IWGVT Abstracts of Downloadable Documents

A series of abstracts of articles

Dave Kristjanson
Effective Demand and the Market Price of Production: Towards a Marxian Theory of Price Dynamics

Within a non-dualist interpretation of value and price of production there exists a tension between those who approach the determination of prices of production from a simultaneous method and those who argue for a sequentialist approach. I argue that the value category "market price of production" constitutes a further development of the value form of the commodity which bridges the gap between the static determination of prices of production and a dynamic analysis of the price adjustment pro- cess. While prices of production are the appropriate value category to theorize many important relationships, they are not appropriate to the level of abstraction at which markets are not assumed to clear and dynamic changes in prices and values are introduced. The two positions within the non-dualist interpre- tation of value are therefore not mutually exclusive; rather they represent arguments which are appropriate to different stages in the development of value and value form. The key to understanding how value can be used to theorize dynamic price adjustment processes lies in consistently inter- preting the meaning of socially necessary labour-time. Roberts argues that with the introduction of inter-industry competition in Volume III the meaning of abstract labour changes. It refers to an aliquot share of the total social labour rather than simple homogeneous labour as in the first two volumes. I argue the meaning of "socially necessary" undergoes a similar reconsid- eration with the introduction of deviations of market demand from market supply. Socially necessary labour-time must take into account the relationship of the labour expended in an industry to the total social need for the commodity as expressed by effective demand. Following a procedure Marx introduced in Chapter 10 of Volume III, I show how changes in demand affect the determination of the value of commodities. The resulting value category -- market price of production -- is fully defined under conditions of non-market clearing and thus provides the basis for a value theoretic analysis of price dynamics.

Enrique Dussel

Hegel, Schelling and surplus value: time and Capital.

