Questions on economics

[manic expression]

OK, I've had a few discussions with my economics professor, and I wanted to hear some reflections on what s/he said.

1.) S/he stated that prices are determined by the consumer's willingness to buy them. I argued that it is determined by the cost of production, for no one is going to sell something for less than it costs to make it (for long). IIRC, s/he responded that people will only produce something if they think they can get a profit for it depending on the consumers' willingness. However, I think that this expectation is ultimately tied to what the cost of production is.

2.) S/he stated that everyone has choices in an economy. However, I said that choices increase with someone's wealth (in essence, workers have little choices, and the choices are between exploitation and poverty/starvation).

3.) S/he argued that competition and exploitation benefits both parties, but I responded that it is the degree to which each party is exploited (for example, workers in Vietnam are getting very little from their employers while their employers are getting a great deal from them).

Those are a few points, and I'd like to hear what you all have to say about them.

[gilhyle]

Originally posted by manic [email protected] 01, 2007 07:18 pm
Id I'd like to hear what you all have to say about them.
1. She is right. You are wrong. Participants in an economy often sell products below cost price. This has nothing to do with the Marxist argument that price reflects value.

2.You are right she is wrong: many people have such slight choices that the sense in which they have choices is not significantly greater than in a command economy. YOu always have the choice to kill yourself even as a slave - so what: the choice is economically insignificant.

3. Yu are correct, she is wrong : rational game models can be constructed to show each side benefitting from trade etc., but those are constructed with very specific assumptions hidden in them and she cant show that those assumptions occur in every actual situation ....and often they patently dont.

[ComradeRed]

1. You are right she is wrong. You see, s/he switches up the independent and dependent variables; how much people are willing to spend (which according to the marginalist paradigm determines price) depends on their wages which depends on the revenue of the firm. (And actually, there is empirical proof that the Labor Theory of Value is right; the input-value theory of value that you spoke of is a mathematical simplification of it. See The Empirical Strength of the Labor Theory of Value (http://homepage.newschool.edu/~AShaikh/labthvalue.pdf)).

2. You are right she is wrong; do I have a choice to work or not work? I'm coerced to work, I have no choice if I want to survive.

3. You are right and s/he is wrong; competition/exploitation (I don't really understand what you mean since competition and exploitation aren't really two sides of the same coin) is a zero-sum situation. Someone wins and someone loses.

[edit]
Originally posted by Gilhyle
Participants in an economy often sell products below cost price. This has nothing to do with the Marxist argument that price reflects value. Not according to Das Kapital vol. I (http://www.marxists.org/archive/marx/works/1867-c1/ch03.htm).

[gilhyle]

Originally posted by ComradeRed+March 01, 2007 07:45 pm--> (ComradeRed @ March 01, 2007 07:45 pm)
[edit]
Gilhyle
Participants in an economy often sell products below cost price. This has nothing to do with the Marxist argument that price reflects value. Not according to Das Kapital vol. I (http://www.marxists.org/archive/marx/works/1867-c1/ch03.htm). [/b]
Capital VOl One is about value, not price.

In any case, contradicted in capital or not, it is a fact that :

monopolist sell below cost on a temporary basis to protect monopolies;

small business people with paid off assets often sell below full cost, covering operating costs only;

firms in financial difficulty will often sell below cost to achieve liquidity;

who hasnt seen things sold below cost in a promotional sale ?

businesses constanly sell below full cost because - due to market failures - the full social costs are not correctly measured


etc, etc.

[ComradeRed]

Originally posted by gilhyle+March 01, 2007 03:32 pm--> (gilhyle @ March 01, 2007 03:32 pm)Capital VOl One is about value, not price. [/b]
Which as we all know has no relation to price.

That's why Marx wrote (if you had bothered to read and understand what I linked):

Marx
Throughout this work, I assume, for the sake of simplicity, gold as the money-commodity.

The first chief function of money is to supply commodities with the material for the expression of their values, or to represent their values as magnitudes of the same denomination, qualitatively equal, and quantitatively comparable. It thus serves as a universal measure of value. And only by virtue of this function does gold, the equivalent commodity par excellence, become money.

It is not money that renders commodities commensurable. Just the contrary. It is because all commodities, as values, are realised human labour, and therefore commensurable, that their values can be measured by one and the same special commodity, and the latter be converted into the common measure of their values, i.e., into money. Money as a measure of value, is the phenomenal form that must of necessity be assumed by that measure of value which is immanent in commodities, labour-time.

