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RG1: Online reading group: Value, Price and Profit - Marx

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MJ
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Jan 6 2006 15:29

Chris if you don't feel a Wikipedia entry goes into enough depth yet you should edit it.

gurrier
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Jan 6 2006 15:47
redtwister wrote:
Which brings me to a methodlogical point: citing Wikipedia is even less convincing than citing a regular encyclopedia, which as far as I remember my teachers had stopped allowing me to use in 8th grade. This is because Wiki, like an encyclopedia, is a condensed, Cliff Notes version of an argument, it is the McDonald's of knowledge: fattening, greasy, unhealthy and it makes you lethargic and less aware. I don't see the point of reading Marx or any serious thinker if all you are going to do is read a low budget, abridged Cliff Notes for commentary.

1. Wikipedia is as accurate as the scientific britannica according to the only proper evaluation of it (carried out by nature).

2. Linking to wikipedia entries is a very good practice IMO since they normally provide fairly concise introductions to a topic and people are far more likely to read this than they are to read a whole tome about a new subject - since they can't know, in advance, if the tome is worth reading. That is, if the purpose of the citation is to be helpful rather than to show off.

I found the entry on the transformation problem interesting, although the difficulty of measuring the variables in the equations does seem to make the whole thing a bit academic.

gurrier
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Jan 6 2006 15:50
afraser wrote:
Marx says here that socially necessary labour time determines equilibrium price.

He is wrong with that, it is false.

To return to this, does this imply, in your view, that Marxian value is essentially impossible to measure and if so, how is the concept more useful than, say, the concept of 'the soul'?

redtwister
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Jan 6 2006 15:55
gurrier wrote:
georgestapleton wrote:
No he definitely means exchange value and not use value. Use value has nothing to do with price level that is exchange, use value plays a part in consumption but not in exchange. And exchange value is not a median around which price flutuates. It is the exchangability of a commodity. It relates closely to natural-price of classical economics but it has no parralel in the post marxian economic orthodoxies. The closest thing to a parrellel to exchange value in economics is the long run cost price in perfect competition. (Cost price is equal to market price in long run perfect competition, but I'm saying cost price and not simply price to emphasis the determining factor of price in perfect competition i.e. cost).

The notion of a commodity's exchange value being the median around which price fluctuates is taken directly from capital, but in the context of this pamphlet, you are still clearly contradicting marx:

Quote:
Price, taken by itself, is nothing but the monetary expression of value

Two quick notes.

1. George is not quite correct in his assertion that use-value has nothing to do with exchange: if an article is of no use to anyone and cannot be sold, it has no exchange-value.

2. what does it mean to say that price is the monetary expression of value?

What is value? It is a social relation or rather a form of social relation. Marx constantly refers to the value form, money form, commodity form, etc. This means that these things are the mode of existence of something else, the way in which some essence appears to us, and as such this form is both an abstraction and real or a determinate abstraction.

Value is the relation between capital and labor. Value represents the successful compacting of a maximum amount of human labor power, measured via time, into an object which then appears not merely as a thing for our use, but as a commodity: a use-value and an exchange-value.

Let's backtrack a moment. Why labor as the source of value?

1. Value is a social relation, it is not a natural property of things or of people.

2. Values have the property of being measurable, of being quantifiable because

3. owners of commodities make them in order to exchange them, and need to know in what proportion a fair or equal exchange obtains.

4. Surplus value cannot be generated in the act of exchange because then all you are doing is robbing Peter to pay Paul. There is by definition never a fair exchange, an exchange of equivalents.

5. Surplus value is not added by the labor the capitalist, since the capitalist's only labor is to watch. In fact, Marx's discussion of why you can't treat value as wages + profit + rent + interest is quite clear.

6. Fluctuations in supply and demand do not determine a surplus of value, only price fluctuations. To claim otherwise is simply to beg the question of how value is determined. In the real world, if you did not take into account the cost of means of production, raw materials, and labor and said your price was imply determined by supply and demand, you would be laughed out of the market or an Internet start-up (laughed out of the economy after suckering some people.)

7. If this is the case, then new value must be created outside of the act of exchange, but in relation to equipment, raw materials and labor. Can equipment and raw materials be the source of value? No because as we already said, value is a social relation. If machinery and raw materials have value, it is only in the same sense that every commodity does and they can only transfer that value, they cannot create new value.

8. This leaves labor. The simple fact is that human beings can and do produce more than they themselves need to survive, a very social capacity. Hence, the reason that the source of value is human activity.

However, it is human activity in a very specific form, as both concrete and abstract labor, as labor that is turned into pure quantity producing a product that can be treated as a pure quantity. The medium which facilitates exchange then itself must be a use-value which exists as pure quantity and whose only use is as a medium of exchange, a measurement of value, as the representative of pure exchange-value. That brings us to

"Monetary expression of value"

Money is the perfect and meaningless form of value: it has no use-value except as pure, abstract value, and as such it can be exchanged for any and all values. Money is the form of value, and price is the monetary expression of value, so price is also a form of value, but value not as a social relation, but as a thing, as money.

Please note, that while value is determined by the socially necessary labor time expended, price is determined by supply and demand, in exchange. Value only exists through exchange, but value is also only measured in the market, qua price. And Marx clearly and briefly discusses the movement of market prices against natural price (which assumes a value already brought to market.)

Following from this, instead of trying to leap directly into the world market without considering all of the mediations involved (Marx wrote 3 volumes of capital and you want to go into it after reading a lecture that was never even intended ot be published), let's keep things at the level of this booklet.

1. If human labor power as a specific, alienated form of human social activity is not the source of value, what is? Or is there no cuh thing as value, only prices?

2. If human labor power does exist as value, why is it that this activity takes this form? This is ultimately what Marx was trying to discover. He was primarily concerned with why human activity takes the form of value, money, commodity, etc.

Quote:
Again, you are disagreeing entirely with marx and contradicting yourself. To Marx the value of a commodity is determined by the quantity of socially necessary labour used to produce it, not the value of the labour (which you then go on to contradict by claiming that labour has no value).

Actually, Marx is quite explicit that labor has no value. Labor power does. Marx's points are quite clear on this, but the reading group has not gotten to that chapter yet.

