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Saturday, January 12, 2013


Tomorrow I shall start posting the paper I mentioned, "The Indexing Problem," in sections.  It should take three days in all to post.  Today, I am going to say a few words about the background of the paper, which is one small part of what I now realize has been a theme of much of my work for more than half a century, and which came to be the central focus of what I think of as my Middle Years -- the late 1970's to the early 1990's.

 As long ago as 1962, I became aware of the many ways in which modes of social analysis, especially as expressed in mathematical form, conceal normative presuppositions, thus passing themselves off as value neutral or objective.  Indeed, I came to believe that this presentation of the normative as value neutral is the distinguishing mark of what is usually called ideology.

My very first attempt to explore this idea took the form of a book manuscript growing out of my deep engagement in the nuclear disarmament movement of the 1950's and 60's.  That manuscript, The Rhetoric of Deterrence, was deemed unpublishable by the presses to which I showed it, but it can be found online at, accessible by following the link at the top of this blog page.  Even at that very early date, when I was not yet thirty, I had begun trying to bring into useful conjunction the insights of philosophy, literary criticism, and mathematical economics.  No doubt this will sound strange, and I am not aware of anyone else, with the notable exception of Karl Marx, who has ever undertaken such a fusion, but to this day I remain convinced that this approach is the only proper way to understand the complexity of human society.  Indeed, it is this, more than anything else, that I have learned from my long engagement with Marx's writings.

In 1975, I offered a graduate course on "The Use and Abuse of Formal Models in Political Philosophy."  My analysis in that course of Robert Nozick's Anarchy, State, and Utopia eventually was published in the Arizona Law Review [see] and my lectures on Rawls' A Theory of Justice appeared with Princeton University Press as Understanding Rawls.  I argued that Nozick and Rawls used the formalism of Game Theory to lend an air of objectivity to what were, in both cases, unacknowledged and inadequately defended normative presuppositions. 

Two years later, I offered a graduate seminar on "Classics of Critical Social Theory," devoted to  works by Marx, Freud, and Mannheim.  In preparation for the seminar, I re-read Volume One of Capital, which I had first read in 1960 in preparation for a Sophomore tutorial at Harvard that I was co-teaching with Barrington Moore, Jr.  Reading Capital this time around was a revelatory experience.  I had what I can only describe as an eclairecissement, a sudden insight into the rich complexity of Marx's analysis of capitalist economy and society.  It seemed to me that there was an essential connection, never adequately understood by his commentators and disciples, between Marx's formal economic analysis of capitalism, his critique of the mystifying forms and appearances of bourgeois society, and the extraordinary language in which he expressed his insights, language that stood in marked contrast to the language of the Classical Political Economists [the Physiocrats, Smith, Ricardo] whom Marx conceived himself to be both building on and subjecting to critique.

With great good fortune, I had a one-semester sabbatical leave in the Spring of 1978 [one of only three sabbatical leaves in my fifty years of teaching].  After a month spent teaching myself Linear Algebra, I launched on an intensive study of mathematical economics, concentrating on a series of brilliant books written by a world-wide network of economists devoted to rendering Marx's insights in modern mathematical form.  Rather quickly, I formulated a grand plan for a systematic reinterpretation of Marx's economic theories, bringing into fruitful conjunction philosophical, mathematical, economic, literary, historical, and sociological methods and insights.  I began reading widely in the voluminous writings of Marx and Friederich Engels, including not only such juvenile works as The Holy Family [a real hoot, if you have a taste for a send-up of Hegel] but also volume after volume of the letters Marx and Engels exchanged over the many years of their collaboration.

Eventually, I decided to sort my thoughts out in the form of a trilogy [my first wife and my good friend Robert Ackermann persuaded me that there was not much of a market for a single book that was half literary criticism and half mathematical economics.]  The first volume in the projected series was Understanding Marx, my reconstruction and simplification of the mathematical economists' rendering of Capital.  The second volume, delivered at UMass as a series of Romanell-Phi Beta Kappa lectures, appeared as Moneybags Must Be So Lucky. 