The expression of the value of a commodity in gold — x commodity A = y money-commodity — is its money-form or price. --emphasis is mine.

Or are you going to go on and tell me that Marx is confusing price and value? :rolleyes:


In any case, contradicted in capital or not, it is a fact that :

monopolist sell below cost on a temporary basis to protect monopolies; Uh "monopolist"?

Why is it that a copy of windows 2000 is cheaper than windows vista?

Well, the labor embodied in the former is less than the latter, and as newer operating systems come about more labor will be required to make them. Thus the ratio of the labor of newer operating systems to the labor of older operating systems (e.g. windows vista's labor over windows 2000's) increases over time. That means the value of newer operating systems increase; but so too does the value of money, thus it appears that the relative value of older operating systems decreases when in fact everything else has just increased.

I love how you don&#39;t give any real world examples, it reminds me of string theorists <_<


small business people with paid off assets often sell below full cost, covering operating costs only; And then go out of business; the petit bourgeoisie simply re-adjust the rate of exploitation to receive less surplus value. If this happens too long, then guess what&#33; The law of accumulation holds.

There is no magic in it...surprise&#33;


firms in financial difficulty will often sell below cost to achieve liquidity; Because loans and the stock market obviously cannot do such. Oh yeah, that&#39;s what real firms in material reality do. Silly me.


who hasnt seen things sold below cost in a promotional sale ?

businesses constanly sell below full cost because - due to market failures - the full social costs are not correctly measured


etc, etc. You sound exactly like an Austrian economist. Now go on and tell us all about the miracles of capitalism <_<

[gilhyle]

Manic expression explained "S/he stated that prices are determined by the consumer&#39;s willingness to buy them. I argued that it is determined by the cost of production, for no one is going to sell something for less than it costs to make it (for long). IIRC, s/he responded that people will only produce something if they think they can get a profit for it depending on the consumers&#39; willingness. However, I think that this expectation is ultimately tied to what "

I said this was wrong because I found it insufficiently dynamic. It remains an empirical fact about capitalism that people often sell below cost and, arguably, that pattern of behaviour is an integral part of the capitalist cycle.

That is not to say that in rejecting the idea that price is ONLY determined by suppy and demand, amnic expression was wrong. He was correct in that. But he would be wrong to say either that, at the point of sale, the interaction between supply and demand does not influence price or to say that the reason why price is not ONLY determined by supply and demand is because it is determined by the cost of production.

This is wrong for two reasons:

1. generalising over capitalism as a whole, price is determined by value, and

2. looking at the particular transaction, price is fixed within the process of exchange and how that process works at the individual price transaction level is not determined with Das Kapital - which always operates at a higher level of generality.

(true I didnt read your link.)

[ComradeRed]

I think you need to read Capital vol. one before you can actually go ahead and talk about economics; your picture of the dynamics of capitalism is rather off.

For example, you completely ignore the law of accumulation. Instead you adopt a Hayek business cycle idea, which is rather absurd...since the logical consequence would be a pro-capitalist stance based on nonsensical axioms.


That is not to say that in rejecting the idea that price is ONLY determined by suppy and demand, amnic expression was wrong. He was correct in that. But he would be wrong to say either that, at the point of sale, the interaction between supply and demand does not influence price or to say that the reason why price is not ONLY determined by supply and demand is because it is determined by the cost of production. You would be wrong empirically: The Empirical Strength of the Labor Theory of Value (pdf) (http://homepage.newschool.edu/~AShaikh/labthvalue.pdf).

Again, read (and most importantly, understand) Das Kapital. It&#39;s not enough to read the Young Marx and Adam Smith (or worse, study bourgeois economics) and try to reach a conclusion.

[Leo]

1.) S/he stated that prices are determined by the consumer&#39;s willingness to buy them. I argued that it is determined by the cost of production, for no one is going to sell something for less than it costs to make it (for long). IIRC, s/he responded that people will only produce something if they think they can get a profit for it depending on the consumers&#39; willingness. However, I think that this expectation is ultimately tied to what the cost of production is.

Yes, it is and it has to be... First and foremost, the capitalist needs the surplus value in order to increase his or her capital so it does have to be higher than the production cost but your teacher also has a point when saying that it won&#39;t be produced if it doesn&#39;t make profit. As for demand: demand does indeed play an important role in profit making, yet it is accepted as something static, which is of course true in the first look: how much people are willing to spend depends on their wages and this is something even neo-classical economists admit. However demand is not entirely static as when it comes to the choice of goods, all immaterial values artificially or naturally attached to the commodity by commercials, reputation etc. come into play and play a role in defining the place of the commodity in the grand list of similar goods.