Quote:
If you wanted to try to explain the low prices of third world commodities within Marx's LTV, you could claim that the labour used is of a very low average productivity and hence represents only a fraction of the socially useful labour that is embodied in the commodity. In many cases you'd have a good point as most third world agriculture uses 'backward' methods and does not take advantage of mechanisation, etc. However, it does not hold across the board since, for example, the Chilean Copper industry is the most advanced and mechanised in the world and the price of copper on the world market is still typically low compared to the labour embodied in it.

This is completely confused. You mess up price and value here utterly, as well as incomparable situations. none of this reflects against Marx, I'm afraid.

1. Low labor value is not the only factor. For example, let's say that in Angola we have a shirt maker who spends $50 on equipment, $500 on raw materials and $25 on labor, and has a rate of exploitation of 100%, to produce 500 shirts in a week.

50+500+25+25 = 600 or a value of $1 per shirt. This is a cheap shirt, and the rate of exploitation is very high, but the actual quantity of profits is very low.

If it is not effective to employ more advanced machinery, then producing these same shirt in the U.S. would involve more expensive labor, say $225 a week. If the rate of exploitation is the same (100%) then we have

50+500+225+225 = 1000 or a value of $1.67 per shirt.

The Angolan shirt is cheaper and the rate of surplus-value is the same. The Angolan shirt will generally drive the U.S. shirt out of the market because in fact the average socially necessary labor will be at the Angolan level and this will force the U.S. maker to sell at market value or to move their production to somewhere with lower wages.

Now, let's say that U.S. productivity is 3 times higher than Angolan, such that they produce 1800 shirts.

Suddenly, the U.S. shirts have a value of $0.55 or almost half the price. So clearly productivity is a key issue and more expensive labor can produce cheaper shirts. The rate of exploitation is also still the same and on top of it, the U.S. company has a much larger mass of surplus value: $225 vs. $25 or 900% more capital!!!

2. Organic composition of capital in Chilean copper

Let's say that machinery is $450, raw materials $50 and labor $450 in order to produce 1500 tons of copper a week, at a rate of surplus value of 100%.

450+50+450+450 = 1500 or $1 per ton of copper.

Now let's say the in the U.S. they spend more on means of production and raw materials, but at the same level of productivity and wages

600+100+450+450 = 1600 or $1.07 per ton of copper

the wages can be the same, but if the machinery is more expensive or the raw materials are more expensive, even though both companies pay their workers the same and they have the same degree of producitvity. The US company is force to sell at a lower price. in this instance, they may buy a Chilean company instead of moving their means of production (which were more expensive) or they may accept to sell at the market price and not make quite as much (they lost $105 per week by selling at market value, but that is still a surplus of 345 or a rate of surplus value of 77%) because they have sunk considerable capital into the enterprise and depreciation is worth it.

These examples could be complicated in an almost infinite number of ways. U.S. domination of world money through the dollar gives them enormous advantages that may wipe out or even reverse this difference in productivity in the short and medium term. Demand increasing in the U.S. and decreasing in Latin America may cause shipping rates to make it cheaper to buy the more expensive U.S. copper because shipping adds $0.20 a ton from Chile, but only $0.10 a ton from the U.S. But those possibilities add a level of complexity precluded from this pamphlet and irrelevant to this discussion.

So...

Back to the question of how value is formed, if value exists, etc. This cannot be answered with excursions into world copper or oil production. This does explain why Marx explicitly chooses what variable he holds constant at any given moment and the difference between using value to analyze prices and using it to explain why human activity takes the form that it does and why this is insane and inhuman.

Chris

redtwister
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Jan 6 2006 16:23
gurrier wrote:
redtwister wrote:
Which brings me to a methodlogical point: citing Wikipedia is even less convincing than citing a regular encyclopedia, which as far as I remember my teachers had stopped allowing me to use in 8th grade. This is because Wiki, like an encyclopedia, is a condensed, Cliff Notes version of an argument, it is the McDonald's of knowledge: fattening, greasy, unhealthy and it makes you lethargic and less aware. I don't see the point of reading Marx or any serious thinker if all you are going to do is read a low budget, abridged Cliff Notes for commentary.

1. Wikipedia is as accurate as the scientific britannica according to the only proper evaluation of it (carried out by nature).

2. Linking to wikipedia entries is a very good practice IMO since they normally provide fairly concise introductions to a topic and people are far more likely to read this than they are to read a whole tome about a new subject - since they can't know, in advance, if the tome is worth reading. That is, if the purpose of the citation is to be helpful rather than to show off.

I found the entry on the transformation problem interesting, although the difficulty of measuring the variables in the equations does seem to make the whole thing a bit academic.

Like Britannica indeed. And that's my point. I was not allowed to use an encyclopedia as a reference from high school forward, and for good reason.

The transformation problem wiki is a good case in point. It is narrowly economistic and makes assumptions it does not formally state or even seem aware of. IMO, if one starts with this bit of wag, one will be hopelessly lost, but that's me.

For strictly factual matters (dates, places, times, names of people or publications and sometimes a list of references) Wiki is useful, but it is nearly useless, if not outright misleading, for historical, scientific and theoretical discussions. It is Cliff Notes, as Cliff Notes are Britannica, and Britannica is Funk and Wagnals. In fact, it presents as scientific what is not. Hence th Transformation Problem article ends with the same call to falsifiability that you call to, but which Popper himself dropped after the critique of it by Kuhn and Lakatos. But again, that is another matter.

Chris

redtwister
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Jan 6 2006 16:27
MJ wrote:
Chris if you don't feel a Wikipedia entry goes into enough depth yet you should edit it.

Its not a question of editing it. I would end up re-writing it because it is a primarily theoretical problem, not a merely factual problem. At that point, Wiki is a battle ground for theoretical interpretations. then let's just admit that Wiki is either going to be very convoluted or express merely a point of view and that no article on a theoretical and political subject can possibly b presented as purely objective.

At best, I would say to note the historical discussion, to present now discussion of the problem itself, to even say that its status is in question, and then cite the relevant texts in the debate. in other words, my entry would say very little about the problem itself, since I believe it is a phony problem for the most part.

Chris

redtwister
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Jan 6 2006 16:56
JoeBlack2 wrote:
The whole basis Marxs argument in these 6 chapters is to establish a strong relationship between value and price - against Citizen Weston's supposed argument "that the amount of real wages, that is to say, of wages as measured by the quantity of the commodities they can buy, is a fixed amount, a constant magnitude."

