Dealing with "Problems" in Marxist Economics

[ComradeRed]

I have been studying recently Das Kapital, Vol. I, and I had read somewhere that since Marx's death there has been a lot (well over thousands) of changes. I thought that this would be a good place to get the problems resolved.

For starters: what is service? I attempted to answer this myself. I noted that Marx declares in Chapter one, part one (the factors of the commodity) that "The commodity is, first of all, an external object, a thing which through its qualities satisfies human needs of whatever kind, whether they arise, for example, from the stomach, or the imagination, makes no difference. Nor does it matter here how the thing satisfies man's need, whether directly as a means of subsistence, i.e. an object of consumption, or indirectly as a means of production. Every useful thing, for example, iron, paper, etc., may be looked at from two points of quality and quantity." Well, service may be looked upon with quatity and quality. For example, it doesn't matter if an army is armed with sticks if there are millions of them for they would be just as powerful as one consisting of a few dozen armed with automatic weaponry.

Likewise, it doesn't matter if it is a couple five star restaurant or billions of McDonalds, they both require approximately the same labor. Expert Chefs arduously preparing expensive foods and teenagers putting patties into a microwave, both exert different quality labor. The summed labor of the teenagers is xW and the same goes for the chefs.

Service can mean anything! Be it a symphony playing or a hair stylist joint in business, it can be anything. It serves a purpose either for the stomach (restaurants) or the imagination (book store, symphony, etc.). Ergo, it qualifies in Dr. Marx's definition of commodity.

[Misodoctakleidist]

I think you've misunderstood, the quality and quantity he's refering to are different aspects of value. Utility or use-value is the qualititive aspect and exchange-value is the quantative aspect.

It doesn't sound like you've read very much of it but once you get to around page 20 this will make sense.

[percept¡on]

I don't feel like breaking this down in any kind of depth right now, but I will say that one of the differences between services and the production of commodities is that most services are "unproductive" - they don't contribute to the overall wealth of society.

[ComradeRed]

I thought that a service was basically a "type" of commodity. I suppose the real commodity would be the labor power itself, in the form of services.

Services, the more I think about it, is a pseudo-commodity in order to keep the american economy running. Afterall, the Americans did export most labor needed to sweat shops, yet who would purchase the commodities made? That was the entire reason there is services.

But is service a commodity? Kinda, sort of, maybe. It is the closest commodity to represent labor power in its entirety.

Maybe I should read up on vol. II and III before I delve further into this :unsure:

[Morpheus]

The Labor Theory of Value has been discredited. See "Debunking Economics" by Steve Keen for a good refutation of it.

[Misodoctakleidist]

Do you have a link Morpheus? I looked for it on the internet a while ago but i couldn't find it.

[Morpheus]

No, it's a book. There are excepts at http://www.debunking-economics.com/ but not the full book. Try your library, maybe use interlibrary loan.

[Essential Insignificance]

I have recently read Debunking Economics; a good refutation, it is not--most unquestionably.

Mr. Keen, I think, has allowed his personal opinions to creep into his "scientific" manuscript; his whole dialogue has a general tone of detestation, and more then anything--fear, of the eventual downfall of capitalism with the replacement of socialism.

He openly, just dismisses Marx and present day Marxist economist; without all that much evidence. Often resorting to the feeblest of squabbles over current day Marxist.

His writings of Marx's Labor Theory of Value are incredibly diminutive; and actually makes lucid, very little. A good deal of the text is spent actually explaining Marx's hypothesis.

His main argument is Marx's economics have "major" logical flaws.

I don't think it was adequate enough to be counted as a "good" repudiation.

"Capitalism has no reason to fear them"--in reference to revolutionaries.

[ComradeRed]

Dang I want that book! I can only find it on Amazon.com and I can't afford it from there!

[SteveKeen]

Originally posted by Essential [email protected] 17 2004, 09:33 AM
I have recently read Debunking Economics; a good refutation, it is not--most unquestionably.

Mr. Keen, I think, has allowed his personal opinions to creep into his "scientific" manuscript; his whole dialogue has a general tone of detestation, and more then anything--fear, of the eventual downfall of capitalism with the replacement of socialism.

He openly, just dismisses Marx and present day Marxist economist; without all that much evidence. Often resorting to the feeblest of squabbles over current day Marxist.

His writings of Marx's Labor Theory of Value are incredibly diminutive; and actually makes lucid, very little. A good deal of the text is spent actually explaining Marx's hypothesis.

His main argument is Marx's economics have "major" logical flaws.

I don't think it was adequate enough to be counted as a "good" repudiation.

"Capitalism has no reason to fear them"--in reference to revolutionaries.
I normally don't get engaged in these discussions--otherwise I'd have the time to do nothing else--but I couldn't let those comments about my refutation of the labor theory of value go unchallenged.

The tone I used in Debunking Economics was deliberately light--in the sections critiquing neoclassical economics as well as the sole chapter on Marx--and that might be why you find a "general tone of detestation". That is an aeon from how I feel about Marx, whom I continue to regard as the greatest economist who ever lived.

