A RESPONSE TO PROFESSORS FREEMAN AND KLIMAN AND MR. BYRON

I have failed to find a way to put on this blog the essay written by Professors Freeman and Kliman and Mr. Byron, so I must simply post the link once more, invite all of you to read what they have written, after which you should read my response.  The essay can be found here.

              Response to Professors Freeman and Kliman and Mr. Byron

Mr. Chris Byron and Professors Alan Freeman and Andrew Kliman have written a seven page critique of my critique of Marx's Labor Theory of Value entitled "Physicalism and the Exploitation Theory of Profit are Incompatible: A Response to Robert Paul Wolff."  In what follows, I shall comment on their essay and do my best to reply specifically to the example they construct as a demonstration that my statements are false.  I am going to proceed as follows:  First, I shall make some general remarks about the dispute;  Second, I shall address myself in detail to their counter-example;  and Third, I shall close with a final remark.

I.  Some Introductory Remarks 

Let me begin by thanking the three authors for taking the time and putting in the effort to write their response to me.  Professors Freeman and Kliman are senior distinguished professional economists, and Chris Byron is a very bright young graduate Philosophy student.  All three of them obviously have better things to do than rebut the claims of an aging amateur, and I am grateful to them. 

It should be obvious to anyone reading their essay that I have managed to irritate Byron, Freeman, and Kliman, and I am really sorry about that.  I have not read either the six articles or the book authored by them and listed in their bibliography, but here is my impression of the situation.  Kliman, Freeman, and others have been engaged for some years in an ongoing argument with a number of economists whom they identify as backing the "physical quantities approach of Sraffa."  They have, they believe, decisively refuted the claims of those authors a number of times, and they are just a little ticked off when I wander onto the scene like Pierre at the Battle of Borodino and announce that I have written a book and an article that no one has refuted.  Freeman and Kliman, they tell us, embrace a "temporal single-system interpretation of Marx's value theory" which shows, as I understand it, that Marx did not contradict himself. 

Now, this is a hunt in which I do not have a dog, as they say down here in North Carolina.  First of all, I do not think Marx contradicted himself.  I think many of Marx's claims are true.  I just don't think his way of expounding and demonstrating them succeeds, for the reason I give in my essay, and I therefore try to find in Marx's own writings an alternative way of capturing what I take to be his foundational claim, that capitalism rests on the exploitation of the working class.  I may be all wet, but if so, I am so in a manner different from that of the Sraffian physicalists [from whom, let me be clear, I have learned a great deal.]

In particular, I have no fixed opinion on Marx's claim that there is a tendency, as capitalism develops, for the rate of profit to fall.  This, unless I am mistaken, is a question of great importance to Kliman and Freeman, one on which they have written extensively [or so I gather].  For all I know, they are right in this debate and Okishio is wrong.  But that is something I have not written about, and it really is not a part of what I was trying to get at in my essay.

I know that Professors Freeman and Kliman have read my essay, because they list it in their bibliography, but to my great regret they have chosen not to address any of the arguments in the second part of it, which I have always thought of, rather proudly, as my one stab at saying anything original about economics.  John Roemer did address that part of the essay in a response he wrote right after it was published.  I had presented a little mathematics to show that exploitation takes place because the workers, divorced from the means of production, have no choice but to sell their labor to capitalists.  John, whose command of mathematics is to mine as Pinchas Zuckerman's playing of the viola is to mine, offered a lengthy, detailed, and very deep critique and analysis of my argument, which in my opinion takes things a great deal farther than I was able to.  With his agreement, I have reproduced John's essay in Volume II of my Collected Papers, available as an e-book from Amazon.com.

Finally, let me withdraw the remarks I made about religion at the end of my blog post, remarks that captured the attention of Kliman and Freeman.  I most certainly was not referring to them, and however relaxed the standards of discourse may be on blogs, I had no business saying something that might even conceivably be construed as directed at them or their position.  So, let us just say that I apologize and withdraw them.  My bad.

II.  Botox and Gummi Bears

Now let us get down to the meat of the essay by Professors Freeman and Kliman [Chris Byron tells me that he did not have a hand in the mathematics.]  Following a long and honorable tradition in economic theory, they have constructed a counter-example that bears no conceivable relation to the real world.  But that is in no way an objection to their counter-example.  As they quite correctly point out, when someone has advanced a universal proposition, any genuine counter-example, no matter how outré, is sufficient to refute the proposition.

