The Keen/Ernst debate

[akliman@xxxxxxxxxxxx]

Just ONE point.  I'll refrain from commenting on the substance of the
 discussion at this time.

I am not at all sure that the purpose of "Freeman's dynamics" is to rescue
 the "labor theory of value," as Steve suggested.  In any case, being one
 of Kliman and McGlone, I know that this has never been our purpose.  What
 we've sought to do is show that Marx's value theory can be understood in
 a logically consistent manner, contrary to the common wisdom, and that the
 "logical" refutations of it depend on the very special and uninteresting
 case in which input prices equal output prices and depend on confusing value
 and exchange-value (i.e, thinking of values and prices as two different sets
 of exchange ratios [only] instead of as different sums of value.)

Probably it was not Steve's intention, but the idea that "dynamic" 
reformulation of Marx's value theory is an attempt to rescue the LTV makes it 
sound like a
 sort of analytical trick.  Saying that the work of Freeman, Ernst, Kliman,
 McGlone, etc. refutes the logical refutations of Marx helps make clearer
 that the "tricks" are actually the assumptions of Dmitriev, Bortkiewicz, and
 the post-Sraffian (not MOSTLY Sraffa himself), smuggled in unobtrusively.
  It is amazing how "powerful" the input price = output price assumption is,
 for instance.

As for Sraffa:  he shows in the case of a subsistence economy that the
 reproduction of the system requires fixed exchange ratios (i.e, input/output
 price equality).  He glides into the "production with a surplus" case, and
 calculates prices and the profit rate as unique ratios, AS IF the reproduction 
 of the system again required stationary prices.  He doesn't prove it, and in
 fact it IS NOT TRUE.  All demands can equal supplies, the reproduction of the
 system can take place (simple, expanded, or whatever), and a uniform profit
 rate on capital advanced can be gotten, even when input and output prices
 are unequal.   Sraffa does not actually claim that the stationary prices
 are the only ones that permit reproduction, but many of the post-Sraffians
 do, and they've made much out of this--but they are just wrong.

What this also implies is that the static vs. dynamic dichotomy is too 
simplisitc.  Nothing could be more "static" than simple reproduction and a 
uniform
 profit rate, right?   But these simply do not imply stationary prices--
 so one doesn't necessarily need to "privilege" disequilibrium in order to
 throw of the "logical inconsistencies" albatross from around Marx's neck.
  Since stationary prices are irrelevant to equilibrium in any real sense,
 why is this assumption made?  It reduces degrees of freedom, allowing the
 uncalculable to be calculated; and, more importantly, it sets a level to
 the rate of profit independently of the exploitation of labor in capitalist
 production, as in Marx, and independently of time preference, as in neo-
classicism.  If the stationary price assumption is discarded, though, one
 does need some real THEORY of HOW the profit rate is determined.  The
 physical productivity story (technology and the real wage) doesn't hold up
 in these circumstances.

I guess this last paragraph also bears on the Keen/Ernst debate in a different
 way.  Viz., in a certain sense, I'd agree that some of Vol. I is "static."
  But does Marx EVER, ANYWHERE, base even ONE theoretical conclusion on
 stationary values or prices?

Ciao--Andrew (Kliman)


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