Marx needed to establish a strong value/price relationship in order to defeat Weston's argument - the sort of loose relationship being argued by some here would allow space for Weston's argument to apply, at least for periods and so defeat marxs original purpose. So although the first 5 chapters may read like a load of outdated waffle against someone we have never heard of they are of value in establishing what marx was arguing.

So do you agree with Weston that the real wages form a fixed amount?

And why disparage Marx if you are reading him? Or are you just doing this to disabuse the large mass of Marx supporters on this list of their naive fideism?

Also, Marx did establish show the relationship between value and price (price as the monetary expression of value), but that included that value is not price and that price and value need not obviously correspond.

Please show me a logical relation that ties in the form of class relations with exploitation and its appearance as a society of equality, liberty and freedom better than Marx's critique of value as a particular, historical form of social relation predicated on the alienation of the worker from the means of producing.

And please tell me this: What do you want out of Marx? Why are you reading him? To figure out fluctuations in market prices? What is your purpose here?

I don't mean that in a hostile fashion, but what, are we an economics debating society or do you propose that there is a better way to explain why capital is inhuman? If there is a better explanation, bring it. Most of the critiques of Marx and the fetish of the transformation problem were designed to defend capitalism as a logical, rational, natural society.

Marx is after people like Weston not for having a different critique of capital, but for letting capital off the hook and taking up positions that defend capital. Clearly, Weston's arguments against strikes and against workers' organizing themselves were conservative arguments.

Do you support Weston's arguments? Do you have a better critique of them than Marx?

I know afraser and Lazy's arguments, and frankly IMO they want capitalism lite, Proudhonian petty commodity relations. I don't think that gurrier and JoeBlack2 are after that vision, but what is the link between your politics and your critique of Marx? What in your opinion does Marx do tht let's capital off the hook, that provides an insufficient critique?

chris

redtwister
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Jan 6 2006 17:50
gurrier wrote:
It is, or was intended to be a means of analysing value and where it comes from - far more ambitious than just a sketch of how exploitation works.

Analyzing value and where it comes from.

What does that mean to you? Marx was analyzing where value came from and declared it was the product of exploitation, of a set of human social relations in which relations between people appear as relations between things, in which chairs are acting subjects and people are objects of commodities.

There is a necessary element of showing how such relations can be quantified because in exchange everything must be quantified, so Marx is trying to show how it is that qualitatively incommeasurable labors can produce generic, uniform, purely quantitative labor, while qualitatively incommeasurable products can be treated as merely quantitatively different (3 chairs have the same quantitative measure as 1 table).

What Marx is not required to do is to claim that we can actually generally get accurate measurements of these things in practice. We can try, and marx does, but at least to things get in the way:

1. Capitalists do not measure using value of labor power.

2. The value of labor power is only established after the fact, in the market, behind our backs. This is where competition and anrchy come into play.

3. Measuring value would require a level of access to information that is impossible because cpital does not consciously control interactions, but allows the free interplay of the market, making actual measurement at best educated guess work even with better information.

in this, Marx is no worse than any other theory, and he has the merit of stating the problem honestly.

Chris

gurrier
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Jan 6 2006 17:53
redtwister wrote:

Two quick notes.

<massive snip>

grin

In skipping over this contribution I missed the lesson in basic marxism aimed at me - which completely missed my point - I pointed out that the chilean copper industry is the most productive in the world. My point is that, since price is the only way we have available of measuring value, when we have a world where prices of commodities consistently and massively fail to accurately reflect the marxian value of the commodity then we can treat marx's theories of value as, at best, part of the picture.

As it happens I do have a fairly good idea as to why Chilean copper prices are so consistently depressed and I don't think it contradicts marx's LTV, but I also think that it shows us how Marx's economics are completely insufficent in terms of understanding the world.

Quote:
I don't mean that in a hostile fashion, but what, are we an economics debating society or do you propose that there is a better way to explain why capital is inhuman? If there is a better explanation, bring it. Most of the critiques of Marx and the fetish of the transformation problem were designed to defend capitalism as a logical, rational, natural society.

The whole point about trying to relate marxian value to the real world (ie through prices or some other measurable metric) is that, if we don't have such a validation of the theory, then we are left with Marxism as being faith based and once we are in that domain there are much better explanations of why capital is 'inhuman' - because god is noble and just and he wants us all to live in eternal happiness - for example. Indeed I find that Marx's concept of man's alienation from the fruits of his labours as the source of capitalism's 'inhuman' nature to be particularly weak. His economics are far more interesting in my mind and have much better evidence behind them. Actually I think that the alienation stuff is pretty much rubbish.

redtwister wrote:
Back to the question of how value is formed, if value exists, etc. This cannot be answered with excursions into world copper or oil production. This does explain why Marx explicitly chooses what variable he holds constant at any given moment and the difference between using value to analyze prices and using it to explain why human activity takes the form that it does and why this is insane and inhuman.

Which I take to mean 'away from reality and back into theology".

redtwister wrote:
that while value is determined by the socially necessary labor time expended, price is determined by supply and demand, in exchange.
Marx wrote:
You would be altogether mistaken in fancying that the value of labour or any other commodity whatever is ultimately fixed by supply and demand. Supply and demand regulate nothing but the temporary fluctuations of market prices.

Sounds like an utterly unambigous contradiction to me, I've not seen such wildly tenuous re-interpretations of texts since last time I went to mass! But better still was the following:

Quote:
"The market price expresses only the average amount of social labour necessary, under the average conditions of production, to supply the market with a certain mass of a certain article. It is calculated upon the whole lot of a commodity of a certain description."

Marx clearly here is talking about Market Prices as Natural Prices, or where price = value

I'd say that he's clearly taking about, urm, market prices? But then I'm not a priest of marxism...

redtwister
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Jan 6 2006 17:54
gurrier wrote:
redtwister wrote:

Two quick notes.

<massive snip>

Yeah, quick ain't my strong suit. embarrassed

lem
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Jan 6 2006 19:17
JoeBlack2 wrote:
the sort of loose relationship being argued by some here would allow space for Weston's argument to apply, at least for periods and so defeat marxs original purpose.

I don't know what I'm talking about but why would price equalling value or mean that wages would equal a fixed amount? Could not the capatalist have a decrease in profits, which are only set by convention, as competition only makes them equalize?

Lazy Riser wrote:
However, value and price are not Boolean expressions but reals (or arbitrary scalars for the sake of argument). Where A and B are real, then A = B implies B = A.