2.) S/he stated that everyone has choices in an economy. However, I said that choices increase with someone&#39;s wealth (in essence, workers have little choices, and the choices are between exploitation and poverty/starvation).

You are clearly right and she is clearly wrong, I don&#39;t see a question here.


3.) S/he argued that competition and exploitation benefits both parties, but I responded that it is the degree to which each party is exploited (for example, workers in Vietnam are getting very little from their employers while their employers are getting a great deal from them).

Well, exploitation only benefits the exploiter, this is quite clear in my opinion. As for competition, it is complicated... Both parties actually lose in a competition situation. Capitalists did not when the productive forces were still developing (or when the capitalist mode of production was expanding) but when the capitalist market became the world market; when capitalism expanded to the whole world (and went on destroying productive forces -imperialist war- in order to get rid of the loss of value) the only way for the survival of capitalists was a monopolistic economical system, Keynesianism, Stalinism, Corporotism etc. So under that system and controlled (or artificial) competition, you would be right; bourgeoisie would benefit and worker would not.

[gilhyle]

That I dont share your view - which I suspect is somewhat Ricardian - does not imply that I have not read Kapital.

So perhaps you are wasting your time recommending that I read Kapital, just because I dont understand it as you do.

If we are to debate like that, i would respond to you as follows:

"You obviously have no understanding of the Law of Accumulation since you think it includes a theory of the business cycle. You should really read Kapital before you start talking about it."

Does that get either of us anywhere ? I prefer to try to respond as follows:

My point is that Marx&#39;s analysis allows for all sorts of disproprtionality, underconsumption, overproduction etc. and most importantly allows for the continuous re-appearance of breaks in the accumulation of profit. It is precisely because the accumulation of profit is NOT assured under capitalism that we see repeated crashes and we see the phenomenon of business cycles. Thus to take as one&#39;s starting point (as manic expression&#39;s response o his teacher seemed to do) that products will always be sold profitably would be to miss precisely the instability in capitalism, the anarchy in capitalist production and, most importantly, in the sphere of circulation. The danger in his formulation is to see the sphere of production and circulation as integrated.

In his defence, it could well be pointed out that he included the qualification &#39;for long&#39; and if he sought to rely on that, I would be happy to concede the point.

Your points however, appear to rest on a belief that Volume One is capable of empirical verification. Maybe I misunderstand you in this regard. No doubt if I read your link your view would be clarified.

For my part, while I might allow that of parts of Volume Three, I would see Volume One as not capable of direct empirical verification in its key theoretical formulations. It is capable of empirical illusration, indeed it is replete with such illustrations - but that is not the same thing. Such empirical illustration is clearly powerful, but it should not be taken as suggesting that the laws of Volume One exclude the occurence on a significant scale within capitalism of behaviours that appear to contradict them. That would be to misunderstand what Volume One tries to achieve.

Of course that misunderstanding is tempting, because it allows Marx&#39;s work to be seen as akin to a conventional work of economic science.

[ComradeRed]

Interesting you don&#39;t deny your sympathies to the theoretical formulations of Austrian economics. How er revolutionary of you.


So perhaps you are wasting your time recommending that I read Kapital, just because I dont understand it as you do. Yes, I have noticed you like to not read anything <_<

I&#39;d hate to tell you this, but from the structure of your post it seems like you don&#39;t know what you&#39;re talking about. Maybe it&#39;s the dialectical approach of yours.


My point is that Marx&#39;s analysis allows for all sorts of disproprtionality, underconsumption, overproduction etc. and most importantly allows for the continuous re-appearance of breaks in the accumulation of profit. It is precisely because the accumulation of profit is NOT assured under capitalism that we see repeated crashes and we see the phenomenon of business cycles. I&#39;d give you some quotes from Marx on this, but I know you won&#39;t read them so there&#39;s no point really.

Curious how you just assert things without putting up anything from...well, anyone&#33; Not even empirical or anecdotal data, just "trust me this is how it works". Ah the methodology of canonical bourgeois economics&#33;

Maybe this isn&#39;t constructive, but your arguments are mere sophistry.


Your points however, appear to rest on a belief that Volume One is capable of empirical verification. Maybe I misunderstand you in this regard. No doubt if I read your link your view would be clarified.

