Re: "Debunking Economics" and Marx's value theory

["Steve Keen" <stevekeen10@xxxxxxxxxxx>]

Dear Fabian,

Thanks for a thoughtful post. I'll address the two issues you raise
separately.

Firstly, on the internal sociology of economics. I will agree that it is
difficult for economists to "stand outside themselves", even when they are
critical of economics itself, and observe the sociological milieu which to
some extent conditions what they write. I try to do this to some degree, to
explain the behaviour of neoclassical economists--and I hope I do that
passably well. But I accept that there are aspects of my own research which
are affected by the milieu of being an economist. This might explain why I
reach the tentative conclusion that economics is a "science, though a
pathological one", whereas someone from a physical science background might
riposte "bah humbug" to any attempt by economists to call themselves
scientists.

So I will see what I can do to sharpen my sociological perspectives as I
redraft the book.

On your second point, my chapter criticising marxian economics, I have
several replies. Firstly, I don't know whether you attended the talk I gave
at the New School this month on my interpretation of Marx. If you had
attended, you might at least have appreciated why I take my particular
approach to criticising marxian economics--though I doubt that I would have
persuaded you (at least going on the reactions of Anwar Shaikh and Andrew
Kliman, who were in the audience).

Briefly, the reason I don't mention the TSS approach to solving the
transformation problem is because that school treats the proposition that
labor is the only source of value as a premise in Marx's logic, and then
attempt to show that this can be maintained in a dynamic interpretation of
production.

I dispute that this was a premise of Marx's--or rather, I argue that it
*was* a premise of his up until 1857, when he developed a broader analysis
which he believed enabled him to *derive* this result from a higher,
dialectical logic.

I then argue that Marx incorrectly applied his own logic, since when
properly applied it *contradicts* the proposition that labor(-power) is the
*only* source of (surplus) value. Instead, I argue that Marx's higher logic
leads to the premise that *all* inputs to production are potential sources
of surplus value. In which case, surplus cannot be apportioned to inputs in
any meaningful way, so that Marx's theory of value in fact supports a
general Sraffian/Post Keynesian "surplus" approch, rather than the labor
theory of value.

Given that perspective, I see the TSS school as conducting a forlorn attempt
to preserve Marx's pre-1857 labor theory of value, when properly
interpreted, Marx himself transcended this approach.

If you want to explore my arguments in more detail, Leanne Ussher has copies
of my published papers on this (from the Journal of the History of Economic
Thought, 1993 Spring and Fall). You can also consult the PKT archives under
my name for a more extensive treatment from my Masters thesis.

I have on occasions toyed with the idea of undertaking a dynamic critique of
the TSS approach--I expect that I could prove that their model suffers from
the same ignominies which Steedman pointed out for what the TSS call the
"simultaneist" version of Marx, of positive rates of profit and negative
rates of surplus value. But I have other, more pressing things to do with my
time.

So I don't believe my treatment of Marx is a product of the unconscious
milieu of being an economist, and therefore blindly trying to "PROVE THE
EVIL SPIRIT (MARX) WRONG", as you say. Instead, I see it as being an attempt
to retrieve the great insights of Marx from obscurity. I'm afraid that
obscurity will be his fate if his only advocates are those who believe in
the labor theory of value, for reasons which I feel are at least as
sociologically based as are the beliefs of neoclassical economists.

While TSS and other schools of Marxist scholars believe they are preserving
Marx's insights, and hope that they are developing them, I believe--on the
basis of my own reading--that they are obscuring his greatest insights. But
I have faced normally only hostility to my interpretation when I have
presented it to Marxists (though there have been some exceptions, and the
reception in the history of economic thought arena was quite different).

That is the reason I make an extensive quote from Marx's own PhD: Marx
realised that great philosophers could make mistakes, and argued that it was
the duty of his followers to properly apply their insights. I feel that
marxist economists are so wedded to the labor theory of value that they are
inured to the true basis of Marx's analysis, and therefore have failed to be
true to Marx.

Cheers,
Steve
PS This might not make it to PKT because I am posting from a different email
address. If this is correct, I would be obliged if you would copy it there.

> From: aldo balardini <balardini@xxxxxxxxx>
> To: pkt@xxxxxxxxxxxxxxxx
> CC: balardini@xxxxxxxxxxxxx
> Subject: "Debunking Economics" and Marx's value theory
> Date: Fri, 19 May 2000 09:01:51 -0700 (PDT)
>
> The following are comments regarding the sociology of
> the economics profession that came to my mind after
> reading a couple of chapters of "Debunking Economics"
> followed by questions to Steve Keen.
>
> Some time ago I was searching for material on the
> sociology of the economics profession and soon became
> very dissappointed with the lack of critical material
> in this area.  However, the literature does have some
> some jewels like the article by Leijonhufvud, "Life
> Among the Econ", which is great leisure reading as
> well as a really good and funny critique of
> sociological aspects of the economics profession, as
> Steve points out on the second chapter of his
> "Debunking Economics".  But unfortunately, I was again
> dissappointed with the lack of internal critique of
> this article.  See, what I was (and still) looking for
> was a piece in which an economist, an insider,
> criticizes those sociological aspects of the
> profession that applies to him/her even in his/her
> position as a heterodox economist. Most critiques of
> the economic orthodoxy comes from heterodox economists
> that somehow feel that they, in their position as
> member of an alternative school of thought, are free
> from certain sociological influences that affect all
> practitioners of the profession.  In reality, from my
> point of view, heterodox economists are affected as
> much or even more by the same sociological factors
> that affect their orthodox colleagues because in their
> decire to somehow acquire recognition from their
> fellow heterodox economists they practice accepted
> "critical behavior".  What is missing is the critique
> of certain features underlying this behavior that make
> heterodox economists blind in their critical assesment
> of different economic theories even when confronted
> with counter-supportive evidence right in front of
> their eyes.  The best example of this, and something
> that Leijonhufvud fails to address, is the never
> ending quest of the ECON TRIBE TO PROVE THE EVIL
> SPIRIT (MARX) WRONG to use his own language.  Steve's
> chapter 14 testifies to this "supersticious" practice
> of insisting in accusing a theory (Marx's value
> theory) of "logical inconsistency" even when as a
> member of OPE-L he is familiar with an interpretation
> (TSS) that has for the last 20 years proven, or
> "solved", many times over the very same aspect (the
> transformation problem) that he identifies as being
> the cause of the logical inconsistency in Max's (the
> devil) theory.
>
> My question to you Steve is whether you have ever
> thought about these sociological aspects and practices
> affecting your own work and which is so well accepted
> and encouraged among the "heterodox Econ tribe" or
> your fellow Sraffian, Neo-Ricardian and (most but not
> all) Post-Keynesian theorists.  In case you don't
> understand what I am saying, I would like to know why
> do you argue in your book that Marx's value theory is
> logically inconsistent without mentioning that there
> is a group of authors (TSS) who have refuted every
> single one of those charges of inconsistencies in
> Marx's value theory.  Isn't this a practice closer to
> religious than to scientific procedures?  Why should
> we call the supply and demand framework "superticious"
> as you do in chapter 2, but ignore your own
> supersticious practice of presenting bias accounts of
> the theoretical debate regarding Marx's value theory
> in chapter 14?
> In addition, I would like to know what are your views
> on the TSS and why you completely ignore these views
> on your book, especially in chapter 14.
>
> Fabian Balardini
> PhD. student
> Graduate Faculty
> Economics Department
> New School for Social Research
> New York, New York
>
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