Allin C and LAWS OF CHAOS

[Ajit Sinha <ASINHA@xxxxxxxxxxxx>]

Soon after Allin C put forth his LTV Defence 2, I posted a short comment/critic
ism of THE LAWS OF CHAOS by Farjoun and Machover, since his arguments are so
heavely influenced by this book. Apparently it got lost in the vast cyberspace.
I thought may be for good--I will get some work done. But then I think it may
not be fair to Allin and others who would like to follow F & M in developing
Marxist economic theory. I think, F & M's baby is still born. The problem may
be that they are intelligent mathematicians who do not understand the nature of
economic theory. Economic theoreticians are not interested in prices as any
merchant or trader would be. For economic theory, price is just a character
(sometimes important and sometimes not so important) in a story, and is of
interest only as a character of the story. E.G. During the preparation of his
PRINCIPLES, Ricardo, on December 30, 1815, wrote to James Mill, "I know I shall
be soon stopped by the word price"; i.e. his story had come to a halt without
this character. In the surplus approach economics, prices play a role of
DISTRIBUTING the SURPLUS PRODUCT (which is determined independent of prices)
among the exploiting class according to certain rules (uniform rate of profit
being one rule). In the neo-Classical economics, prices play the role of
DISTRIBUTING (or allocating) the SCARCE RESOURCES to various ends to satisfy
human wants. In THE LAWS OF CHAOS, prices are taken as empirical facts and the
authors attempt to predict the empirical prices by using the method of
mechanical statistics. For them a prediction of the observed prices is the sole
purpose of the price or value theory, independent of any economic theory or the
larger story of which it is part and parcel of. Of course, they try to put the
old Marxist story as their larger story. However, the old Marxist story is mere
APPENDAGE to their "price theory"-- as is accepted by themselves. In my opinion
Marx would have declared their theory highly vulgar.

F & M's attack on the whole classical tradition, including Marx, for
postulating uniform rate of profit is also not very interesting. Who does not
know that if you look at the data of a year, most likely the rate of profit
will not be equal accross sectors. The rate of profit is affected by tech.
change, degrees of monopolization, international trade, changes in demand
patterns, govt. interventions, wars, and a whole host of things. The classical
theory of value or prices of production ASSUMES that these factors are either
constant or do not exist. If F & M want to discredit the classical position,
they must show that under the given conditions of classical theory, this is an
illogical position. But they don't do this. They only say that the "real world"
profits don't equalize. But this is no criticism. Theory is far from "real
world" and will always remain far from it.

                                          Cheers, Ajit Sinha