Etelberto Ortiz Cruz

Equilibrium and Non-Temporal Assumptions in the New Non-Equilibrium and Temporal Approaches of Marx's Theory of Value Non-equilibrium and temporal conditions and assuptions have been recently incorporated in the conceptualization and formalization of Marx's theory of value, particularly in the treatment of the transformation from values into prices of production, by several Marxist political economists throughout the world. This is a very important advance in the history of Marxist political economy because, contrary to the traditional and orthodox approaches which conceive the motion of the economic world of capital as being based on static and equilibroum principles, it is understood as a dynamic and non-equilibrium movement, or as Marx would say, as dialectical movement. However, the state of art is far from being completed or finished. Rather it is a beginning. This can be shown by the fact that these approaches are not free of certain condictions and assumtions which belong to the static and equilibrium ones. This paper will explore precisely those equilibrium and non-temporal conditions and assuptions which are, implicit or explicit, incorporated in the dynamic and non-equilibrium approaches. The analysis will particularly focus on three interrelated aspects: (i) the philosophical conceptions of time and space; (ii) the conception of the categories of labor, value, money, price and capital; (iii) the logical and structural determinations. The essays of Freeman, McGlone and Kliman, Carchedi and Carchedi and de Hann published in the book edited by Freeman and Carchedi "Marx and Non-Equilibrium Economics" will be mainly the object of our explanatory analysis. It is not our intention to be negative, but rather to be positive and constructive. Some References: Alliez, E. (1996). Capital Times. Tales From the Conquest of Time. Aristotle (...). Metafisica Aristotle (...). Politica Capek, M. (1973). El Impacto Filosofico de la Fisica Contemporanea. Eistein, A. (1971). La Relatividad. Freeman and Carchedi (1996). Marx and Non-Equilibrium Economics. Hegel, G.W.F. (1993). Hegel's Science of Logic. Marx, K. (1970). A Contribution to the Critique of Political Economy. Marx, K. (1973). Grundrisse. Marx, K. (1974). La Miseria de la Filosofia. Marx, K. (1977). Capital, Vols. I, II, III. Meszaros, I. (1995). Beyond Capital. Miranda, Jose Porfirio (1989). Hegel tenia Razon. El Mito de la Ciencia Empirica. O'Driscoll, G. and M. Rizzo (1996). The Economics of Time and Ignorance. Mario Robles-Baez Equilibrium and Non-Temporal Assumptions in the New Non-Equilibrium and Temporal Approaches of Marx's Theory of Value Non-equilibrium and temporal conditions and assuptions have been recently incorporated in the conceptualization and formalization of Marx's theory of value, particularly in the treatment of the transformation from values into prices of production, by several Marxist political economists throughout the world. This is a very important advance in the history of Marxist political economy because, contrary to the traditional and orthodox approaches which conceive the motion of the economic world of capital as being based on static and equilibroum principles, it is understood as a dynamic and non-equilibrium movement, or as Marx would say, as dialectical movement. However, the state of art is far from being completed or finished. Rather it is a beginning. This can be shown by the fact that these approaches are not free of certain condictions and assumtions which belong to the static and equilibrium ones. This paper will explore precisely those equilibrium and non-temporal conditions and assuptions which are, implicit or explicit, incorporated in the dynamic and non-equilibrium approaches. The analysis will particularly focus on three interrelated aspects: (i) the philosophical conceptions of time and space; (ii) the conception of the categories of labor, value, money, price and capital; (iii) the logical and structural determinations. The essays of Freeman, McGlone and Kliman, Carchedi and Carchedi and de Hann published in the book edited by Freeman and Carchedi "Marx and Non-Equilibrium Economics" will be mainly the object of our explanatory analysis. It is not our intention to be negative, but rather to be positive and constructive. Some References: Alliez, E. (1996). Capital Times. Tales From the Conquest of Time. Aristotle (...). Metafisica Aristotle (...). Politica Capek, M. (1973). El Impacto Filosofico de la Fisica Contemporanea. Eistein, A. (1971). La Relatividad. Freeman and Carchedi (1996). Marx and Non-Equilibrium Economics. Hegel, G.W.F. (1993). Hegel's Science of Logic. Marx, K. (1970). A Contribution to the Critique of Political Economy. Marx, K. (1973). Grundrisse. Marx, K. (1974). La Miseria de la Filosofia. Marx, K. (1977). Capital, Vols. I, II, III. Meszaros, I. (1995). Beyond Capital. Miranda, Jose Porfirio (1989). Hegel tenia Razon. El Mito de la Ciencia Empirica. O'Driscoll, G. and M. Rizzo (1996). The Economics of Time and Ignorance. Ted McGlone Hegel's Attitude to Objectivity and the Concept of 'Marx's Marxism' in value theory debate It has been alleged that the fundamental attitude of proponents of the "temporal single-system" (TSS) interpretation of Marx's value theory is the attitude of faith. However, what has characterized our development is the process of seeking proof, through argument, for our interpretation. We began by re-examining what others took on faith --- Marx's "errors" --- and since then the TSS interpretation has been able to reproduce Marx's major conclusions in value theory, while other interpretations only produce some. Yet we have found that there is a resistance to the TSS interpretation that goes beyond rational discussion. It rejects, implicitly or explicitly, the notion that we can work out a way to compare different interpretations with Marx's texts and his body of ideas as a whole to see which is better, as an interpretation. Its root, I will argue, is a resistance to "Marx's Marxism," as a concept. I have found Hegel's discussion of the attitudes of thought to objectivity (Smaller _Logic_) to be very helpful in thinking about this problem. I will outline the three attitudes, and then discuss their implications for the current debate. The *first attitude* is that of faith that what is can be known immediately. As instances of this attitude, we observe the claim that Marx defined value in chapter 1 of _Capital_ and never developed it further. Value and price are held apart sharply; value is an abstract identity, lacking negativity. Taking Marx's "errors" as an object of faith is also an instance of this attitude. The second attitude -- empiricism and Kantian rationalism --- appears in the turn to empirical studies of vertically integrated labor coefficients to demonstrate the existence of value in the real world of experience. Yet theoretic differences concerning the categories employed in value theory cannot be avoided: is the concept of value with which they work Marx's, or another variant? The Kantian moment of the second attitude may appear in the "abstract labor" theorists, since theory here becomes a way in which we see the relation of labor and value, not the theorization of the actual relationship. Hence the objectivity of value theory goes undemonstrated. The third attitude, exemplified by Jacobi's intuitionalism, returns back to the first attitude, but now one's *personal* faith or intuition becomes the measure of truth. This attitude seems to be the most relevant to the current state of debate. Here the issues become "personalized," in the sense that each theorist has an insight s/he likes and which s/he makes into a universal for all of Marxian value theory. Method takes a back seat to the development of the individual's particular interest and criteria. The object, Marx's Marxism as a body of ideas in need of restatement, gets left out, becoming a mere indeterminate thing-in-itself, a projection screen for our own revelations. In contrast, I will argue for the importance of method, a method of working out differences in interpretation instead of jumping to conclusions, without proof, that some interpretation is a re-statement of Marx's doctrine. It is important to establish a way in which we can determine better from worse interpretations of Marx. Such a method needs to compare the interpretations against Marx's texts.