I have no idea if this is true. If so I would have thought that if price is X, then value is X.

redtwister
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Jan 6 2006 21:41
gurrier wrote:
In skipping over this contribution I missed the lesson in basic marxism aimed at me - which completely missed my point - I pointed out that the chilean copper industry is the most productive in the world. My point is that, since price is the only way we have available of measuring value, when we have a world where prices of commodities consistently and massively fail to accurately reflect the marxian value of the commodity then we can treat marx's theories of value as, at best, part of the picture.

As it happens I do have a fairly good idea as to why Chilean copper prices are so consistently depressed and I don't think it contradicts marx's LTV, but I also think that it shows us how Marx's economics are completely insufficent in terms of understanding the world.

It was not meant as a lesson, but as an attempt to work through what you said in a way that could be more than a mere argument, but could use some examples to explain why I took your formulation as confusing several different theoretical issues (changes in productivity, fluctuations in supply and demand, changes in the cost of labor, whether or not high labor cost directly causes high values or low values, etc.) with the actual situation of Chilean copper, which operates on a level beyond what we are addressing here. You want to go from Chapter 1 volume 1 of Capital to the middle discussion of world market in Volume 3, but without looking at the mediations, the steps from here to there, what takes us from value to price, that fact that they operate at different levels of abstraction, etc. To me, this is confused. However, if that came off as an unfair and personal accusation, I apologize. I did not mean to argue that you are, as such, confused, but that in this instance you were confusing issues by skipping levels of analysis.

If you see no contradiction between your explanation and “Marx’s LTV”, then I don't see where you are having a problem with Marx's analysis. Is it that in Value, Price and Profit he does not get to that level? Or are you disappointed that the world market and those kind of price fluctuation only show up in volume 3 of Capital, which he doesn't finish?

I do indeed not see your point, apparently. After all, i find it slightly confusing when you posit that it works within Marx's critique of political economy, but Marx’s analysis is insufficient to make sense of it.

Quote:
Quote:
I don't mean that in a hostile fashion, but what, are we an economics debating society or do you propose that there is a better way to explain why capital is inhuman? If there is a better explanation, bring it. Most of the critiques of Marx and the fetish of the transformation problem were designed to defend capitalism as a logical, rational, natural society.

The whole point about trying to relate marxian value to the real world (ie through prices or some other measurable metric) is that, if we don't have such a validation of the theory, then we are left with Marxism as being faith based and once we are in that domain there are much better explanations of why capital is 'inhuman' - because god is noble and just and he wants us all to live in eternal happiness - for example. Indeed I find that Marx's concept of man's alienation from the fruits of his labours as the source of capitalism's 'inhuman' nature to be particularly weak. His economics are far more interesting in my mind and have much better evidence behind them. Actually I think that the alienation stuff is pretty much rubbish.

Ah, now there's the rub.

First things first, quantifiability and measurability are not the only thing in the world that make something scientific or real, nor are all real things quantifiable. Biologists and social scientists alike have tried for years to measure intelligence, IQ. Does that mean that IQ exists or that any numbers past a certain point are meaningful? Does turning making poker chips into abstract value commeasurable with the labor that produces potatoes meaningful? Can you measure a love relationship? Can you quantify it? Can you quantify why something upsets me and another thing does not? Only for capital is quantifiability a predicate of reality. You suppose, and do not want anyone to question,, what you take to be science, however your conception of science is simply no different from standard bourgeois science, IMO. This is no insult, we all labor to get away from the same problem, that the dominant ideas are the ideas of the ruling class. We all more or less fail, especially as individuals. That’s life under capital. But my comments directed at what you seem to be taking on faith, without realizing that it presents a problem. Clearly, the first problem you have with Marx is that you don’t like anything that can’t be quantified and Marx insists that the desire to quantify everything, to abstract from their qualities, is itself the very core of capital.

that is a very different discussion than the one you have been pursuing. I surely won't surprise you in arguing that without the concept of alienation, there is nothing else in Marx, though he moves from that concept to fetishism, the alienation of the worker from the means of production is still part and parcel of his analysis of capital.

Do you think Marx is on some weird use of the term? To me, it is quite practical. (cf "you take 36 seconds to do a job on the assembly line, and you will repeat that task every 36 seconds for the rest of your life")

Quote:
redtwister wrote:
Back to the question of how value is formed, if value exists, etc. This cannot be answered with excursions into world copper or oil production. This does explain why Marx explicitly chooses what variable he holds constant at any given moment and the difference between using value to analyze prices and using it to explain why human activity takes the form that it does and why this is insane and inhuman.

Which I take to mean 'away from reality and back into theology".

No, back to science. All science holds different variables in check at any given moment to isolate one aspect of a problem. Also, science seeks to unravel the relationship between appearances and content. Of course, you have a notion of science and you do not seem to want anyone to challenge that, so you call them "priests", "religious", or whatever other term.

Quote:
redtwister wrote:
that while value is determined by the socially necessary labor time expended, price is determined by supply and demand, in exchange.
Marx wrote:
You would be altogether mistaken in fancying that the value of labour or any other commodity whatever is ultimately fixed by supply and demand. Supply and demand regulate nothing but the temporary fluctuations of market prices.

Sounds like an utterly unambigous contradiction to me, I've not seen such wildly tenuous re-interpretations of texts since last time I went to mass! But better still was the following:

Let’s be clear. That is completely taken out of context. Read what follows:

“Value only exists through exchange, but value is also only measured in the market, qua price. And Marx clearly and briefly discusses the movement of market prices against natural price (which assumes a value already brought to market.)”

Value is only measured in the market qua (as) price. Wow, so value and price are not only connected, but value is measured in the market as price. Not only that, but Marx discusses the movement of market prices against natural price, according to me. You take a single line out of context and then make some lame personal dig.

You try to pretend that I am arguing that value and price have no relationship. But in fact you know perfectly well, from every e-mail of this discussion, that I do not hold to the idea that price and value have no relation in Marx, nor do I disagree that value is the grounding point around which price fluctuates.

Quote:
Quote:
"The market price expresses only the average amount of social labour necessary, under the average conditions of production, to supply the market with a certain mass of a certain article. It is calculated upon the whole lot of a commodity of a certain description."

Marx clearly here is talking about Market Prices as Natural Prices, or where price = value

I'd say that he's clearly taking about, urm, market prices? But then I'm not a priest of marxism...