He did, however, make intellectual errors, the chief one that concerns me being clinging to the labor theory of value when he actually developed a far superior form of analysis that (coincidentally) refuted one aspect of that theory, that non-labor inputs to production cannot produce a surplus.

The document is linked on my debunking economics home page, and you are welcome to distribute it as you see fit. I don't think you'll find a "general tone of detestation" there.

Debunking Economics (http://www.debunking-economics.com)

Cheers,
Steve Keen

[Snitza]

I wonder if that's really him, or just some clown pretending. Does it really matter? He/she/it(!) hasn't told us much more.

[Essential Insignificance]

I wonder if that's really him, or just some clown pretending.

That's what I have been wondering.

Perhaps someone from Che-lives emailed him, and asked him to "drop" in and "shed some light" on his book and theories, with us "amateurs".

There's one "mistake" that I spotted, however.

His spelling of "labor". The author is Australian and Australians spell labor--"labour".

I think I've caught a phony. :lol:

[Misodoctakleidist]

The Australian "labor" party don't use the "u" although they used to.

[Essential Insignificance]

I have realized that; perhaps it can be attributed to being in a different context.

In Steve keen's book, nevertheless, it is spelt "labour".

[SteveKeen]

Originally posted by Essential [email protected] 18 2004, 12:07 PM
I have realized that; perhaps it can be attributed to being in a different context.

In Steve keen's book, nevertheless, it is spelt "labour".
:D Well, at least you guys have given me a good laugh!

Yes it is me. To confirm (and end any further attempts to divine my identity via semiotics), I've put an obvious reference on the index page of the Debunking Economics (http://www.debunking-economics.com) website.

My post this morning (my Australian time) was a bit hasty. I meant to say that I have posted a long (114 page) thesis on Marx. If you wish to discuss whether I have or have not refuted the labor theory of value to your satisfaction, that's the document to refer to--the single chapter in Debunking Economics was for a more general audience.

The direct link is here. (http://www.debunking-economics.com/Papers/Marx/Keen_Marx_Thesis.pdf)

That thesis has not been published, but two papers from it were published in the US journal The History of Economic Thought in 1993.

And on the linguistic front, I write so often for US journals that I switch between US and non-US English almost at whim. Since your list is presumably in the Americas, I went with American usage for the previous post. As it happens, I stuck with English/Australian usage in Debunking Economics.

Cheers,
Steve Keen

[SteveKeen]

PS I neglected to mention that I monitor where people link to my website from, mainly for the purpose of building a case for a second edition at some stage with a different publisher. That's how I knew of the discussion.

I have also in the past been very active in discussions on Marx on the web--mainly in the forum known as OPE-L. I have long ago ceased being active because of lack of time. But this time I couldn't resist butting in. Hope you don't mind.

[ComradeRed]

You scared the bajeebas out of me, Mr. Keen, as I had no idea where you were coming from :lol:

At any rate, that's some good stuff Mr. Keen has on his site about Marxist economics (more specifically his thesis). After I study up on Capital, vol. II and III I'll write a little critique about it... so you'll see it in about ten years :lol:

[wet blanket]

KEEN! Your appearance has turned me on to your book... I am definitely buying it, that'll be some good reading while taking ECON101 in my first semester. :lol: Anyway, I've begun to read your thesis on Marx as well.

For those interested in what this guy was talking about, the OPE-L discussions he was talking about.

"OPE-L (Outline on Political Economy list) is a small, closed list of Marxists who have been discussing controversial issues in political economy since September, 1995."
http://archives.econ.utah.edu/archives/ope-l/
Rather intriguing stuff.

[SteveKeen]

Thanks ComradeRed & Wet Blanket.

If anyone want to look at other critical but sympathetic works on Marx's economics, the two I'd most recommend are Arun Bose's Marx on Inequality & Exploitation and Gavin Kiching's Marxism & Science. The bibliograhy to my thesis also gives a wealth of discourse--though somewhat dated now since it was written in 1990.

[percept¡on]

Well dammit you've piqued my interest as well. I glanced at your thesis and it seems like a worthwhile read. I have a BA in economics so I love to get my hands on literature dealing with 'alternative' economic theories... if the thesis impresses me I'll probably buy the book. Anything that gives me ammunition to *****-slap brainwashed Friedmanites and neoliberals at the college is worth my $20.

[Severian]

Originally posted by [email protected] 18 2004, 06:38 AM
My post this morning (my Australian time) was a bit hasty. I meant to say that I have posted a long (114 page) thesis on Marx. If you wish to discuss whether I have or have not refuted the labor theory of value to your satisfaction, that's the document to refer to--the single chapter in Debunking Economics was for a more general audience.

The direct link is here. (http://www.debunking-economics.com/Papers/Marx/Keen_Marx_Thesis.pdf)


Uff da.

My experience so far is that no academic writer on Marx understands the first thing about his ideas, and can't discuss them without making the kind of boneheaded mistakes that make ya wonder if they ever actually read the first chapter in Capital. I've even heard professors commit obvious howlers like "Marx is the world's most quoted academic writer." (Which may well contain the seed of most of their other errors...but anyway.)