Costas Lapavitsas

The New Solution to the Transformation Problem: Some Issues Regarding the Treatment of Value

I. The treatment of value in the 'New Solution'.

On the whole value is taken to be labour embodied but there are two commodities the value of which is labour commanded: labour-power (lp) and money (m). This allows the NS to make two fundamental statements, first, the value of labour-power is the wage share in the net product, second, the value of money is the ratio of the value of the net product (fresh labour supplied) over the price of the net product. Both are determined after distribution has taken place. The value of constant capital is not important to the analysis, and potentially problematic, since the NS deals with net rather than gross product. II. Such a treatment of the value of labour-power is problematic. It partly denies the commodity nature of labour-power and relies on institutional factors to determine lp. The distributional struggle is posited as subsequent to production. Class struggle is deus ex machina. The Ricardian approach to lp is important for Marx, though properly understood. III. Such a treatment of the value of money is problematic. Since the value of money is labour commanded, the price level is indeterminate. Two paths are then open, first, to adopt an institutional/state determination, second, to adopt the Quantity Theory of Money. Neither is satisfactory, particularly since the forms of money and the significance of the form of money for the determination of its quantity, are not analysed IV. How else can it be done? The NS seeks an answer at the level of the macro-model equations, it is after an ideal type. This is not Marx's method. The type of equilibrium sought by the NS exists but it is a fleeting moment. As such, it holds just as much when lp and m are labour embodied. If lp and m are labour embodied, equilibrium equations cannot in general be written, but that is precisely the point. The labour commanded of labour power and money might diverge from the labour embodied - must diverge. We then have a process of re-establishment of equilibrium, a process of crisis. This allows us to analyse fluctuations in the reserve army of labour, and distributional struggles, without assuming their institutionally-based exogeneity. Equally, it allows us to study monetary disequilibria, price fluctuations, and money as means of hoard and payment, again without exogeneity premises.

Eduardo Maldonado-Filho

Release and tying up of Productive Capital and the "Transformation Problem."

Engelbert R Stockhammer

Different Theories of Value and Different Solutions: A Comparison of Three Solutions to the Transformation Problem The paper attempts to compare three distinct "solutions" to the problem of the relation between the value and the price (of production) spheres: the Standard Solution, the Overdeterminist Solution and the "New" Solution. The goal of this comparison is not to find the "correct" or "most Marxist" solution to the transformation problem, but to show how different conceptions of value and prices lead to different formulations of the "transformation". The essay thus presupposes an understanding of mathematics as a tool to systemize the relations between the basic concepts. But it cannot help us choose between these basic concepts. In my reading of Marx, his work contains different, often contradictory thoughts, which may be due to the mere fact that he never finished his work or could represent fundamental inconsistency in his thought. Further, Marxist and non-Marxist theories have been in a partly hostile, partly friendly, exchange for decades, thereby influencing each other. The search for a true or pure Marxist theory is therefore regarded as a counterproductive enterprise. The main feature of the SS is that it treats values as independent of prices (of production). The values of all commodities, including the value of labor power, can be calculated independently from prices. Value is therefore, quantitatively, the socially necessary abstract labor time (SNALT) embodied in the commodity. The debate around this solution turned about the question of whether Marx Equivalence Theorems (ET's: sum of values equal sum of prices, sum of surplusvalue equal profits) can be maintained. In general they cannot. However, the same equations have been interpreted very differently. Marxists, like Sweezy, Shaikh, Meek argued that despite the fact that one of the two ETs has to be violated, one can still hold on to Marx theory of exploitation. Whereas Neoricardians, like Steedman, have attacked Marxian value theory as being altogether inconsistent and superfluous. In the overdeterminist approach toward value theory value and prices are conceived as overdetermining each other. While value is only created in production, it can be redistributed in circulation. Hence, prices of production, analyzed as a form of value, enter the formation of value. In particular constant capital enters the value equation in prices of production. Similarly, the value of labor power, is defined by the price of the consumption bundle rather than by its embodied labor. This solution has the unique feature that it allows most of Marx claims, e.g. the ET's, hold, but it makes values depend of distribution, which is inconsistent with Marx' critique of the "trinity formula". For the NS (Dumenil, Foley, Lipietz) the key idea of the labor theory of value is that the value of society's net output --which is what gets distributed -- is created by labor. Further an independent role is attributed to money. It represents a claim on part of the output. Marx statement of the value of labor power as given by the SNALT embodied in the commodity bundle, is understood as an equation that holds under the assumptions of Volume I, but not as an definition. Hence VLP is redefined as the moneywage times the value of money. Dead and living labor are consciously treated differently in the transformation. As a result, the two ET's hold, but the rate of profit in the value sphere will differ from the rate of profit in the price sphere, thus Marx' interpretation of the prices of production as a "selfreferential" system which has its profit rate given by the ratio of surplus value over the capital advanced, cannot be sustained. The article concludes that the key difference between these three approaches can be identified in how strictly they separate the value from the price sphere and whether living and dead labor are treated differently in the transformation. Each of them has its own advantages and caveats, but none of them can be accused of either having read to little Marx, nor of having an inconsistent argument. Marxists should accept this inhomogeneity as a strength and redirect the focus of the debate away from the question of internal consistency, which has dominated the debate for almost a century now, to more applied fields, like empirical studies on value theory or incorporating important issues as un/productive labor, rent, and so on, in the transformation from values to prices. Especially the area of empirical research could be a field where the different Marxian value theories could show their strengths and distinctiveness. References Lipietz, 1982: The So-Called Transformation Probblem Revisited, in J of Ec Theory, vol 26: p. 59-88 for the math of the new solution: Foley, 1982: The Value of money RRPE 14:2 NS in words helpful also: Foley: Understanding Capital for the overdeterminist solution: Lipietz: The Enchanted World (esp. the first 3 or 4 chap.s) (OS). Wolff, Callari & Roberts, 1982: Marx's not Ricardo's transformation problem: A Radical Reconceptualization. History of Political Economy 14 (4): 564-582 Wolff, Callari & Roberts, 1984: A Marxian Alternative to the Traditional Transformation Problem. RRPE 16 (2/3): 115-35 (both articles are rather similar) in book length: Roberts, Bruce, 1981. Value Categories and Marxian Method: A Different View of the Value Price Transformation. Unpublished Diss. Univ. of Mass at Amherst for the Standard Solution I just refer to the extended bibliography and the excellent rieview of the (standard) debate in Howard&King: A History of Marxian Economics, vol 2, part 4