For my part, while I might allow that of parts of Volume Three, I would see Volume One as not capable of direct empirical verification in its key theoretical formulations. It is capable of empirical illusration, indeed it is replete with such illustrations - but that is not the same thing. Such empirical illustration is clearly powerful, but it should not be taken as suggesting that the laws of Volume One exclude the occurence on a significant scale within capitalism of behaviours that appear to contradict them. That would be to misunderstand what Volume One tries to achieve. My points are that Marx&#39;s "theoretical formulation" (whatever the hell you mean by that, since in science we don&#39;t really divide between "theoretical formulations" and "empirical formulations" -- this is purely an invention of your own) imply certain empirical tendencies.

You can say "Well, that&#39;s nice, but so what?"

Well, since these empirical tendencies have been observed, that means that Marx was right and the case is closed.

It doesn&#39;t really matter what the hell you think or believe because empirical data supports the labor theory of value. That&#39;s how science works.

[gilhyle]

Manic Expression asks for opinions on a claim that commodities sell above their cost of production. I suggest they dont always sell above their cost of production and I list some examples. You argue, on the contrary that "how much people are willing to spend (which according to the marginalist paradigm determines price) depends on their wages which depends on the revenue of the firm." I suggest that if all products were always sold at above their cost of production (which of course includes a return to capital) then there couldnt be a breakdown of profitability in the process of exchange....to which you reply " I&#39;d give you some quotes from Marx on this, but I know you won&#39;t read them so there&#39;s no point really"

Go on then, give me one quote from Marx where he says commodities always sell above their cost of production....I promise to read it twice, thrice.

[ComradeRed]

I suggest that if all products were always sold at above their cost of production (which of course includes a return to capital) then there couldnt be a breakdown of profitability in the process of exchange And you haven&#39;t justified this assertion.

But that&#39;s not my argument. My argument is that commodities are always sold at their value as expressed through the money commodity.

Workers are not paid according to how much value they create but how much their labor is valued (i.e. the amount to survive and depending on class struggle maybe some more or some less).

There is a surplus value which is the difference between the value created by the labor and the value of the labor which goes to the capitalists.

There is a problem with the "supply" and "demand" as they are not anywhere damn near "equilibrium" (note the quotation marks).

This is all basic marxist economics, and it&#39;s perfectly consistent with the "input-theory of value" (the input theory of value is merely a formalism of the labor theory of value mind you).

Or perhaps you are trying to tacitly assert the Okishio&#39;s Theorem (http://en.wikipedia.org/wiki/Okishio&#39;s+Theorem)? Haven&#39;t heard of it? Maybe you ought to read it&#39;s obituary. (http://libcom.org/library/okisho-theorem-obituary-marxist-humanism)

[Leo]

You guys just totally ignored me :(

[gilhyle]

Yea Leo, I did, sorry.....but I have trouble understanding the last sentence of your point on 1), namely "However demand is not entirely static as when it comes to the choice of goods, all immaterial values artificially or naturally attached to the commodity by commercials, reputation etc. come into play and play a role in defining the place of the commodity in the grand list of similar goods."

As it happens I dont accept the input theory of value - if that is the theory your link advocates (I cheated and went back for a speed read &#33;) Nor do I accept that commodities always sell at their value. They sell AROUND their value. BIG difference.

But in any case while your point (if true) would support manic expression&#39;s claim it would not amount to his reason for his claim and it was his reason for his claim I objected to, since his reason referred to cost of production rather than value.

As to having to prove that a crisis involves a breakdown in profitability....do I really need to prove that ? Thats as close to a tautology as you get in the real world.

[ComradeRed]

As it happens I dont accept the input theory of value - if that is the theory your link advocates (I cheated and went back for a speed read &#33;) Okaay...

In science you cannot say "You&#39;re wrong&#33;" and then sit there on your hands. You have to provide a superior replacement which explains everything the old paradigm did and more&#33;

The input theory of value (which is a formalism of the labor theory of value by the by, unlike your remarkably bourgeois mode of economic thought) has empirical evidence.

Frankly I don&#39;t really give a damn whether you reject the input theory of value or not. You have yet to give a valid reason to reject it, and your replacement for it has all ready be rather completely debunked.


Nor do I accept that commodities always sell at their value. They sell AROUND their value. BIG difference. And you reasoning behind this is...?

