[OPE-L:7431] Re: Re Aoki on K and M on money

[Rakesh Bhandari <rakeshb@xxxxxxxxxxxx>]

Title: Re: [OPE-L:7430] Re Aoki on K and M on money

re 7430

Hi Gil,

Money can have no other role than numeraire in a system of simultaneous equations.

(1) The equation for money appears alongside all the other commodities in such a formalization, and  the contradiction between commdities on one side and money on the other is thereby elided. But this is the basic abstraction of a monetary production economy. It is an emasculation of of Marx's theory of money to treat it as any other commodity except that it alone is set to equal one in an algebraic solution.

(2) Once one has put himself in the simultaneous straightjacket,  it seems impossible to make a logical transition to a level of abstraction in which the features of money which are temporally based can be assimilated. Through the introduction of money even C-M-C separates sale and purchase by time. But there is no time in the Sraffian formalization and thus there is no capitalism. The formalization thus does not capture the essential features of its purported object.

For these reasons, I am sympathetic to the TSS interpretation in which the givens are in the form of money and all variables are time subscripted. There then seem to be no logical problems in moving to what we are calling other levels of abstraction. Of course I wish the TSS members were present here to continue this argument at the level of sophistication which it deserves.

I shall not re-engage your ch 5 criticism (which I had recently mentioned) except to say that we are both agreed that putting out manufacture can be a form of surplus value production. By the way there is an important exchange between Michael Zmolek and Robert Albritton about putting out mfg in recent issues of the Journal of Peasant Studies.

Needless to say, I don't believe there is a transformation problem which requires the money-less, atemporal Sraffian formalization to solve.

Yours, Rakesh

> Rakesh, thanks for bringing the Aoki
> article to my attention.  I hadn't known about the 1933 MS of
> Keynes's theory, and found Aoki's discussion of the overlaps and
> contrasts with Marx quite interesting.  But for what it's worth,
> so far as I can see nothing Aoki wrote suggests a refutation of my
> earlier comments on the applicability of Sraffa to Marx, **at the
> level of abstraction at which Sraffian analysis engages Marx's
> analysis.**  Aoki notes that both Marx and Keynes understand
> money to play a more complex role in a capitalist economy than simply
> serving as a medium of exchange, and that this more complex role
> allows for the possibility of capitalist crisis.
>
> But first, none of these more complex aspects of money are at issue
> in the portion of Marx's analysis under discussion with Gary and
> Fred, roughly corresponding to Marx's argument in KIII, Ch. 9. 
> I might add, in anticipation of what follows, that nor are these more
> complex aspects of money at issue in Marx's analysis of the
> "contradictions" in the circuit of capital in KI, Ch. 5. If
> you allow  Marx to abstract from these complexities at this
> stage, then it seems to me a similar latitude should be allowed to
> the Sraffian framework when it addresses the same set of questions at
> the same level of generality.  Second, I see no evident
> impediment to incorporating the more complex functions of money in a
> Sraffian framework if this is called for in some more
> all-encompassing abstraction of capitalist processes, and see no
> reason to believe that doing so would reverse the valid indictments
> of Marx's analysis made possible by the Sraffian framework.
> >  My argument with Gil has been that
> > Marx is not attempting a logical transition from simple commodity
> > production to wage labor relations of production in chapters five and
> > six.
> It would be pointless to re-engage this argument, but I will just
> note for the record that contrary to your claim here I never argued
> that Marx is attempting such a logical transition.  My main
> point is that (whether or not you understand Marx to be positing a
> fully elaborated capitalist economy at every step of his argument in
> KI, Part 2), Marx explicitly developed logical basis for invoking
> *price-value proportionality* (i.e. the analytical hypothesis that
> commodities exchange at their respective values) as the necessary
> theoretical starting point for analyzing surplus value is (1)
> evidently invalid, involving a fallacious inference about necessary
> conditions from a premise concerning sufficient conditions; (2)
> contradicted by at least one version of the circuit of capital that
> meets all of Marx's conditions for the existence of surplus value;
> and (3) essentially misleading about the systemic conditions that
> make it possible for capitalists to appropriate surplus
> value.
> But other than noting what my real argument on this point is for the
> record, I don't mean to pursue this critique further in this
> forum.  There is a very different set of questions at stake in
> the exchange between Fred and Gary.
>
> Gil