I was speaking to afraser, who has a fondness for the bourgeois economists’ concept of equilibrium price, which Marx would have held as meaningless. I hope JoeBlack2 sends a message to the list telling you to remain civil, unless he only does that to Marxists who challenge the two of you. That said…

Marx is here talking about market prices, I’m glad we agree on that. Afraser happened to claim that there was a problem with Marx’s formulation and I was responding to that by indicating that the degree to which market price was more or less natural price, ie its possible conditions of deviating from natural price, were already made by Marx and had afraser read that carefully, he would have seen that his objection was not applicable.

Chris

georgestapleton's picture
georgestapleton
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Jan 7 2006 02:23
gurrier wrote:
redtwister wrote:
that while value is determined by the socially necessary labor time expended, price is determined by supply and demand, in exchange.
Marx wrote:
You would be altogether mistaken in fancying that the value of labour or any other commodity whatever is ultimately fixed by supply and demand. Supply and demand regulate nothing but the temporary fluctuations of market prices.

Sounds like an utterly unambigous contradiction to me, I've not seen such wildly tenuous re-interpretations of texts since last time I went to mass! But better still was the following:

Quote:
"The market price expresses only the average amount of social labour necessary, under the average conditions of production, to supply the market with a certain mass of a certain article. It is calculated upon the whole lot of a commodity of a certain description."

Marx clearly here is talking about Market Prices as Natural Prices, or where price = value

I'd say that he's clearly taking about, urm, market prices? But then I'm not a priest of marxism...

I haven't contributed to this thread for a few days and won't for a few more becasue I've had 4 essays to do for college this week. However, perhaps we should note the qualifier that Marx puts on at the end of Chapter 6 where he writes

"If instead of considering only the daily fluctuations you analyze the movement of market prices for longer periods, as Mr. Tooke, for example, has done in his History of Prices, you will find that the fluctuations of market prices, their deviations from values, their ups and downs, paralyze and compensate each other; so that apart from the effect of monopolies and some other modifications I must now pass by, all descriptions of commodities are, on average, sold at their respective values or natural prices."

[my italics]

With monopoly power prices can be kept above their long run perfect competition prices in the long run, i.e. the fluctuation doesn't fluctuate back. But to keep pushing this observation, although interesting and although relevant (indeed infinitely more relevant today than was the case in the 1860s), is to willfully ignore what Marx is saying.

What is Marx saying? Redtwister has gone into this in some depth, so I won't. I would however only take issue with one point. He writes

Quote:
The value of labor power is only established after the fact, in the market, behind our backs. This is where competition and anrchy come into play.

There is a contradiction between this and this

Quote:
What is value? It is a social relation or rather a form of social relation. Marx constantly refers to the value form, money form, commodity form, etc. This means that these things are the mode of existence of something else, the way in which some essence appears to us, and as such this form is both an abstraction and real or a determinate abstraction.

Value is the relation between capital and labor. Value represents the successful compacting of a maximum amount of human labor power, measured via time, into an object which then appears not merely as a thing for our use, but as a commodity: a use-value and an exchange-value.

Now it is probably the case that redtwister is trying to say in the first quote that The value of labor power is only realised after the fact. Which could be different to value being established. Especially if you took the establishment of value to mean the process that creates value and that establishes value as a social form.

Redtwister correctly notes that value is the relation between capital and labor. And what is the relationship between capital and labour? The relationship between Capital and Labour is one of antagonism between to class it is essentailly a question of class struggle. Value is essentially a question of power.

This issue is the interesting issue in marx's theory of value.

Why is it interesting? Because it defetish-izes the commodity. It stops us treating it as a natural thing. It forces us to treat it for what it is a form of social relation.

Marx hasn't gone into any of this in the chapters we are supposed to be reading so I don't know why we are debating this issue seeing as to debate it properly we would need to turn to Capital, a book that we are not reading in this reading group.

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jef costello
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Jan 7 2006 03:13
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George is not quite correct in his assertion that use-value has nothing to do with exchange: if an article is of no use to anyone and cannot be sold, it has no exchange-value.

Just because it is of no use to anyone doesn't mean that it cannot be sold comrade, don't mess with George, he's my homie.

ps George and I are not the same person

cph_shawarma
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Jan 7 2006 11:04

Jef: No, the fact is that a commodity must have a use value (it must be of use to someone) for someone to actually be willing to buy it. Even if this use is something above the necessity line, the use can be psychological (the desire for things is a use) for instance.

But I would say, unlike redtwister, that a commodity can have an exchange value even if it does not possess a use value, however this immanent value cannot be realised if it does not possess a use value under the social conditions at hand. For instance if there are thousands of bikes produced and everyone already have bikes which they find no meaning in replacing, the bikes produced will have no use value (since no one is interested in acquiring them), but they still have their exchange value (however, unrealised and only immanent).

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georgestapleton
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Jan 7 2006 16:26
Jef Costello wrote:
Quote:
George is not quite correct in his assertion that use-value has nothing to do with exchange: if an article is of no use to anyone and cannot be sold, it has no exchange-value.

Just because it is of no use to anyone doesn't mean that it cannot be sold comrade, don't mess with George, he's my homie.

ps George and I are not the same person

Yeah, I actually think I was kind of wrong here. When I wrote:

Quote:
Use value has nothing to do with price level that is exchange, use value plays a part in consumption but not in exchange.

What I was trying to say, but failed, was that use-value is only realised in consumption and not in exchange. Where as exchange value is realised in exchange and not consumption. I think redtwister is right that only a good with a use-value will be consumed and therefore will ultimately be demanded for consumption. It is the case that goods can be bought not for their use-value but for their ability to yield a profit. For example consider the exchange between distributers and producers. Here the distributers are not demanding the good due to it's use-value but due to its exchange value i.e. its ability to be sold. So in this case just becasue a good is of no use to anyone, doesn't mean it cannot be sold. A good can be sold if someone thinks that it can be sold on at a higher price. That someone can be wrong.

cph_shawarma
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Jan 7 2006 17:01

George: In the situation you describe, the use value is another than the immediate consumption of the commodity. For the distributor the use value is the ability of the commodity to be sold, ie. it is bought in order for the distributor to pass it on, sell it. If you buy a gift, to take another example, the use value you are buying is the ability to give away the gift, not the direct consumption of the goods. The use value is thus highly subjective, you may use commodities in variant fashions, there is no objective use value.

afraser
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Jan 7 2006 23:42
gurrier wrote:
afraser wrote:
Marx says here that socially necessary labour time determines equilibrium price. He is wrong with that, it is false.