Since some of you may be unfamiliar with this habit of economists, it might help you [though it adds nothing to the argument] to tell a little story with the example.  So, let us suppose that workers eat nothing but Gummi Bears, hence their rotting teeth, and periodically give themselves Botox shots, which explains why they all have fixed smiles on their faces even though they are being screwed by the capitalists.

Take a look at Tables 1 and 2 in the Kliman/Freeman/Byron paper.  This is a little model they have constructed for which my claims hold.  But the existence of a case in which my claims are correct proves nothing about the truth of my claims, as they point out, because I made a universal claim.  They accurately quote me as asserting that my claims are true "so long as the system as a whole produces some sort of physical surplus in each cycle over and above what is required to run the system for another year.... In order for this to be true, it is not necessary that there be a surplus of X in the system each year" where X is the input arbitrarily chosen to serve as "substance of value" in my value calculations.

So now comes the crusher, Table 3.  Professors Kliman and Freeman carry out the Botox-value calculations for this new model [Botox here having been chosen as the X], and discover that in this system, the total profit is actually negative!  Good grief, as Charlie Brown would say.  Is that the end of the story?  Professors Kliman and Freeman certainly think so.  On the very next line after they have demonstrated a negative profit in the system described by Table 3, they write Q. E. D.  After that, there is nothing more to be done but what a Special Forces unit might call mopping up.

But wait.  Let us take a closer look at Table 3.  After all, the prospect of a hanging does concentrate the attention.  If you examine the numbers carefully, you will notice that in the economy described in Table 3, 980 units of Gummi Bears are required as inputs, but only 900 units of Gummi Bears are produced as output.  This is very definitely not a system which produces "what is required to run the system for another year," as Kliman and Freeman accurately quote me as stipulating.  Even if the workers just live on Botox injections, there are not enough Gummi Bears to operate the system at the same level in the next cycle.  So the entire system will have to be contracted.  But there will still not be enough Gummi Bears in the next cycle after that so the system will shrink even more.  It will, in fact, be in a death spiral.  It will not be a self-reproducing system.  That is why I added the standard proviso that the system produce "what is required to run the system for another year."

All right, so they made a little mistake.  It is not as though they were trying to capture some feature of the real world in their example.  I mean, who has ever seen an economy of nothing but Gummi Bears and Botox?  Surely they can just tweak their numbers a bit so that the system is capable of reproducing itself, and then go on to prove the same crushing counter-example, right?

Well, um, no.  As a matter of fact [or, to be more precise, as a matter of mathematics], they cannot do that, because it is impossible.  So long as the system "as a whole produces some sort of physical surplus in each cycle over and above what is required to run the system for another year," all the prices will be positive, the amount and rate of profit will be positive, the surplus value will be positive, and all the values calculated, be they labor values, Gummi Bear values, or Botox values, will be positive.  Those who have a stomach for this sort of thing will find the formal mathematical proofs in my book, Understanding Marx, in Appendix A, Section IV [pages 187-191] and Section V, pages 205-6.

Does this show that I am right and Kliman and Freeman are wrong?  Good heavens, no!  It just shows that they have [as yet] failed to refute the claims I actually made in my book and essay.  Mind you, they may very well have refuted the people they have been arguing against for years.  About that much more important matter, I haven't a clue.

III.  Final Remark

To be honest, the truth of the claims I made thirty-three years ago is not the most important thing in the world to me.  I care a great deal more about the misery and poverty in the midst of obscene wealth that is the defining mark of capitalism.  I suspect the same could be said for Chris Byron, Andrew Kliman, and Alan Freeman.  Chris Byron is a young man, and he may yet get a chance to break a lance for the rectification of that injustice.  I am an old man, and Kliman and Freeman are no spring chickens, so we have probably seen our last hurrah, but if by some happenstance I should find myself at the barricades, I have no doubt that I will find them there as well, on the same side of the cobble stones, facing our common enemies.  They are my comrades in a world where there are all too few of us, so let us agree to continue our debates with good cheer, and hope for the day when we will have something better to do.