On September 6th, after I
bemoaned the lack of things to blog about, Chris asked me whether I might do a
tutorial on Volume III of CAPITAL. I
responded with a post on the 10th briefly explaining why I did not think it
would be much fun, and Chris immediately took exception to my explanation,
citing and giving links to videos of lectures by Andrew Kliman, as well as to
some publications. I am currently very
busy with my Bennett project, and I simply do not have the time to watch the
videos from start to finish and read the works referenced, so that I can give a
serious reply. But it seems to me I owe
Chris some answer, however fragmentary, so here goes.
As I suspected, Kliman is
a student or follower of Richard Wolff and Steven Resnick, both of them old
friends of mine from the UMass Economics Department. Rick and Steve have for more than thirty
years been developing and teaching a systematic interpretation of Marx's economic
theories. In true academic fashion, they
have published books and articles, trained students, organized annual conferences, started a journal, and
done all the other things that we do in the Academy to advance our views. I have enormous respect both for their work
and for their dedication and energy, even though I do not agree with them about
a number of things. Our specific
disagreement over the so-called Transformation Problem is rather technical, but
at the risk of losing everyone but Chris, I will spend a few paragraphs
explaining what is at stake.
I have argued in my
published writings on Marx and also on this blog that in CAPITAL, Volume I,
Marx assumes equal organic composition of capital, only relaxing this
assumption in Volumes II and III. Since
Ricardo's version of the Labor Theory of Value is correct only under this
severe constraint [as Ricardo himself was aware], this assumption allows Marx
to focus on what he considers the more fundamental question that Ricardo cannot
answer even in the special case in which his theory is true, namely why there
is a positive rate of profit in a capitalist economy. Marx then introduces his distinction between
labor and labor power to solve the problem, demonstrating thereby that
capitalism rests essentially on the exploitation of the working class.
Mathematically speaking,
the arguments by which the various propositions of Volume I are demonstrated --
at least on my interpretation of the book -- presuppose that competition
establishes a uniform rate of profit throughout the economy. It is this assumption that yields the
conclusion that input and output prices are identical for a given
commodity. This way of analyzing things,
which Kliman correctly labels a "simultaneous" approach, is widely
adopted in the large international literature written by contemporary
mathematical economists interested in casting Marx's arguments in modern
dress. I am a big fan of this approach.
However, there is an
alternative way of reading Volume I. If
you give up the assumption that competition equilibrates the system by
establishing a single economy-wide profit rate, then you can represent Marx's
analysis as approaching such a uniform profit rate over time by way of a series
of adjustments on the part of capitalists to the information presented by the
market. In that analysis, input and
output prices are not identical. This is not a simultaneous analysis, but a
temporal analysis.
But I believe that the
end result of these two modes of analysis is the same. The same relationships emerge between labor
values and prices, and the same divergences of prices from labor values appear,
which must be explained and analyzed by the same arguments that Marx invokes in
Volume III. So I do not see how adopting
Kliman's approach alters, in the end, our understanding either of capitalist
economies or of Marx's text.
The second question, on
which I am afraid I have nothing at all to say, is the dispute over Marx's
claim that there is a tendency for the rate of profit to fall as more capital
intensive techniques are introduced. I
would have to read, or else watch on video, Kliman's analysis of that dispute,
and I just have not done so yet.
Chris, I hope this at
least demonstrates that I take your comments seriously, even if I am not now in
a position to respond to them fully.
6 comments:
Yup, thank you!
Also, I don't know if Kliman is a follower or student of Resnick and Wolff. In the intro to his book he remarks how he took up this position I believe in Utah, during graduate and phd studies. The age discrepancy between Resnick and Kilman makes it unlikely that he had followed their work.
In all fairness as a Sraffian I find a lot of the discussion about the transformation problem puzzling. At any rate, Gary Mongiovi has published a paper in which he conclusively shows the non-Marxist (in fact, vulgar) elements in the so-called Temporal Single Approach of Kliman and Co. Link here http://www.iwgvt.org/files/02-mongiovi.doc
I also recommend the paper by Fabio Petri here http://www.econ-pol.unisi.it/quaderni/643.pdf. I have discussed some of these issues here http://nakedkeynesianism.blogspot.com/2012/08/sraffa-and-marxism-or-labor-theory-of.html
The equal rate of profit condition does not imply that input and output prices are equal. It rather implies that the percentage difference between input and output prices is equal. Thus, the assumption that rates of profit are equal provides no warrant for imposing the constraint (which Marx did not impose) that input and outpur prices are equal.
The equal rate of profit condition does not imply that input and output prices are equal. It rather implies that the percentage difference between input and output prices is equal. Thus, the assumption that rates of profit are equal provides no warrant for imposing the constraint (which Marx did not impose) that input and outpur prices are equal.
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