To return to this, does this imply, in your view, that Marxian value is essentially impossible to measure and if so, how is the concept more useful than, say, the concept of 'the soul'?

Value, when defined as equilibrium price (as it is in this particular work), is a measurable and useful concept. It so happens that it is not determined by socially necessary labour time - but is no less measurable and useful for that.

The later Marxian 'value' (which by some opinions makes an appearance in Marx's own Capital) is, yes, impossible to measure and no more useful that the concept of the soul (which does not mean useless: later 'value' and 'the soul' both provide great justification for right actions on the part of their believers. But they have no place in purely rational thought - and that's where the intellectual battleground is).

When it does get useless is when those two different 'values' above get confused with each other in the same argument - like getting 'the soul' mixed up with the physical act of exhalation during breathing.

gurrier
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Jan 8 2006 01:47
afraser wrote:
gurrier wrote:
afraser wrote:
Marx says here that socially necessary labour time determines equilibrium price. He is wrong with that, it is false.

To return to this, does this imply, in your view, that Marxian value is essentially impossible to measure and if so, how is the concept more useful than, say, the concept of 'the soul'?

Value, when defined as equilibrium price (as it is in this particular work), is a measurable and useful concept. It so happens that it is not determined by socially necessary labour time - but is no less measurable and useful for that.

The later Marxian 'value' (which by some opinions makes an appearance in Marx's own Capital) is, yes, impossible to measure and no more useful that the concept of the soul (which does not mean useless: later 'value' and 'the soul' both provide great justification for right actions on the part of their believers. But they have no place in purely rational thought - and that's where the intellectual battleground is).

When it does get useless is when those two different 'values' above get confused with each other in the same argument - like getting 'the soul' mixed up with the physical act of exhalation during breathing.

Okay, but since the transformation problem which you highlighted for me appears to say that there is no function that translates from one type of value (socially useful labour) to the other type of value (equilibrium price), and because it is the former type of value that forms the basis of Marx's 'humanistic' critique of capitalism, then where does that leave the critique?

gurrier
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Jan 8 2006 01:53
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apart from the effect of monopolies and some other modifications I must now pass by

But when these monopolies are standard and entrenched over decades and built into the foundations of our global order, it becomes fairly useless to depend upon theories which treat them as temporary anomalies.

gurrier
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Jan 8 2006 02:13
redtwister wrote:
If you see no contradiction between your explanation and “Marx’s LTV”, then I don't see where you are having a problem with Marx's analysis. Is it that in Value, Price and Profit he does not get to that level? Or are you disappointed that the world market and those kind of price fluctuation only show up in volume 3 of Capital, which he doesn't finish?

Simply, because marx treats hegemonic power relations (monopolies) as mere anomalies in capitalism - which serve to distort and disguise the rules of the system. In fact, these power relations seem to me to be an integral part of the system and are ever-present. Hence, while I do see an awful lot of worth in his critique, I think it would be much more useful if we were to concentrate on how to incorporate the 'distortions' of power into the model rather than seeing them as a detail that can be passed over.

redtwister wrote:
I do indeed not see your point, apparently. After all, i find it slightly confusing when you posit that it works within Marx's critique of political economy, but Marx’s analysis is insufficient to make sense of it.

When it comes to saying that something is inhuman, you are in the terrain of psychology and of human nature - I do not find Marx's perceptiveness in this area to be very profound.

Quote:
First things first, quantifiability and measurability are not the only thing in the world that make something scientific or real, nor are all real things quantifiable. Biologists and social scientists alike have tried for years to measure intelligence, IQ. Does that mean that IQ exists or that any numbers past a certain point are meaningful? Does turning making poker chips into abstract value commeasurable with the labor that produces potatoes meaningful? Can you measure a love relationship? Can you quantify it? Can you quantify why something upsets me and another thing does not? Only for capital is quantifiability a predicate of reality. You suppose, and do not want anyone to question,, what you take to be science, however your conception of science is simply no different from standard bourgeois science, IMO. This is no insult, we all labor to get away from the same problem, that the dominant ideas are the ideas of the ruling class. We all more or less fail, especially as individuals. That’s life under capital. But my comments directed at what you seem to be taking on faith, without realizing that it presents a problem. Clearly, the first problem you have with Marx is that you don’t like anything that can’t be quantified and Marx insists that the desire to quantify everything, to abstract from their qualities, is itself the very core of capital.

I don't believe this - can you point me at a quote from Marx where he equates quantifiability with capitalism.

I also don't recognise a category of 'bourgeois science'. Where exactly does this bourgeois nature manifest itself in the scientific method?

To respond to your concrete example of the difficulty in measuring intelligence - the problem is not with the desire to measure things but with the complexity of the thing to be measured and the difficulty in defining what it is. The various attempts to measure IQ would generally be seen as unscientific in that they made false assumptions and adopted invalidly simplified models on which to base these measurements. It is only because the scientific method provides us with a means for rigourously examining such things and challenging them that we now know this. On the other hand we can measure all sorts of aspects of human intelligence with a fair degree of accuracy - again due to the scientific pursuit of breaking complex systems down into sub-systems which have a tractable number of variables and are thus amenable to analysis.

There is no science nor rationality that eschews quatifiability - that is mysticism plain and simple. How on earth can you even start to attempt to extract your subjectivity from a problem if you do not attempt to come up with observations that are reproducible by others? This is impossible without some sort of quantification. Since the time of Gallileo this has been the common grounding for rational enquiry - without it we are left with an infinity of subjectivities.

lem
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Jan 8 2006 03:26
gurrier wrote:

I don't believe this - can you point me at a quote from Marx where he equates quantifiability with capitalism.

The sutuationists were quite keen on it.

Quote:
The various attempts to measure IQ would generally be seen as unscientific in that they made false assumptions and adopted invalidly simplified models on which to base these measurements. It is only because the scientific method provides us with a means for rigourously examining such things and challenging them that we now know this.

What false assumptions were these, what simplified models? The methodolgy is used in other "intelligence" theories. How do we judge the creation of IQ unscientific and not just false? And that the study of IQ is unscientific does not mean that quantiafiable things are always scientific (as was being argued against) if anything it disproves this. Tho IMHO IQ is something, whether it is what they say it is is another question.

Quote:
There is no science nor rationality that eschews quatifiability - that is mysticism plain and simple.