Jean-Guy Loranger

The Wage Rate and the Profit Rate in the Price of Production Equation: a New Solution to an Old Problem

Le but de cet article est de démontrer que, même si la solution de Marx au problème de la transformation peut être modifiée, ses conclusions restent valables. La nouvelle solution qui est proposée est fondée sur la contrainte d'un taux de profit moyen commun aux des espace de valeur et un taux de salaire nominal qui est déterminée simultanément avec les prix. Notre solution diverge de celle de Duménil-Foley-Lipietz quant á l'hypothèse d'un taux de salaire nominal supposé ici endogène et déterminée par la concurrence sur le marché du travail. On ne suppose plus que le salaire est fixé par la valeur d'un panier de subsistence. Common on peut le constater, cette solution diffère auusi nettement de celle de Morishima et des néo-Ricardiens. Notre solution est une alternative a celle de Marx, car elle transforme tous les coûts et maintient les deux contraintes macro et un taux général de profit commun aux deux espaces de valeur. Mot cités: transformation, valeur, prix, plus value, profit, salaire, capital, travail Classification JEL: B-14, B-24, D-33, D-46, D-57, E-11, P-16 The aim of this paoer is to demonstrate that, even if Marx's solution to the transformation problem can be modified, his basic conclusions remain valid. The proposed alternative solution which is presented here is based on the constraint of a common general profit rate in both spaces and a money wage level which will be determined simultaneously with prices. Our solution diverges from the Dumenil-Foley-Lipietz solution on the assumption of the money wage rate which is assumed here as anendogenous variable. The money wage level is determined by competition on the labour market. It is no more assumed to be fixed by the value of a subsistence basket. This is also quite different from the Moishima or the neo-ricardian solution. Our solution is an alternative to the Marx solution because it fully transforms the cost off production and maintains the two macro constraints and a general profit rate between the monetary and the social spaces. Key words: Transformation, value, price, surpllus value, profit, wage, capital, labour JEL classification: B-14, B-24, D-33, D-46, D-57, E-11, P-16

Stavros Mavroudeas

The New Solution to the Transformation Problem: Some Issues Regarding the Treatment of Value

I. The treatment of value in the 'New Solution'. On the whole value is taken to be labour embodied but there are two commodities the value of which is labour commanded: labour-power (lp) and money (m). This allows the NS to make two fundamental statements, first, the value of labour-power is the wage share in the net product, second, the value of money is the ratio of the value of the net product (fresh labour supplied) over the price of the net product. Both are determined after distribution has taken place. The value of constant capital is not important to the analysis, and potentially problematic, since the NS deals with net rather than gross product. II. Such a treatment of the value of labour-power is problematic. It partly denies the commodity nature of labour-power and relies on institutional factors to determine lp. The distributional struggle is posited as subsequent to production. Class struggle is deus ex machina. The Ricardian approach to lp is important for Marx, though properly understood. III. Such a treatment of the value of money is problematic. Since the value of money is labour commanded, the price level is indeterminate. Two paths are then open, first, to adopt an institutional/state determination, second, to adopt the Quantity Theory of Money. Neither is satisfactory, particularly since the forms of money and the significance of the form of money for the determination of its quantity, are not analysed IV. How else can it be done? The NS seeks an answer at the level of the macro-model equations, it is after an ideal type. This is not Marx's method. The type of equilibrium sought by the NS exists but it is a fleeting moment. As such, it holds just as much when lp and m are labour embodied. If lp and m are labour embodied, equilibrium equations cannot in general be written, but that is precisely the point. The labour commanded of labour power and money might diverge from the labour embodied - must diverge. We then have a process of re-establishment of equilibrium, a process of crisis. This allows us to analyse fluctuations in the reserve army of labour, and distributional struggles, without assuming their institutionally-based exogeneity. Equally, it allows us to study monetary disequilibria, price fluctuations, and money as means of hoard and payment, again without exogeneity premises.