But Moneybags, if I may appropriate the lovely phrase of David Hume, fell stillborn from the presses.  No one reviewed it and no one read it, so far as I could make out.  By now, America had gone through eight years of Reagan, and whatever transformative impulse had ever existed in the late 60's and 70's was extinguished.  My disappointment was such that I never wrote the third volume of the trilogy, in which I had intended to draw together the themes of the first two volumes and lay out their interconnections.

In the late eighties, however, as Moneybags was being written, I did begin work on that third volume, and odd though it may sound, my first task was to carry out a careful study of the history of the development of index numbers.  Index numbers?  Why index numbers?  Indeed, what are index numbers?

What, first.  Index numbers are one-dimensional measures of a multi-dimensional aggregate.  The Consumer Price Index is an index number.  The Unemployment Rate is an index number.  A brief explanation, for those to whom this is not, as the saying goes, mother's milk.  There are thousands upon thousands of commodities offered regularly in markets, and their prices vary a good deal from day to day or year to year.  A loaf of bread [but then, there are countless kinds and brands of bread], a jug of wine [Merlot, Cabernet, Sauvignon Blanc?], and even thou [sex being, after all, a commodity with its market price.]  The prices of commodities do not move in lockstep.  From Monday to Tuesday, grapes may go up, bread may go down, and Corn Flakes may remain unchanged in price.  What, if anything, can we say about "the movement of prices" in the face of such complexity of fluctuation?  The answer is an Index.  Economists, after careful study of consumer behavior, design an imaginary market basket of goods and services meant to reflect the "typical" or "average" or "customary" mix of items that consumers spend their money on.  They then sample prices at a large number of retail stores to discover what that notional market basket would cost on a given day.  Changes in that price are said then to reveal "the movement of prices."  If the price of a market basket of goods and services increases by 3% from last January 12th to today, while the goods and services themselves remain unchanged in quality and quantity, then prices are said to have undergone a 3% rise, and the headlines the next day read "inflation running at 3%."

Now, it takes very little wit at all to realize that an index of this sort has a great deal of arbitrariness built into it.  There are in fact probably very few households that spend their money for just precisely the collection of goods and services in the economist's notional market basket.  If meat prices soar, do vegetarians experience sharp inflation?  Presumably not.  If I own my own home and have no intention of moving, peaks and valleys in housing prices are without significance to me. 

Strange as it may sound, this commonplace observation, suitably expanded and complicated, holds the key to the proper analysis of the ideological encoding of our cognitive appropriation of social reality.  [God, don't you just love to write phrases like that?]  Eventually, I came to the conclusion that there is no social reality that is objective, value-neutral, and independent of our ideological representations.  Because society is a collective human product, and because we unavoidably employ concepts in appropriating that social reality that are normatively encoded, society itself is inevitably mystified.  Even those of us who have fought our way to a knowledge of this fact are incapable of separating ourselves from our ideological awareness.  Not even Marx, had he lived to see a socialist society [from my mouth to God's ear!], could ever have managed to experience society as other than mystified.

Well, all of that is the background to the little paper I am going to start posting tomorrow, a paper I wrote in 1985 just when I was giving the Romanell-Phi Beta Kappa Lectures.


Don Schneier said...
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Don Schneier said...

Is the proposition "there is no social reality that is objective, value-neutral, and independent of our ideological representations" itself ideological, or does it entail the thesis of the existence of a non-social reality?

Magpie said...
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Magpie said...
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Magpie said...
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Magpie said...

(Sorry for posting and deleting, but there was a "stubborn" typo or the comment was too long)

I'm looking forward to this series of articles. I find the way Prof. Wolff combines serious stuff with everyday stuff captivating.

"I argued that Nozick and Rawls used the formalism of Game Theory to lend an air of objectivity to what were, in both cases, unacknowledged and inadequately defended normative presuppositions."