This is actually not a good idea at all since it espouses bourgeois economics, which I&#39;ve criticized a number of times as mathematically inconsistent (just google "ComradeRed Critique of Bourgeois Economics"); just replace the notion of the equilibrium to be justified as it being "the commodities&#39; value which the price fluctuates around".

Just totally ignore the Marxist concept of price, it&#39;s OK. And the theory of value. And the law of accumulation. Just don&#39;t call it marxist economics; what you suggest is universally recognized as bourgeois economics with an Austrian twist.


But in any case while your point (if true) would support manic expression&#39;s claim it would not amount to his reason for his claim and it was his reason for his claim I objected to, since his reason referred to cost of production rather than value. Perhaps, but I never claimed that his argument was correct only his claim.

[gilhyle]

Actually bourgeois thinking LOVES empirical verification - and nothing wrong with that &#33;

As to critiqueing the input model.....slightly off the point of this thread, maybe...just possibly a bit of a diversion. Mentioned it only cos you dragged it in. See, I dont give a damm whether I reject it either &#33;

As to the idea that commodities sell at around their value...this formula is actually too crude, the Marxist view is that actual prices fluctuate around price of production (namely cost of production where this includes average profit on the invested capital). But in a simple commodity economy, it would fluctuate around value. Thus I.I Rubin says, correctly, summarising the basic features of Marx&#39;s view:

"value represents that average level around which market prices fluctuate ...."

P. 64 Essays on Marx&#39;s Theory of Value

As to proving it, that would also be beyond the scope of this thread.

[ComradeRed]

Originally posted by gilhyle+March 06, 2007 03:25 pm--> (gilhyle &#064; March 06, 2007 03:25 pm)Actually bourgeois thinking LOVES empirical verification - and nothing wrong with that &#33;[/b]
Uh...then answer me this: why is it that the bourgeois model has a terrible track record at empirical predictions?

True the vulgar economist likes to pretend that he is as "empirically rigorous" as a real scientist, but the difference is that the vulgar economist works from his tiny office without ever seeing the light of day whereas the real scientist only sees the light of day.

It&#39;s not really empiricism insomuch as it is idealism (deriving knowledge from the a priori -- hmm...where have we heard about that before gilhyle?), and surprise(&#33;) it&#39;s empirically wrong&#33;

Check the predicted interest rates from the monetarists&#39; school of Thatcher&#39;s monetarist policies to its actual interest rates; it&#39;s off. In science that kills a paradigm.

But alas monetarism is still around, despite its lack of empiricism (which you say the bourgeoisie love? :lol:).

There was actually a survey of West Germany managers on what they would do in a series of hypothetical situations. Over 95% would not do the marginalist-predicted choice. Statistically, using a chi-squared distribution, the number of "marginalist managers" was nothing more than a statistical anamoly. That&#39;s fantastic empiricism used by the bourgeois economist.


As to critiqueing the input model.....slightly off the point of this thread, maybe...just possibly a bit of a diversion. Mentioned it only cos you dragged it in. See, I dont give a damm whether I reject it either &#33; This doesn&#39;t make any sense, "possibly a bit of a diversion."


As to the idea that commodities sell at around their value...this formula is actually too crude, the Marxist view is that actual prices fluctuate around price of production (namely cost of production where this includes average profit on the invested capital). Sorry that&#39;s not canon with Capital. That&#39;s YOUR view which happens to have a serious lack of any formalism.

As I&#39;ve all ready quoted, Marx stands in opposition to this.


Thus I.I Rubin says, correctly, summarising the basic features of Marx&#39;s view:

"value represents that average level around which market prices fluctuate ...."

P. 64 Essays on Marx&#39;s Theory of Value Brilliant way to take things out of context&#33; Here&#39;s the full quote:

I. I. Rubin
In conditions of a simple commodity economy the average prices of products are proportional to their labor value. In other words, value represents that average level around which market prices fluctuate and with which the prices would coincide if social labor were proportionally distributed among the various branches of production. Thus a state of equilibrium would be established among the branches of production.
From the Marxists.org Archive (http://www.marxists.org/subject/economy/rubin/ch08a.htm) -- bold emphasis is added, italics are Rubin&#39;s.

Of course the price is proportional to the labor value (which I assume he just means the value). It&#39;s the value relative to the money-commodity&#33;

That&#39;s the proportion of the value of a given quantity of money-commodity is equal to a given value of the commodity in question (x units money = y units A; therefore the price per unit A is (x/y) units money -- this is the reduced money expression of value, a normalized "price" expression of a given commodity).

