Value Theory

Julio Huato juliohuato at
Tue Mar 6 18:24:19 MST 2001

Dr. George Snedeker" <snedeker at> says:
<Julio writes:   Now, I just say that its practical use to capital -- its
huge social influence in general -- suggests that economics can provide deep
insight into the workings of capitalism.
it does not  follow that "practical use" and "social influence" means that
it also provides scientific understanding into the workings of the CMP.
ideas may have social influence as ideology, for example, without having
scientific validity. they may also have a practical use. it all depends on
what we mean by "practical use.">

One doesn't follow from the other.  But they are not mutually exclusive
either.  What are we talking about?  Astrology?  Tarot?  Vampirism?  No.
We're talking about modern economics -- a discipline that claims to subject
itself to the rigors of logic and empirical verification.  Can an
ideological sham like this go on for 150 years plus without any insider
providing a little reality check and/or without any outsider shaking the
tree?  How is it possible that no scientific insight can come out of all
this?  Shouldn't we suspect instead that the critics haven't worked hard or
smart enough to find the jewel hidden in the rubbish?

Dr. George Snedeker" <snedeker at>:
<we need to be less abstract. does contemporary economics show us how
surplus value is produced? does it tell us anything about the crisis of
overproduction? what does it tell us about the relations of production and
their relation to the forces of production? Marx once suggested that the
economists after Smith and Ricardo were little more than paid pries fighters
in the employ of capital. this did not mean that they did not have social

Let's do that.  Why should contemporary economics show how surplus value is
produced?  Didn't Marx's critique of political economy already did that?
Discovering the Mediterranean once is enough.  What we should show -- if we
are to dispense wholesale with it -- is that economics is incompatible with
the category of surplus value.

Does it tell us anything about the link between forces of production and
relations thereof?  Well, one summer weekend the reader may want to grab a
bottle of wine and read Ronald Coase's articles on "transaction costs" and
"theory of the firm."  It's not very mathematical.  Now, let me make an
outrageous statement: No Marxist has ever posed the question of the link
between what Marx called the "socialization" of production under capitalism
and the character of ownership more clearly than this.  This is not an
ideological muddling of the waters (the waters are pretty muddled in this
issue anyway, which has barely been touched seriously since Marx) -- it is
instead a clarification.  Of course, the "solutions" may not be complete.  A
Marxist would probably have to do some work to extract the germ of
scientific truth from the ideological shell... and also to turn it into the
jargon we philo-Marxists can understand.

Or read Ken Arrow's book on Social Choice -- what's "Arrow's Impossibility
Theorem" but a clear-cut mathematical formulation of the dialectics between
individual and collective interest.  Who in the Marxist camp has ever tried
to prove him right or wrong?  Again, Arrow is not a Marxist, but why should
he be one?

Does economics tell us anything about the crisis of overproduction?  Guess
what, it does.  How could it not?  It's been involved in trying to avoid
them in practice for so long.  Even if it has never "solved the unsolvable
riddle" and we assume them all ideologically intoxicated, much has to have
been learned.  There's a huge literature in "business cycles," looking at
them from all angles, using the tools of statistical and historical
description, techniques of inferential statistics, and modeling -- both,
theoretical and simulation modeling.  But to find specifically where, we
need first to question our comforting thought that just because the
assumptions of modern economics don't conform to ours, everything in it is

Again, if Marx had proceeded on this premise, where would we be?  Look at
the history of Marxist critical political economy after Marx's death.
Except for Hilferding's and Bukharin's response to Bohm Bawerk and a few
recent episodes, when has Marxist critical political economy bothered to
engage fully with the questions posed by conventional economics and the
answers they advance?  The mathematization of economics has made it just
much easier for Marxists to stand at a distance.  There may certainly be
many historical reasons for that, but let's not make virtue out of
necessity.  Marx at least expressed his judgment of contemporary political
economy after a gigantic study of what they had done.  It was his
conclusion, not his premise.

I know, it's going to be next to impossible for me to persuade anyone here
that modern economics does provide important insights into the workings of
capitalism.  The only thing I hope is to persuade someone in the list that
it may.

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