Claus Magno Germer

How capital rules money - Marx's theory of money in capitalism

The studies focusing on Marx's views about money in capitalism are frequently based on an incomplete reading of that author's theory. As a consequence, they usually reveal two weaknesses: first, the part of Marx's theory dealing with money is taken account of in a rather partial way; secondly, they are unable to analyse capitalist monetary phenomena in accordance with Marx's theoretical system. The incomplete reading becomes evident in the fact that it covers mainly, or exclusively, the three openning chapters of Book I of Capital, supplemented by the Contribution published in 1858. The Grundrisse, where the basic theoretical foundations for the concepts of value and money are developed, and the indispensable chapters of Capital III which deal with money under capitalism, are not sufficiently explored. Incomplete readings such as those mentioned above have lead to misinterpretations of Marx's theory of money in two crucial points: the first refers to the question of the commodity form of money, demonstrated in Grundrisse; the second is the characterization of money and its functions in capitalism, made in Book III of Capital. The precise understanding of Marx's theory of money in capitalism cannot be obtained if based only on Book I of Capital, where money is analysed as a phenomenon related to the sphere of circulation, abstracting capital, because money is not a category specific to capitalism. It is also necessary to previously determine the precise nature of the crucial difference between money and capital, a subject extensively discussed by Marx in Grundrisse but only very shortly mentioned in Book I of Capital. The purpose of this paper is to provide support to the proposition that Marx's theory of money in capitalism be understood as a system consisting of three fundamental parts: the first is the theory of money as a category belonging to the market economy in general, not specifically to capitalism; second, the characteristics which theoretically distinguish capital, as a category belonging specifically to the capitalist economy, from money; third, the functions performed by money in capitalism, and the particular forms and laws under which it does so.

Guglielmo Forges Davanzati

Wages, labour productivity and unemployment in a marxian model of the monetary circuit

The aim of the paper is to integrate into a marxian model of the monetary circuit an unemployment-labour productivity direct relationship. In line with the tradition of the heterodox approach to monetary cycle (from Marx to Keynes' Treatise on Money), it is assumed that firms have exclusive access to bank credit. Monetary wages are payed in advance while - in opposition to the wage fund doctrine - real wages are settled only after production process being finished. Since firms take decisions of production, they decide the quantity and quality of production and its distribution. The effect of unemployment on worker's effort (and, consequently, on his/her productivity) is explained by a "discipline" mechanism: the higher the capital/labour ratio, the higher the rate of unemployment, the more credible the threat of dismissal by the firm, the more costly for worker to shirk. This effect provides an explanation on involuntary unemployment, which derives from firms' autonomous decisions over production. Therefore, firms will find a high unemployment rate convenient, since it allows them to cut real wages and, at the same time, to induce workers to offer a high level of effort. The paper finally explore some questions: which wage-employment strategy firms will choose? what is the effect of this strategy on the quality of the workforce in the long run? how workers can oppose firms' decision? what the effects on profits and accumulations of workers' resistence?

Martha Campbell

Marx on the Credit System

Abstracting from the credit system in Volume II of Capital, Marx demonstrates that money hoards must exist alongside the productive and commodity forms of capital for the circulation of capital to be continuous. He regards such hoards as the origin of the credit system, maintaining that they are pooled by the institutions that make up the credit system (banks and the stock and bond markets) and shared by the capitalist class. Because Marx adheres to the assumption (required for this explanation of the credit system) that money takes the form of commodity money, his account is (at least superficially) at odds with the central role accorded the credit system by contemporary heterodox monetary theory and with the latter's claim that money is (in its essence) created by loans. The paper argues that criticisms of Marx's theory on these counts overlook the gains in explanatory scope that follow from his account of the credit system. In particular, the effects of the credit system can be distinguished theoretically from disruptions inherent in the reproduction of capital. Marx's case that hoards are required for the circulation of capital provides an alternative to the Keynesian claim that 'liquidity preference' arises from 'uncertainty.' In addition, it explains the disruptive effects of monetarist monetary policy: targetting monetary aggregates cuts off access to the hoard centrallized in the credit system, engendering attempts by non-financial capitalists to establish individual hoards.