That&#39;s Marx&#39;s "correct" position. If you had bothered to read Capital, vol. I, chapter 3 you&#39;d know that.

It appears that you are twisting words around to get (mis)quotes that tell you what you want. As I&#39;ve stated elsewhere, and you&#39;ve yet to reply, you&#39;re position is really nothing more than that of an Austrian economist. Marx was not an Austrian economist, he had a scientific mind.

[gilhyle]

Originally posted by [email protected] 07, 2007 02:11 am

That&#39;s the proportion of the value of a given quantity of money-commodity is equal to a given value of the commodity in question (x units money = y units A; therefore the price per unit A is (x/y) units money -- this is the reduced money expression of value, a normalized "price" expression of a given commodity).

That&#39;s Marx&#39;s "correct" position. If you had bothered to read Capital, vol. I, chapter 3 you&#39;d know that.


It would, I think, be yet another diversion to go off discussing the particular nature of bourgeois economics, which holds a particularly problematic place within bourgeois science generally. My comment was about bourgeois science generally.

Just to say on Austrian economics, I have no interest in the topic except to acknowledge that they have a slightly interesting way of conducting competition analysis, a mildly useful corrective to the dominant paradigm in industrial economics. Other than that they are of no interest.....its just another diversion you are introducing. Lets stick to the point.

Returning to the main point: Interesting how your re-statement of Rubin&#39;s summary of Marx&#39;s position eliminates the concept of fluctuation - the only point I bring to this discussion and my basis for disagreeing with Manic expressions formulation.

As it happens, I can&#39;t read your statement for the following reason: You state that "the proportion of the value of the.....is equal to a given value of ......."

Syntactically I dont know what that means - a proportion is not equal to any value, a proportion is a proportion which is a different kind of number than a value. Two values may be proportional to each other. A price may be proportional to another price or to a value....etc.

If you had said that &#39;the value of the .... is equal to a given value of....&#39; (which would be the same as saying in English x units money = y units A ) I would have understood you. I assume that is what you meant. But feel free to correct me.

However, this is almost trivial and it is NOT what Rubin is saying in the quote.

What Rubin does is to imagine a range of prices and then to imagine an average price and then to say that that average price of a given quantity of a commodity is &#39;proportional&#39; to the value of that given quantity of a commodity. For that to be so, (simple logic) there must be prices below as well as above the average price - thus price can fluctuate below value. Hence Rubin uses the phrase I quoted concerning fluctuation.....no misrepresentation at all.

[ComradeRed]

My comment was about bourgeois science generally. Ah yes, because "real" science uses only a priori techniques to investigate reality. Silly me <_<

That&#39;s why platonism is a science whereas physics isn&#39;t, right? :lol:


Just to say on Austrian economics, I have no interest in the topic except to acknowledge that they have a slightly interesting way of conducting competition analysis, a mildly useful corrective to the dominant paradigm in industrial economics. Other than that they are of no interest.....its just another diversion you are introducing. Lets stick to the point. This "diversion" is a serious problem since it demonstrates that you&#39;re not really capable of understanding economics.

But silly me as though understanding economics had been a requisite for responding to this thread.


Interesting how your re-statement of Rubin&#39;s summary of Marx&#39;s position eliminates the concept of fluctuation - the only point I bring to this discussion and my basis for disagreeing with Manic expressions formulation. Well, go back to the source. It doesn&#39;t matter what I.I. Rubin says; it&#39;s not canon with Marx.

Then evaluate whether Marx&#39;s ideas are correct or not; and as it has been empirically and mathematically demonstrated valid, we can then say the following:

Marx was right, and you are wrong.

There are links a plenty in this thread, maybe when you decide to read one or two of them you&#39;ll, y&#39;know, learn something.



As it happens, I can&#39;t read your statement for the following reason: You state that "the proportion of the value of the.....is equal to a given value of ......."

Syntactically I dont know what that means - a proportion is not equal to any value, a proportion is a proportion which is a different kind of number than a value. Two values may be proportional to each other. A price may be proportional to another price or to a value....etc. Oh I see, you are intentionally misreading what I wrote. Let me elucidate for you.


