields of science. And it is
on this basis that I feel that the TSS concept is
sound. But as said earlier, this may be proven wrong
in the future.

Now some comments on the first part of the article
"Vulgar Economy in Marxian Garb: A Critique of
Temporal Single System Marxism" by Gary Mongiovi that
you posted.
> Since the publication of Ladislau von Bortkiewicz's
> assessment of Marx's transformation of labor values
>into prices, economists have generally
> acknowledged that Marx's treatment of the problem
> was deficient, and that prices of production can be
> explained without reference to labor
> values.

According to Freeman, the economists who have come to
the conclusion that Marx's theory was deficient,
actually have constructed a straw man. They have
constructed a caricature of Marx's concept of value
and have found inconsistencies in this caricature. And
Ian Steedman (a follower of the Sraffa school like
Gary Mongiovi) has proposed to do away with the
fundamental Marxian concept of value altogether since
as they say "prices of production can be explained
without reference to labor values". That is "hide that
mad aunt Value in the closet" in order to gain the
respectability of orthodox economics which also has a
theory of prices. "Value" is not needed by both the
neo Ricardians and the orthodox economists.

>The critique put forth by Bortkiewicz
> (1907) and subsequently reaffirmed and elaborated
>by, among others, Seton (1956-57), Morishima
> (1973) and Steedman (1977), attributes three
> interrelated errors to Marx.  First, in formulating
>the price equations laid out in Capital,
> Vol. III (1894: 154-172) Marx neglected to weight
> the inputs of each production process by their
>prices of production.  Second, the profit
> rate Marx uses to calculate prices is defined as a
> ratio of quantities of labor time.  But since prices
>of production do not in general
> coincide with labor-values, there is no reason to
> suppose that the economy's long-period normal rate
>of profit will coincide with the ratio
> of aggregate surplus-value to the aggregate quantity
> of labor embodied in constant and variable capital.
>Hence, Marx's price calculation,
> which is based upon the latter ratio, is incorrect.

Professor Mongiovi is repeating the familiar litany of
the "transformation problem" against Marx. Anwar
Shaikh has shown that all of the above seeming
problems can be taken care of by continuing the
iterative calculations. What Marx presented in Capital
III was apparently only the first iteration. I myself
have repeated Shaikh's calculations using the example
in one of his papers and have found that they do
indeed converge. All of the above problems disappear.
In fact, the Bortkiewicz and Sweezy one-step
simultaneous system and Shaikh's iterative
calculations gave the same answer if I remember
correctly. Note that the viewpoints of Shaikh and
Freeman are quite different and to understand them
further, more study is needed.

> Finally, Marx asserted that (i) the aggregate amount
>of surplus-value generated by production will equal
>the mass of profits; and (ii) the quantity-weighted
>sum of prices will equal the quantity-weighted sum of
> labor-values.  We now know however that, except in
> the special circumstances in which relative prices
>are proportional to labor-values, both of these
so->called invariance postulates cannot hold

If memory serves correctly, only one of the postulates
held in the iterative procedure of Shaikh. So
Professor Mongiovi may be right here. But again we
will have to examine the TSS viewpoint on this.

> What is puzzling is the apparent willingness of
>modern-day Marxists to accept precisely the same
>view - that if Marx's transformation algorithm is
>defective, his account of capitalism collapses.

The core issue here is not the transformation problem
per se but the concept of value itself. Steedman and
others like him would like to do away with this
concept alogether. But without value, there can be no
surplus value, and hence no real theory of

> Indeed, the vast oceans
> of ink that have been spilt in various campaigns to
> "vindicate" Marx on this point reflect a curiously
>narrow conception of his analytical
> achievement, a conception in which everything
> essential emanates from, and hence hinges upon the
>soundness of, his value theory.

Without the fundamnetal value theory of Marx (which
Freeman alleges that the Marxist economists have
caricatured), Marx is no longer Marx but a revision.
It is like throwing away the constancy of the speed of
light in special relativity.

The point of the view of the neo Ricardians and some
Marxist economists ultimately reduces to pure
physicalism, i.e., they emphasise quantities of output
(externalities). They have gone away from value which,
as defined by Marx, is the quantity of socially
necessary abstract labor time necessary to manufacture
a commodity, which is a dynamic quantity and changes
with time with the changes of productivity. Without
this central concept, reality cannot be explained.
This is the main issue of contention.


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