I've looked through far too much of Keen's thesis, and it's clear he's no exception to the rule. First, I had to get to page 89 before he finally starts listing Marx's supposed logical errors. If the core of someone's argument has to be buried that deeply, it's usually because it can't stand up under scrutiny.

OK, Marx's supposed logical error #1, an alleged self-contradiction: "Hence he made the incorrect step from saying that no one commodity could be the opposite of capital—and hence the one thing which “increases, multiplies and hence preserves it”—to saying that labour was that sole commodity."

Extracted from paragraphs of obfuscating verbiage, but that one sentence gives Keen's whole actual argument. It's based on a typical academic boneheaded misreading of Marx - who clearly explained, right near the beginning of Capital, that labor was not a commodity. Rather, labor-power is. No self-contradiction. Next!

Marx's supposed logical error #2: also an alleged self-contradiction, also based on conflating labor and labor-power. Contains the sentence: "He soon solves this dilemma by reasoning that the value that labour adds in production is greater than the value the capitalist paid for it—or in other words, that the use-value of labour is greater than its exchange value." Which higlights exactly why Marx distinguished between labor and labor-power - under the labor theory of value, the "exchange value of labor" would be nonsense equivalent to "the price of money". (Yes, I know, one country's currency can have a price in another, that's not what I'm talking about here.)

Marx's supposed logical error#3: based on a misreading of the sentence "The reason why means of production do not lose their value, at the same time that they lose their use-value, is this: they lose in the labour process the original form of their use-value, only to assume in the product the form of a new use-value…"

Doesn't have to mean that use-value is carried through, only that exchange-value is carried through, and takes a new use-value form in the product.

Marx's supposed logical error#4: Wait, where is it? Keen starts out section5.2.4 promising 4 logical errors, but there only 3 subsections. Whatever.

Enough. It's all word games and a priori reasoning.

What would be more useful, in evaluating Marx's theory vs Keen's and others, would be empirical data...on change in the average rate of profit over time, for example. It'd probably be difficult to compile, be debatable based on assumptions in defining the questions, etc...but it'd be more useful and interesting to argue over, at least.

Incidentally, there is an implied political conclusion to Keen's theory: "lastly, that the ideological power of Marxian economics is necessarily altered by these revisions. However while Marxism ceases to be a doctrine which is automatically supportive of the overthrow of capitalism, it remains critical of capitalism, and supportive of class struggle over the division of the surplus."

What'd Essential Insignificance say "his whole dialogue has a general tone of detestation, and more then anything--fear, of the eventual downfall of capitalism with the replacement of socialism. " Keen's reply that he doesn't detest Marx's economic theory seems even more evasive in light of the political conclusion I quoted from his thesis.

[ComradeRed]

Hmmm...what is it exactly that the service industry, according to bourgeois economics, do?

[Essential Insignificance]

I think Steve Keen has been refuted, by Severian's post. I have personally observed Keen visit this thread twice subsequent Severian's post...yet no reply. :lol:

[SteveKeen]

Originally posted by Essential [email protected] 26 2004, 01:26 AM
I think Steve Keen has been refuted, by Severian's post. I have personally observed Keen visit this thread twice subsequent Severian's post...yet no reply. :lol:
I havent' seen the need to reply because I was hardly impressed with the calibre of Severian's "rebuttal".

The one substantive component of that was the comment that I had confused labor and labor power in the sentence about the creation of value. In fact, if you read the original Grundrisse, you will see a similar usage in the passage I was quoting: “as commodities and hence exchange values, is this, that they are objectified labour… The only use-value, therefore, which can form the opposite pole to capital is labour."

Severian didn't even set out an iota of the basis of my critique--which is the proposition that the dialectic between use-value and exchange-value became Marx's fundamental analytic tool after the Grundrisse, and that properly applied, this analysis contradicts the proposition that labor is the only source of surplus value.

And a criticism for the fact that I took 89 pages to set out the argument before stating the critique? Firstly I was being bloody careful to read and present a century of Marxist debate on the topic--apparently being careful is a mistake? Secondly--speaking of being careful--my application of the above logic, and therefore my critique, starts on page 67, not 89.

The rest of his argument was so rhetorical and ad hominem that I thought perhaps this wasn't a Marxist site at all, but a post-modernism one.

Don't mistake silence (at least from me) for conceding an argument.

[ComradeRed]

Wait, woah woah woah!!! I just figured it out, the service industry in marxist economic terms! Okay, there is a raw commodity given and the service turns it into a finished one. The service is of course labor, as most service jobs are specialized. Take, for example, a manucurist (spel?) who works with nails. The raw good is the nails on the hand and foot, the finished after the labor is the "better" nails.

It works for most industries. With the exception of the economist, which I woldn't know what s/he does.

[ComradeRed]

Most of the proletarians in the service industry are labor aristocrats (http://redstar2000papers.fightcapitalism.net/theory.php?subaction=showfull&id=1083626854&archive=&cnshow=headlines&start_from=&ucat=&)