Originally posted by ComradeRed+--> (ComradeRed)That&#39;s the proportion of the value of a given quantity of money-commodity is equal to a given value of the commodity in question (x units money = y units A; therefore the price per unit A is (x/y) units money -- this is the reduced money expression of value, a normalized "price" expression of a given commodity).
[/b] That there parenthetic statement is an elucidation of a statement which is apparently beyond your reading comprehension...hence why it&#39;s there&#33;


Gilhyle again

However, this is almost trivial and it is NOT what Rubin is saying in the quote.

What Rubin does is to imagine a range of prices and then to imagine an average price and then to say that that average price of a given quantity of a commodity is &#39;proportional&#39; to the value of that given quantity of a commodity. For that to be so, (simple logic) there must be prices below as well as above the average price - thus price can fluctuate below value. Hence Rubin uses the phrase I quoted concerning fluctuation.....no misrepresentation at all. No, there is misrepresentation.

Sure you might find somewhere scribbled in Marx&#39;s economic and philosophical notebooks something along the lines that the "market price fluctuates around the exchange value" or something to that effect; it&#39;s notably absent in Das Kapital, which is undoubtedly the culmination of Marx&#39;s studies.

I&#39;ve presented a direct quote from Marx&#39;s Das Kapital which you gleefully ignore.

You then present some secondary source and refuse to even present anything from Marx&#39;s Capital on it.

Which leads me to conclude that you can&#39;t find anything, or perhaps you have yet to read Capital.

One problem, a really serious problem, with Rubin&#39;s approach is that there is no tendency for the rate of profits to fall. The law of accumulation does not necessarily hold either.

Basically, you retain none of Marx&#39;s economic theories. However, you do get an amalgam of Classical and Neoclassical economics, with Marx notably unrepresented. Something that Mill would be pleased with.

But I like your idea better: Marx has no place in Marxist economics...like empiricism in science. :lol:

[manic expression]

Thanks everyone for the replies, you&#39;ve given me a lot of great stuff to think about.

Should I try reading (gasp) Capital to get some answers on economics?

[ComradeRed]

Originally posted by manic [email protected] 07, 2007 08:59 pm
Should I try reading (gasp) Capital to get some answers on economics?
I would suggest reading David Ricardo first, and then Das Kapital.

Das Kapital is a hard read. I&#39;ve suggested time and time again that the way to read it is to completely rewrite it in words that you can understand. At least for the first few chapters where Marx uses Hegelian psychobabble.

It works well, what can I say?

[gilhyle]

Originally posted by [email protected] 08, 2007 12:32 am


Marx was right, and you are wrong....... there is no tendency for the rate of profits to fall. The law of accumulation does not necessarily hold either.


:rolleyes:

Manic Expression....I suggest you read a good introductory text such as &#39;Marx&#39;s Capital&#39; by Ben Fine and Alfredo Saad Filho, Pluto Press 2004 which has nice &#39;Issues and Further Readings&#39; section at the end of each Chapter, with annotated reading lists - including to people with whom they do not agree.

The fact is that Comrade Red comes from one particular approach, influenced particularly by Ricardo and Sraffa.

My own view comes from the opposite end of the spectrum of interpretation of Marx&#39;s theory, influenced in particular by Roman Rosdolsky and Rubin.

Unfortunately, Comrade Red likes to suggest that those who disagree with him havent read Capital, are Austrians, bourgeois etc. That unnecessary derision has the effect of suggesting that there are not a range of views on Marx&#39;s political economy. There are.

The short book I recommend is close to my view. Comrade Red has made recommendations and given links before....I have no doubt, on reflection, he can come up with a better recommendation reflecting his view than reading Ricardo &#33;

One more point, I will use Fine and Saad Filho&#39;s book to illustrate the point I have emphasised. Fine & Saad Filho say the following about Ricardo, with which I agree: "For Marx it is insufficient to base the source of value on labour time of production, as Ricardo presumes.For Ricardo&#39;s view takes for granted the existence of exchange, prices and commodities. That commodities are more valuable because they embody more labour begs the question of why there are commodities at all, let alone whether it is a relevant abstraction to assume that they exchange at their labour time of production. (P.9)

Notwithstanding this you will note that Fine (effectively following Marx&#39;s practice in Vol One of Capital) assumes that commodities exchange at their value in almost all of the book I recommed.

