Re: LOV and LTV

[Chris Burford <cburford@xxxxxxxxxx>]

At 04/02/02 15:37 -0500, you wrote:
> >
> Chris Burford:>I suggest that approaching these debates with the mind set
> of LTV, sustains
> >an assumption which is essentially about a simple equation:
> >
> >the value of something is its labour content (with various subtleties added
> >about terminology and more or lessness)
> >
> >LOV however is essentially a whole systems dynamical  approach to the
> >circulation of the collective social product that is produced in the form
> >of commodities.
>
> Justin:That's not a "law," in any normal scientific sense. A "law" is a
> precisely
> formulable generalization (n.b., not a definitional assumption) stating
> relations between variables. I think the law of value is that the price of
> commodities tends towards their value in long runm, with certain determinate
> disturbances that imply that prices tend to converge on pricesof prodyction.
>
> CharlesB: The law of value is stated by Marx and Engels azs a relationship
> between variables. The law of value is that commodities are exchanged for
> each other based on the labor time embodied in them (not as Justin state
> it; Engels has an essay on this in the afterward or something of Vol. III )


Obviously I am in general sympathy with Charles's defence of the LOV
approach, but I think Justin helpfully pinpoints a line of demarcation. For
Justin a "law" is a "precisely formulable generalization". Many might agree
the merits of such an approach, but I am fairly confident that Marx and
Engels would not. People will have to make a value judgement about this.

In  Chapter XXV   Section 4 of Vol 1 of Capital Marx states in connection
with "the absolute general law of capitalist accumulation" "like all other
laws it is modified in its working by many circumstances, the analysis of
which does not concern us here."

Now it is true that Marx's formulation of the law could still conceivably
be expressed in a clear relationship of variables despite this
qualification, but  the qualification suggests to me that Marx expected the
workings of any serious law to be fuzzy in practice.

The statement about the "law of value of commodities in Ch XIV  Section
4  goes on to say "But this constant tendency to equlibirum ... is
exercised only in the shape of a reaction against the constant upsetting of
this equilbrium." This to my mind makes it sound much more like a strange
attractor than a simple equation.

There is the strange argument that the law of value only begins to develop
itself freely on the basis of capitalist production (Ch XIX) which Engels
appears to support by his argument in the appendix to Vol III of Capital on
the Law of Value, which argues that the LOV has been in existence for at
least 7,000 years.

In stating this Engels, has a throw-away qualification "as far as economic
laws are valid at all"

In the essay he considers various definitions of the law of value and does
not insist on only one.

Furthermore he asks people to make "sufficient allowance for the fact that
we are dealing with a historical process and its explanatory reflection in
thought, the logical pursuance of its inner connections."

So this is a declaration of philosophical realism - that something has
emerged in the course of economic history and that a law describing it is
not a purely logical process but an explanatory reflection in thought of
that real process.

The phenomenon itself may be complex enough but the reflections in our
brain could be fuzzier still. Nevertheless the complex phenomenon DOES exist.


> >Chris Burfod: Crudely, the difference between LTV and LOV is the
> difference between a
> >simple equation, which may indeed be weak nourishment, and a dynamic
> >system.
> >
>
> Justin: It's possible, and a standard move of defenders of Marxian value
> theory, to
> make immune from testing and criticism by making it so fuzzy that it lacks
> determinate meaning. Who could object to asytstems-dynamical approach to the
> economy?
>
> ^^^^^^^^
>
> CharlesB: Here's an example of what I am talking about on AM. It is
> Justin's understanding that seems fuzzy here . Chris Burford's seems to
> have quite adequate determinate meaning.  The difference Chris describes
> is also that between moving from the whole to parts and moving from the
> parts to the whole. A holistic approach is not fuzzier than an approach by
> parts. ( See Jim D.'s discussion of this issue elsehere here)


Obviously like Charles I am a believer that there is some such thing as a
capitalist economy and that it has a self perpetuating dynamic. As in chaos
theory, it is possible to posit something that is determinate but is
indeterminate in precise form: deterministically indeterminate is a serious
mathematical concept. As is fuzzy logic.

But I suspect that Justin's clearest line of demarcation is in the
importance of any theory being vulnerable to "testing and criticism". This
is a standpoint of a philosophical approach that objects to theories like
those of Freud or Marx on the grounds that they are not falsifiable. This
is the old argument that it is not sufficient to be able to shape and
affect a theory by empirical testing: we cannot even dare to think it
unless it is testable by methods currently available to us.

Thus the serious cosmological theory that there could be a multiverse of
universes should not be allowed to be discussed because it is by definition
not falsifiable, even though it could fit a number of facts. Just as the
existence of God could explain a whole lot of facts. Models of science need
to be able to address such theories from a number of angles and not just
rely on a rule that all theories must be vulnerable to testing and
criticism, desirable though these are.

When you consider how fuzzy conventional mainstream economics is, it seems
to me  masochistic to deny ourselves the right to explore  the relevance of
a theory which gives explanatory meaning to a number of the features of the
capitalist economic system just because it  is fuzzy and not falsifiable.
Can we afford not to explore this approach further under new conditions of
intensified globalisation?

Chris Burford

London