I think I know what you mean. I myself I'm currently reading a lot and in the process I stumbled upon a very interesting article from the defunct History of Economic Thought website (one can find it at the Internet Archive, and there are several copies floating around on the net).

The article is entitled "Cantillon's Land Theory of Value", which is supposedly a rendition, in simple mathematical form, of the doctrines of Cantillon.

It states: "In this long-run, Cantillon is careful to note that there will naturally have to also be no profits. His time horizon is long enough that firms will be created and enter and exit production so as to wipe out any profit opportunities."

A few lines later, it presents the following two equations:

p[N]*X[N] = w*L[N] + t*T[N]

p[U]*X[U] = w*L[U] + t*T[U]

The brackets denote subindexes.

In the LHS, p are prices, subindexes are N is for workers' consumption goods and U for landowners' consumption goods; X are physical quantities of each class of consumption good.

In the RHS, L are counts of workers; the w are individual workers' wages, t is rent per area, T is the agricultural land surface.

One can see that there is no term labelled "profit" in those equations. Therefore, for Cantillon (and presumably the author of the article), there is no profit.

But reading the article (or even paying attention to what the 2 equations above show) one sees that workers, well, do all the work. At the other hand, other than renting their property and consuming the surplus of what the agricultural workers produce, the landowners do nothing.

If the angel of the Lord came and exterminated the landowners as he supposedly did with the firstborn of the Egyptians, nobody would notice anything, except that now workers would have much more to consume.

How come there is no profit? Cantillon, at least as rendered in this article, creates a distinction between profits and rents. But that distinction is never justified in the text and possibly in Cantillon's mind.

From a Marxist perspective, this distinction is an artificial one.

An opposer to Marx's thought could retort that this is problem only for a Marxist. But in this case she would need to acknowledge that at least Marxists have an explicit argument to object the distinction profit/rent.

Cantillon, as rendered in the article, offers no argument to distinguish rent from profit.

Kenneth Tiong said...

As someone who has read your book Moneybags, when do you plan to release the substance of Part 3?

Robert Paul Wolff said...

I am a bit distracted, because my wife fell while on a walk and fractured her shoulder, which in a womn about to turn eighty is rather serious. It is all I can do to keep things afloat and post this material.

briefly, the odd thing about general equilibrium theories isw that there is no profit, as opposed to a rate of interest. Competition reduces the profitr rate to zero. This is, mathematically, exactly the same case as that in which Ruler's theorem about linear homogeneous functions applies, which is to say it is equivalent to the case in which labor and capital are paid their marginal product. Long story.

Kenneth, I do not know,. I have not written it, ave in many different pieces that have appeared here and there. It wojuld be an enormous undertaking to wrote anlother book, and I cannot imagine anyone would want to read it [except for you, maybe. :) ]

Will said...


All of the classical economists considered rent and profits to be fundamentally different kinds of income streams, and treated them differently. Because landlords and capitalists were, at the time, two distinct classes vying for political power, economists cared which class benefited more from any given measure. The thesis that over time, profit would disappear and all the surplus would go to rent was widely shared (more recently, Schumpeter and Keynes both worried along these lines as well).

Marx also treats profits and rents separately (rents don't enter the picture until volume 3 of Capital). He presents rent as a diversion, or "transformation", of a portion of the surplus value produced. However, he also notes that over time, land and capital become "fused" -- capitalists make enough money to buy up landed estates, and so the revenue streams become joined.

wallyverr said...

Not completely unread and unreviewed. The unique and unclassifiable George Scialabba wrote an 800-word review, originally published in the Village Voice Literary Supplement and available on his website:

His closing paragraph starts:
"Wolff is a Marxist and an academic philosopher yet he also has a sense of humor and can write. The improbability of all these things being true of the same person is incalculable."

Robert Paul Wolff said...

Wallyverr, I actually saw that review [the only one, I think] and sent him a thank you note. It warmed my heart. Perhaps one good review is worth a thousand mentions. Since I care more about writing well than just about anything else, the review really touched me.