Of the top of my head this is not true, but I can't think of anything good. What about the DSMs, these do not quantify illness - just give categories.

afraser
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Jan 8 2006 23:04
Gurrier wrote:
Okay, but since the transformation problem which you highlighted for me appears to say that there is no function that translates from one type of value (socially useful labour) to the other type of value (equilibrium price), and because it is the former type of value that forms the basis of Marx's 'humanistic' critique of capitalism, then where does that leave the critique?

The concept of exploitation can be salvaged from the wreckage, and so can Marx’s categories of economic class. That’s all – but is enough for the socialist project (there is a class of capitalists, and they exploit the larger class of workers; with profit, interest, rent forming the exploitative surplus).

There is also an alternative version of Marx’s critique that still stands up. In that, it is accepted that equilibrium price and socially necessary labour do not correspond, but it is held that they justly ought to because of the existence of an underlying mystical ‘value’. That is a perfectly valid view (although is a matter of faith rather than of rational reasoning, and so unlikely to persuade non-believers) but it is not the view that Marx was advancing here in this work.

gurrier
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Jan 9 2006 00:04
lem wrote:
The sutuationists were quite keen on it.

Zero relevance to my question.

Quote:
What false assumptions were these

For example, the assumption that it was possible to concoct culturally neutral tests.

Quote:
what simplified models?

The model of intelligence as sub-dividable into a small number of discrete areas representible as tests on paper.

Quote:
How do we judge the creation of IQ unscientific and not just false?

If we didn't have a method for demonstrating its falseness, how could we possible know it was false. In this case, we know these things because people have rigourously demonstrated them to be so - for example, by concocting 'ghetto IQ tests' which african americans consistently score higher on than whites - thus falsifying the assumption of cultural neutrality.

Quote:
And that the study of IQ is unscientific does not mean that quantiafiable things are always scientific (as was being argued against) if anything it disproves this. Tho IMHO IQ is something, whether it is what they say it is is another question.

I don't think you're making any sense here. I am not trying to equate quantifiability with science.

Quote:
Of the top of my head this is not true, but I can't think of anything good. What about the DSMs, these do not quantify illness - just give categories.

The DSM maps symptoms to categories - the symptoms being explicitly chosen for their supposed objectivivity and measurability. The DSM is nothing other than an attempt to (badly and mistakenly imho) quantify mental illnesses in terms of observable symptoms.

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georgestapleton
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Jan 9 2006 00:25
gurrier wrote:
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apart from the effect of monopolies and some other modifications I must now pass by

But when these monopolies are standard and entrenched over decades and built into the foundations of our global order, it becomes fairly useless to depend upon theories which treat them as temporary anomalies.

Earlier I wrote:

Quote:
With monopoly power prices can be kept above their long run perfect competition prices in the long run, i.e. the fluctuation doesn't fluctuate back. But to keep pushing this observation, although interesting and although relevant (indeed infinitely more relevant today than was the case in the 1860s), is to willfully ignore what Marx is saying.

-------

gurrier wrote:
Simply, because marx treats hegemonic power relations (monopolies) as mere anomalies in capitalism - which serve to distort and disguise the rules of the system. In fact, these power relations seem to me to be an integral part of the system and are ever-present. Hence, while I do see an awful lot of worth in his critique, I think it would be much more useful if we were to concentrate on how to incorporate the 'distortions' of power into the model rather than seeing them as a detail that can be passed over.

A 'hegemonic power relation' is not the same thing as a monopoly. But that said you are right monopolies are not 'mere anomalies in capitalism'. But the absence of monopolies doesn't imply the absence capitalism. Capitalism can exist and function without monopolies. Marx does go into a lot of depth on monopoly power in Vol. 2 and Vol. 3 of Capital, but in what we are reading he is laying out an analysis of capitalism in it's purest form that is perfect competition. And Marxs theory of exploitation is one that is meaningful with and without the presence of monopolies. This is something that I think is very useful.

If we are to "concentrate on how to incorporate the 'distortions' of power into the model rather than seeing them as a detail that can be passed over." We need to understand the model first. We can't incorporate anything into a model without understanding it.

And to insist that when looking at any section of marx we need to consider what marx isn't saying in that section is to 'willfully ignore what Marx is saying.' To demand that we begin our understanding of marx's model of exploitation by changing it is to put the cart before the horse.

------

Quote:
When it comes to saying that something is inhuman, you are in the terrain of psychology and of human nature - I do not find Marx's perceptiveness in this area to be very profound.

Marx didn'ty have anything profound to say about human nature. neutral errrrrr. He might have been wrong but he definitely had profound things to say.

---------

Quote:
There is no science nor rationality that eschews quatifiability - that is mysticism plain and simple. How on earth can you even start to attempt to extract your subjectivity from a problem if you do not attempt to come up with observations that are reproducible by others? This is impossible without some sort of quantification. Since the time of Gallileo this has been the common grounding for rational enquiry - without it we are left with an infinity of subjectivities

So far you've given 3 different criterion for good thought...

1. Quantifiability

2. Falsifiability

3. 'Logic and analysis'

gurrier wrote:
Appeals to science are not appeals to authority (as long as the concept appealed to is an accurate reflection of scientific method) they are a shorthand for appeals to logic and analysis, appeals which assume that the reader understands the scientific concept, thus avoiding the need to argue it from first principles.

You need to make your mind up. What is it?

Oh and if it's falsifiability, errr, the theory of falisfiability is not falsifiable. So on it's own terms it's a bad theory.

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georgestapleton
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Jan 9 2006 00:47
cph_shawarma wrote:
George: In the situation you describe, the use value is another than the immediate consumption of the commodity. For the distributor the use value is the ability of the commodity to be sold, ie. it is bought in order for the distributor to pass it on, sell it. If you buy a gift, to take another example, the use value you are buying is the ability to give away the gift, not the direct consumption of the goods. The use value is thus highly subjective, you may use commodities in variant fashions, there is no objective use value.

Hmm, this got me thinking. And I think you are right. Immediate consumption perhaps isn't the best term to use, final concumption might be better.

Perhaps I should explain what I was thinking and what i think now in a bit more depth.

I stand by my position that use-value can only be realised in consumption. And I didn't think that use-value can only be realised in final consumption. I was al the time keeping in my mind the issue of the realisation of labour-power's use-value that is it's production of value or it's transformation into labour. Put into simpler language the capitalist consumes the workers ability to work by making them work. But here the commodity labour power is tranformed by being consumed. It ceases to be the commodity labour power but is rather tranformed into other commodities.