Fine explains this useful convention well:

".....This is not to suggest that commodities do exchange at their values.....Market prices will be affected by the capital-labour ratios, scarcities, skills, monopolies and by more or less accidental variation in supply and demand.......Marx did not ignore them" (i.e. these contingent influences - GH) ", but they are irrelevant for uncovering the social relations of production specific to capitalism....Throughout this book, unless otherwise stated, it will be assumed that commodities exchange at their value. This is not to be interpreted as a fully fledged price theory, but as an attempt to understand the price system. " (P.21)

Fine and Saad Filho here elucidate a feature of Marxist economic presentations that can cause great confusion - and which, while legitimate, can facilitate the revivication of Ricardian views under a Marxist label, as Comrade Red favours and about which you should be cautious, in my view.

The Labour Theory of Value is NOT a theory of price and much confusion arises for persons engaging with conventional economists (who treat price as determined by the interaction of supply and demand). You can find yourself trying to defend the indefensible (not withstanding Shaikh&#39;s article to which Comrade Red refers you), if you try to counterpose the Labour Theory of Value to those economists as an alternative theory of price. Any half decent defender of the supply and demand view will tear you to shreds if you were to try to defend the view that prices are determined by value. Marx will remain unscathed, since that is not what he said. Good reading &#33;

(BTW when you do come to try to read Capital, remember that the first Chapter of Volume One is by far the hardest chapter to read in that Volume.)

[ComradeRed]

Manic Expression....I suggest you read a good introductory text such as &#39;Marx&#39;s Capital&#39; by Ben Fine and Alfredo Saad Filho, Pluto Press 2004 which has nice &#39;Issues and Further Readings&#39; section at the end of each Chapter, with annotated reading lists - including to people with whom they do not agree.
Exactly, whatever you do don&#39;t read Marx on Marxist economics as he obviously has no bearing on it&#33;


The fact is that Comrade Red comes from one particular approach, influenced particularly by Ricardo and Sraffa. And as we all know, Ricardo has had no influence on Marx whatsoever.

Not as though anyone would recommend you actually read Marx or Ricardo, much less someone a little more modern.

Much less even remotely consider reading Marx&#39;s own work on his own school of economics. That would just be absurd to read Capital&#33;


Unfortunately, Comrade Red likes to suggest that those who disagree with him havent read Capital, are Austrians, bourgeois etc. That unnecessary derision has the effect of suggesting that there are not a range of views on Marx&#39;s political economy. There are. Sure, there are a lot of people who claim to be marxist economists and there are a lot of books claiming to be on marxist economics.

However, what I evaluated your responses to was the source: Capital vol I. You&#39;re assertions were inconsistent with direct quotes from Marx.

Worse, it was inconsistent because it did have specks of bourgeois marginalism attached to it.

Rubin&#39;s "fluctuations" boils down to marginalist nonsense. I&#39;m sorry that surprises you. But from this next quote from you, I&#39;m fairly certain that you have sympathy to bourgeois economics.


You can find yourself trying to defend the indefensible (not withstanding Shaikh&#39;s article to which Comrade Red refers you), if you try to counterpose the Labour Theory of Value to those economists as an alternative theory of price. Any half decent defender of the supply and demand view will tear you to shreds if you were to try to defend the view that prices are determined by value. Marx will remain unscathed, since that is not what he said. Good reading &#33; Boy you have no clue how the LTV works&#33; Much less you actually suppose that bourgeois economists are right, well that&#39;s just ri-god damn-diculous.

I&#39;ve all ready posted a rather scathing criticism of bourgeois economics&#39; theory of value. It turns out to be mathematically inconsistent (and actually there is a more indepth criticism if you have the time and mathematical mastery of calculus: Steve Keen&#39;s lecture notes can be found On Demand (http://www.debunking-economics.com/Lectures/PolEcon/Week02IntroDemand.ppt), On Supply (http://www.debunking-economics.com/Lectures/PolEcon/Week03Supply.ppt), and General Equilibrium (http://www.debunking-economics.com/Lectures/PolEcon/Week04Equilibrium.ppt)) -- any compotent mathematician could tear the marginalist paradigm to shreds in seconds :rolleyes:

And if you actually do some research, you&#39;ll find that Sraffa saved the labor theory of value. "Reduction to dated labor inputs" ring a bell?

I must congratulate you though, you really haven&#39;t read Das Kapital as I suspected. Or paid attention to the quotes I posted from Marx. Or bothered to start reading Das Kapital. That takes a lot of chutsba.

[gilhyle]

Originally posted by [email protected] 09, 2007 04:38 am
I must congratulate you though, you really haven&#39;t read Das Kapital as I suspected. Or paid attention to the quotes I posted from Marx. Or bothered to start reading Das Kapital.
Whatever makes you happy.