Michael Williams

Did Marx Need a Commodity Theory of Money?

There is no doubt that for Marx, in common with the Classical Economists, money was a commodity, that emerged historically and logically from amongst other commodities to play the role of means of payment, means of circulation and store of value. It is almost as uncontroversial to argue that sophisticated monetary instruments in advanced capitalist societies seem to have all but sloughed off any connection with anything that could reasonably be grasped as a commodity. The attenuation of the link with bullion is a matter of historical record, and we may be moving into an era in which any necessary connection with state-backed notes and coins becomes decreasingly relevant. Money, it would appear, is becoming essentially electronic money. It is clear how this can act as an efficient means of circulation. It is less clear exactly how it can sustain confidence in itself as a means of final payment, especially internationally. And electronically stored information may seem to be a particularly insubstantial mode of storing value. Not only does it not enjoy the intrinsic value of bullion, but it seems decreasingly susceptible to state regulation. Contemporary Marxist Economics, for the most part, cleaves to a commodity theory of money for fin de millenium capitalism. This is well-grounded in Capital, volume 1, and has the advantage of maintaining a complete embodied abstract labour value economy 'underlying' the visible surface of capitalist economic relations. However, this orthodox Marxist approach has problems with the post-Sraffa critique of embodied labour values, and seems incompatible with the reality of modern monetary systems. Whilst bullion in the vaults of central bankers still plays some kind of stabilising and confidence-sustaining role in international payments, the monetary objects of the generality of advanced capitalist economic relations seem most un-commodity-like. They are not produced, qua money, by the expenditure of labour under capitalist relations of production with a view to them entering exchange. They have a social usefulness which is related neither to the labour embodied in them, nor to any wider costs of production. And their private usefulness is not to be consumed outside the sphere of circulation. Rather money can only continue to function as such by being condemned to circulate perpetually. Thus, we may say, money has neither a value nor a use-value, and so is not a commodity - the contradictory unity of value and use-value. The price of money is not related to some underlying value substructure, but is rather the reflex of the price of all commodities. Its determination is a complex function of the success of the economies to which it is linked, the role of speculation, and changing state policies. This alternative - non commodity - view is typically associated with the Marxist critique of economics, and so of the capitalist economy of which it is an expression, rather than with Marxist Economics per se. But it is also associated with some eminent Marxist Economists, concerned to seek empirical tests of their theories in the observable monetary categories of contemporary capitalist economies - for example, Duncan Foley. Working in the Marxist tradition does not entail seeking grounding for arguments only in Marx's own economic writings. Nevertheless, working in this tradition is usually motivated by an admiration for the insights of Marx's categorical system. Reconstructions and refinement of this, in the light of the history of Capitalism over the last 150 years, will be interested to examine the implications for the overall coherence of the Marxist system. The argument of this paper is, first, that we can reconstruct the relevant parts of Marx's economic arguments in terms of a non commodity theory of money, without losing any of its validity, and indeed thereby making it more applicable to late 20th Century capitalism. Second, that there is textual support for a non commodity, 'value-form' account of money in Marx's work. Third, that Marx's adherence to a commodity theory of money was an, albeit historically understandable, mistake; that mid-19th century capitalist money still had a strong link to bullion, but that commodity money can be shown nevertheless to be contingent with respect to the reproduction of advanced capitalist economies. In sum, commodity money is necessary neither to the logic of Marx's system, nor to the logic of advanced capitalism. These conclusions will be supported by the analysis of key exemplary passages from Capital.

Riccardo Realfonzo

Wages, labour productivity and unemployment in a marxian model of the monetary circuit

The aim of the paper is to integrate into a marxian model of the monetary circuit an unemployment-labour productivity direct relationship. In line with the tradition of the heterodox approach to monetary cycle (from Marx to Keynes' Treatise on Money), it is assumed that firms have exclusive access to bank credit. Monetary wages are payed in advance while - in opposition to the wage fund doctrine - real wages are settled only after production process being finished. Since firms take decisions of production, they decide the quantity and quality of production and its distribution. The effect of unemployment on worker's effort (and, consequently, on his/her productivity) is explained by a "discipline" mechanism: the higher the capital/labour ratio, the higher the rate of unemployment, the more credible the threat of dismissal by the firm, the more costly for worker to shirk. This effect provides an explanation on involuntary unemployment, which derives from firms' autonomous decisions over production. Therefore, firms will find a high unemployment rate convenient, since it allows them to cut real wages and, at the same time, to induce workers to offer a high level of effort. The paper finally explore some questions: which wage-employment strategy firms will choose? what is the effect of this strategy on the quality of the workforce in the long run? how workers can oppose firms' decision? what the effects on profits and accumulations of workers' resistence?

