equilibrium

Julio Huato juliohuato at hotmail.com
Thu Sep 25 18:14:27 MDT 2003


Rakesh:

I am under the impression that you don't really read what I write.

I say:

>I say categorically that, to the extent capitalist production replicates
>itself, to the extent it generates the technical and social conditions for
>its repetition, it achieves equilibrium.

You reply:

>No you are not saying *achieves* equilibrium; you are saying that
>equilibrium *is* capitalist production replicating itself.

Well, who says what I say?  You or I?

Look, equilibrium is not a term Samuelson invented.  In its current sense,
it comes at least from the 17th century or so.  I don't accept that because
economists use the concept of equilibrium and top it with the idea that the
equilibrating mechanism is smooth, then the concept of equilibrium is to be
discarded.  In the mere concept of equilibrium, there is nothing that says
that the process leading to it is smooth.

I said:

>Even if the scale doesn't expand or contract and all else stays put, you
>still must have y_I = c_I + c_II and  y_II = v_I + v_II + s_I + s_II.

You reply:

>But you never do have this.

Did you read the conditional?

>I spoke to this; you did not respond.

Let me make this clear.  I don't have to reply to each and every one of the
things you say.  That is not feasible, and -- if it were -- it would lead us
nowhere.  Consider the way you came across my computer monitor the first
time.  Without knowing a bit about me and responding to things I hadn't
said, you rushed to judge my views.  The tone you set was not a good
precedent.

I asked you to read what I had actually written.  But apparently you didn't.
  Instead, you sent me a reply that was very much irrelevant to what I had
said.  You recently called my attention to your reply.  I looked it up.  I
thought at first that I hadn't read it before.  But as I read it, I thought
"maybe I did read it before, but I forgot it."  How come?  Most likely, I
thought then that there was a good chance of escalating the argument into a
flame war.  And, frankly, I'm bored with flame wars that burn and shed no
light.  If we cannot discuss substance, I have two choices: (1) may match
your acrimony but to no good purpose or (2) remain silent.

Here you want to establish that you cited Samuelson and commented on it and
that I didn't respond to your citation immediately.  Well, What do you
imply?  That if I don't respond to each and every statement you make
immediately, then by default I agree with you?  Believe me, that presumption
would be very wrong.

Let me leave it at that.  Keep in mind we are both human.

>Marx does not say that the unit input prices of production should be
>identical to unit output prices of production as they would have to be in
>Samuelson's absurd vision of static equilibrium.

You see, I haven't checked the reference.  But I'm not surprised if
Samuelson stated this.  The reason may be that Samuelson has a notion of
input prices different from that of Marx's.  The rental price of "capital"
is thought of in terms of opportunity cost.  And if you wish to make sense
of Samuelson's argument, then when you read "capital" think of means of
production aggregated in physical terms -- in spite of Sraffa -- and priced
in accordance with their opportunity cost.  The opportunity cost of means of
production owned by capitalists includes the opportunity of exploiting
labor.   In other words, Samuelson's input prices may include some average
profit rate.  That may solve the mystery.

Samuelson may be a bourgeois economist, but we should not assume that he's
stupid.  If one pays close attention to what Samuelson says and to what Marx
wrote, then one may be able to map one thing into another -- in spite of the
ideological fog.  Something like this is what Anwar Shaikh and Ahmet Tonak
did with the categories of the Keynesian national accounting system.  You
mentioned recently Marx's critique (and praise) of Richard Jones on the TSV.
  Note how Marx translates the terms Jones uses into terms that are more
appropriate.  Just because Jones uses the wrong term, Marx doesn't blast
him.  Marx grasps what he really means by that.  Does that mean that by
doing that Marx is swallowing whole a line of Jonesian political economy?  I
would think not.

>To say that the rate of profit over the long run will be more or less the
>same in most sectors (save natural monopoly) does not mean that unit prices
>of production are converging on a fixed point and the economy is verging a
>state as stationary as sitting balls in a bowl.

It depends.  Perhaps stationary in this context means something different
than what you think of as stationary.

>Moreover, just because Marx held prices or values constant in his
>reproduction schema does not mean that he subscribed to Samuelson's
>equilibrium vision.

Marx never read Samuelson.  (Couldn't help it.)

>It's a travesty to me that anyone could think that Marx would not have
>ridiculed this from the second Nobelist:
>
>  Everything depends on everything else, [...] or at least to chase after
>its true position. (p.593-94)

You are entitled to your opinion.

>Julio, you obviously have training as an economist. So this indulgence for
>equilibrium or equation of equilibrium thinking with rigorous thinking is
>probably simply a professional deformation to which only someone very smart
>could be afflicted.

This is the line you should not cross.  It is as simple as the golden rule.
Think of it -- you would also be touchy if I were to impute to you real or
imagined deformations.  So, drop that way of talking to me.  Nothing of
substance can be derived from it.  Assume that readers are adults.  We are
not going to save many souls by discrediting each other.

This is my last posting on this thread.

Best.

Julio

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