Because let's say consider my example but lets be a bit more specific and say the commodity is potatoes. I argued here the distributers of potatoes are not demanding potatoes due to it's use-value but due to its exchange value i.e. its ability to be sold. I was thinking that potatoes had a set use-value, and I was right in a sense. Potatoes distributers do not buy potatoes from potatoe producers (farmers) due to the useful properties of potatoes. But this can only be taken so far. In a sense, potatoe distributers aren't buying potatoes, they are buying stock. And stock does have a use-value for distributers and the use-value is as cph puts

Quote:
it is the ability of the commodity to be sold,

So in short I think I was wrong.

However under this understanding stock can only be understood as constant capital? The word constant suggests to me that this can't be right. Any ideas?

lem
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Jan 9 2006 01:14
gurrier wrote:
Quote:
And that the study of IQ is unscientific does not mean that quantiafiable things are always scientific (as was being argued against) if anything it disproves this. Tho IMHO IQ is something, whether it is what they say it is is another question.

I don't think you're making any sense here. I am not trying to equate quantifiability with science.

But recently

gurrier wrote:
There is no science nor rationality that eschews quatifiability - that is mysticism plain and simple.

Your really going to have to be a bit more explicit about what you are actually saying.

gurrier wrote:
lem wrote:
The sutuationists were quite keen on it.

Zero relevance to my question.

Sounds like wild paranoia to me. Besides it clearly has some revelvence - where does Marx refer to quantifiability - here some Marxists refer to it.

gurrier wrote:
Quote:
What false assumptions were these

For example, the assumption that it was possible to concoct culturally neutral tests.

Though this seems to have no relevence to the discussion now, I would have thought that a culturally specific concept of IQ could be salvaged

gurrier wrote:
Quote:
what simplified models?

The model of intelligence as sub-dividable into a small number of discrete areas representible as tests on paper.

So what model of intelligence to you ascribe to, just out of interest? One that isn't divisible

gurrier wrote:
Quote:
How do we judge the creation of IQ unscientific and not just false?

If we didn't have a method for demonstrating its falseness, how could we possible know it was false. In this case, we know these things because people have rigourously demonstrated them to be so - for example, by concocting 'ghetto IQ tests' which african americans consistently score higher on than whites - thus falsifying the assumption of cultural neutrality.

So IQ is unscientific becuase it is false, that makes alot of unscientific scientists out there now as we speak!

But TBH I may have lost you, you are saying that IQ was scientific, (but now we know it to be false, becasue its possible to make culturally unfair(?) tests confused ) it isn't now.

gurrier wrote:
Quote:
Of the top of my head this is not true, but I can't think of anything good. What about the DSMs, these do not quantify illness - just give categories.

The DSM maps symptoms to categories - the symptoms being explicitly chosen for their supposed objectivivity and measurability. The DSM is nothing other than an attempt to (badly and mistakenly imho) quantify mental illnesses in terms of observable symptoms.

Again you seem unable to acknowldege anything but theories in their totality. I will accept that all scientific metods have a element of quantifiability, perhaps all laws. But not all science, or all rational thought.

georgestapleton wrote:
Oh and if it's falsifiability, errr, the theory of falisfiability is not falsifiable. So on it's own terms it's a bad theory.

Though it could still be a valid critereon of science, as the falsifiability statement is not claiming to be a science. Tho falsifibaility as a necesity for rationality is false.

gurrier
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Jan 9 2006 02:31
georgestapleton wrote:
A 'hegemonic power relation' is not the same thing as a monopoly.

A monopoly is a hegemonic power relation (unless somebody has changed the meaning of the words when I wasn't looking).

georgestapleton wrote:
And Marxs theory of exploitation is one that is meaningful with and without the presence of monopolies. This is something that I think is very useful.

Me too.

georgestapleton wrote:
Marx didn'ty have anything profound to say about human nature. neutral errrrrr. He might have been wrong but he definitely had profound things to say.

The word profound in my sentence was a qualifier on the word perceptiveness. I don't think he perceived any deeper than he needed to for his theory and I don't think he looked nearly deep enough.

Quote:
So far you've given 3 different criterion for good thought...

1. Quantifiability

2. Falsifiability

3. 'Logic and analysis'

I've never even considered the existance of a category called "good thought" in my life. You appear to have missed the word 'eschews' in the text that you quoted - reconsider the meaning of the phrase with that word put back in.

Quote:
You need to make your mind up. What is it?

The meaning of my text that you quoted is the following:

The scientific method is the heavily distilled result of aeons of human logic and analysis. When we use the concepts drawn from it, we are implicitly drawing upon this vast wealth of human thought, rather than having to re-invent the wheel each time.

There is no contradiction whatsoever.

Quote:
Oh and if it's falsifiability, errr, the theory of falisfiability is not falsifiable. So on it's own terms it's a bad theory.

It's not a theory.

cph_shawarma
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Jan 9 2006 08:41

The postulate of falsifiability has been largely done away with inside the scientific community. It's Popperian bollocks, to be frank, and I would suggest a reading of Kuhn or Lakatos, if you want to know how bourgeois scientists dealt with it. The basic critique (Lakatos) is that if everything must be falsifiable, then you're not dealing with science (the study of our surroundings and ourselves) but with logic (or a religion of logic). The fact that capital (and the modern synthesis of evolutionary theory etc.) is impossible to grasp using the pure predicate logic disproves the postulate of falsifiability. The illusion that a theory must be quantifiable in order to be scientific must be one of the more ridiculous comments I've heard. In what way can a science regarding social structuring and entrapment (the critique of political economy) be quantifiable? Where are the quantities? If you think that Marx's theory is about telling us how much profit a company produces, you are way off.

Mike Harman
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Jan 9 2006 10:11
gurrier wrote:

A monopoly is a hegemonic power relation (unless somebody has changed the meaning of the words when I wasn't looking).

Gurrier, if you think monopoly is interchangeable with hegemonic power relation, do you think the monopolies (in the most broad sense- for instance a monopoly of violence) are unique to capitalism? What Marx does is explain the basis of capitalism, the things that are unique to it that mark it out as a new social system of exploitation which has developed through the class struggle. Your complaint seems to be that what is an explanation of how capitalism functions (in order to destroy it, not to astrologise it), is not an all embracing theory of power relations.