Suzanne de Brunhoff

Marx on Money: Current Topics

Since the first publication of Marx on Money (1967, French original edition; 1976, English translation) I have read new several approaches to the theory of money and credit in Marxist theories. In most cases, the relation between the labour theory of value and the value of money is interpreted differently from my treatment of those questions in 1967. But instead of coming back directly to inside discussions between Marxists, I would rather prefer making a detour. I believe two topics are especially relevant nowadays: (i) the meaning of the current quantity theory of money, or neoclassical monetarism; (ii) discussions about international monetary relations. Both questions involve a well-known problem: in contemporary monetary systems, where there is only fiat money, how is it possible to make use of Marx's theory of money (Foley, 1986)? I Marxist theory of money and monetarism - Marx's criticism of the quantity theory of money: why? how? - Why and how is the quantity theory of money still prevailing today? How is monetarism connected with a theory of value? - Which criticism of monetarism do we find? The one made by "old Keynesians" (Tobin, 1992). Notions of credit money ad of money supply "endogeneity". - The inverted pyramid of the financial system within a country. Monetary policies. II International monetary relations Here is a peculiar weak side of marxist theories in the past (Marx, Hilferding, Luxemburg) and at present. - The "general equivalent", currencies, "world money", in Marx's Capital. Marx and the Bankng School. - The "current international fiat standard" (M. Friedman) in contemporary systems. The Purchasing Power Parity (PPP) theory. Exchange markets and national monetary standards. - The Bancor Plan of Keynes and the notion of a supranational form of credit money. - The Multicurrency Standard, Key currencies and "hegemonic compromise". International financial markets without an international money. Which "law of value" can be set forth? Through a treatment of these topics we could try to clarify Marx's theory of money in relation to the labour theory of value. And to see how to use it as a tool for the analysis of current problems. References Brunhoff (de) S. (1976) Marx one Money, New York, Urizen Books Brunhoff (de) S. (1994) Money, Interest and Finance in Marx's Capital, in Marxian Economics: A Centenary Appraisal, R. Bellofiore ed., Macmillan (forthcoming) Foley, D. (1986) Understanding Capital, Cambridge, Harvard University Press Tobin, J. (1992), Money, in The New Palgrave Dictionary of Money and Fiance, J. Eatwell, M. Milgate, P. Newman eds., Macmillan Francisco Paolo Cipolla Product Innovation within the Marxian theory of value and capital This paper is an attempt at integrating use value innovation to the process of rising real income brought about by increases in the productivity of labor. The crucial link for achieving this integration is Marx's notion of social need as a theory of demand. It is argued that the development of the productivity of labor frees both capital and labor from the old division of labor because demand is limited by social need. The superfluous capital can only be employed in the production of new commodities, whether they represent entirely new branches of production or just new product development within already established ones. In contrast to Schumpeter's theory, product innovation is derived entirely from within the "circular flow" and product life cycles depend on the relative changes of productivity (market values) and demand growth (social need). This paper utilizes the notions of market values and market prices proposed by Giussani (1996). Through these concepts it tries to derive product innovation from within the labor theory of value. To this extent this paper constitutes part of these developing new approaches to marxian research. References Giussani(1996) 'Demand, Supply and Market Prices' in Freeman, A. And Carched, G (eds) Marx and Non-Equilibrium Economics, London and Vermont: Edward Elgar Francisco Paulo Cipolla Paresh Chattopadhyay On the Question of Labour-Values in Communist Society "Labor Value" refers to the *value form* that the products of human labor take in the exchange process where exchange is regulated by the relative quantities of socially necessary labor time contained in the products. "Communist society" refers to the post capitalist society as the emancipatory alternative to capitalism. The mode of production and the corresponding relations of production of the communist society are the exact opposite of those of the capitalist society. As opposed to capitalism's separation-alienation of the immediate producers with respect to their own kind --- as human beings --- as well as with respect to the material conditions of production, communist society is a free union with respect to both. It is a society of free and associated producers based on unmediated communal collective appropriation -- as opposed to capitalism's private appropriation --- of the conditions of production. Would (could) labor values continue to exist in communist society? Now, a communist society, like any other society, would have to solve the problem of regulating production by society's available labor time through the latter's proportional distribution among different productive spheres corresponding to society's different needs. There is, however, no unique, transhistorical method to solve this central problem that would be valid for all social formations. Each social formation would have its own specific method for solving this problem. Proportional distribution of labor time --- thereby regulating production --- through the *exchange* of products of labor taking *value form* naturally corresponds to a social formation where products are the outcome of private --- that is non directly social --- labors executed independently of one another. What characterizes labor, posited in exchange value, is that the social relation of persons is inverted into the social relation of things. In a communist society, based on collective (communal) appropriation of the conditions of production, individual labor is, by definition, directly social from the start. Here the social character of production is posited right at the beginning of the production process. There is no occasion --- no need --- here for the products of individual labors to go through exchange in order to be what they really are, that is, social. Thus labor values (commodity production) cease to exist in communism. Let us, for argument's sake, imagine the unimaginable. Let us make the "heroic" assumption that the communist society finds it convenient to (re)introduce labor values as the mode of distribution of social labor. [This would, of course, logically imply the evaporation of the collective (communal) appropriation of the conditions of production and its replacement by the reciprocally isolated execution of private labors. But *passons*.] What would be the consequence? We note first that positing labor values would necessarily entail the existence of money inasmuch as money is the necessary product of the double contradiction inherent in a commodity --- namely, the contradiction between use value and exchange value as well as the contradiction that the private labor of the individual has to appear as social labor. In the first form of commodity circuit --- selling for buying --- where commodity is both the starting point and the terminus of the process ending in the consumption of use value, money is merely the fugitive mediation facilitating exchange. Exchange value --- money --- is realized only in its disappearance. Money remains only as long as it is outside of exchange, that is, in a negative determination in relation to circulation. However, money exists really only in relation to circulation. In order not to negate itself as exchange value --- as in hoarding --- money must return to the circulation, but not as simple measure of value or medium of exchange. Its existence as means of circulation and its change into commodity must be a change of form in order for it to appear as adequate exchange value and, at the same time, as increased exchange value. This increased exchange value is necessarily associated with the second form of commodity circuit --- buying in order to sell --- whose aim is exchange value, not use value. Whereas in the first form of commodity circuit the two extremes are qualitatively different, in the second form they are qualitatively identical --- as money. But the assumption of their quantitative equality would make no sense. With exchange value as aim, the second extreme has to be a greater quantity than the first, which would immediately imply that money has become money in process, value in process, that is, capital (its antediluvian forms --- usury and merchant capital --- being excluded). Now, for the communist economy to be a viable economy reproducing itself at an enlarged scale based on *labor values* (commodities) --- by assumption --- it is only the second circuit --- creating additional values --- that is relevant, which would necessarily signify labor power itself taking *value form*, in other words, capitalist production.

