Re: cambridge criticism

["michael a. lebowitz" <mlebowit@xxxxxx>]

At 13:46 10/01/2006, Julio wrote a very interesting response to my question:
> > 'where's the beef?' What exactly
> > are you finding in the development of that [neoclassical] theory
> that, for example,
> > will help us to understand capital? And, what will help us to
> > understand what's necessary to go beyond capital?

As a way of evading all the stuff that is stressing me at the moment
(eg., a chapter), let me make 2 partial responses. The more trivial
relates to his dismissal of the cambridge criticism (which I haven't
thought about for many years... and intend to keep it that way :-D).
        I wrote:

> >        Really, it's not enough to say that there's confusion in the
> > ranks of the enemy or that some economists are not quite rightwing
> > republicans (ie., that they resist the inherent logic of the dominant
> > theory). No immanent challenge that you describe can compare to that
> > which was advanced years back by the Cambridge criticism (in
> > particular, Robinson's challenge that the sum of capital is not
> > independent of the interest rate).

Julio answered:

> My balance of the Cambridge critique is very different.  As far as
> conventional economics is concerned, the neo-Walrasian approach
> (general equilibrium) bypassed the issue altogether.  (That doesn't
> mean that general equilibrium is beyond critique, but Robinson's
> doesn't touch it.)  But, frankly, from the point of view of Marxism,
> the idea that you cannot coin an abstract concept of physical "means
> of production in general" ("capital" in Cambridge terms) and come up
> with a necessarily imperfect but *workable* operational measure to
> match that concept (an "aggregate measure of capital") is ludicrous.

True, the neo-Walrasian approach did bypass that critique, but for me
that response was always the 'bait and switch' approach. What has
done ideological service has never been the neo-walrasian GE stuff
but, rather, the good old marginal utility everyone gets what she
deserves (as long as....) mantra. So, a challenge to the idea that
the return that capital is determined by its marginal contribution on
the basis that the very summing of capital requires the interest rate
did make folks a bit uneasy  (a LOT more than-- what are you assuming
about perfect knowledge, absence of uncertainty?). Those were the
days (long past) of raising a hand in class and seminar and asking,
excuse me, sir, when you use the term capital here, do you mean the
sum of productive equipment employed or the stock of money
invested...? The sophisticated response (not many of those)
ultimately was bait and switch--- ie., on to GE theory.

> Not that it matters to the question, but thinking in terms o Marx's
> two-department reproduction analysis, for example, would be precluded.

This is not clear to me--- what does this have to do with relative
flows of value and labour allocation in the 2 departments?

>  I don't know of any Marxist settling this issue satisfactorily, but
> in my mind I am personally at peace with the problem.  And here's in a
> nutshell why:
>
> Setting aside the duh fact that aggregation in empirics -- as
> abstraction in theory -- entails the loss of information, the main
> claim is that the weights in the aggregation are smuggled *value*
> notions (intertemporal shadow prices that aggregate as the average
> profit or interest rate).

Is that the claim or was it that conclusions were embodied in the
premise--- ie., that the tendency was to aggregate by assuming that
the marginal product of labour was accurately captured by the wage.
Maybe other people remember this stuff better, but wasn't this an
important part of the critique of the use of the aggregate production
function? Maybe, in fact, you can tell us what YOU do: you do
empirical, econometric studies. Do you use any nice shortcuts that
have the effect of smuggling neoclassical premises in order to create
that 'workable operational measure'? If so, the issue is more than
one of 'the loss of information', no? Maybe for some purposes it will
be workable.
        in solidarity,
        michael

Michael A. Lebowitz
Professor Emeritus
Economics Department
Simon Fraser University
Burnaby, B.C., Canada V5A 1S6

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