Paul Cooney

Multinationals and NAFTA vs Labor and the Environment

In the current period dominated by neoliberal thinking, there is a strong need for alternative theoretical and empirical analysis. At the start of the 1980s, the world saw the advent of Thatcherism and Reaganism in two of the most advanced economies in the world and by the end of the 80s, neoliberal or neo-laissez-faire policies were being promoted and institutionalized across the globe, predominantly through the IMF's "visible fist". For much of Latin America, the late 1980s brought changing legal structures regarding foreign investment and trade, reducing or eliminating domestic ownership requirements and in general accommodating the interests of multinational corporations, even where it was clearly not in the interests of the populations of those countries. The process of integration between the US and Mexican economies has been ongoing for some time. Consider the initial maquiladora program which began in 1965, or the increased ties during the 1980s, such as the bilateral trade treaty in 1985. This was greatly strengthened with the pro-U.S. approaches of both the de la Madrid and Salinas de Gortari administrations. Although NAFTA is in many ways a mere formalization of this process, there are some significant changes that come with the signing of NAFTA, particularly, in the area of investment. In fact, fifty percent or more of the actual NAFTA document deals with investment, not trade, hence, the importance of NAFTA for multinational corporations, especially those based in the U.S. In this paper, I will examine the workings and operations of multinationals that have benefited from the increasingly capital-friendly environment in the years leading up to NAFTA and since NAFTA has been in effect. Where data and information is available, the impact on the profitability and growth of specific multinationals will be analyzed. Secondly, the impact on wages, employment and working conditions in the US and Mexico will be studied. Lastly, the impact on the environment, especially in northern Mexico, will be assessed. Given the difficulty in assessing the full impact of NAFTA and neoliberal policies, this paper will be concentrating on the maquiladoras operating in the border region during recent years.

Alejandro Ramos-Martinez

Labour, Money, Labour-Saving Innovation and the Falling Rate of Profit

This article presents a procedure for calculating the rate of profit assuming one-time labor-saving innovation and a constant real wage. The debate on the effect of technical change on the profit rate is centered on the so-called Okishio Theorem. According to this proposition, labor-saving innovation raises the profit rate, a result that contradicts the law of the tendential fall in the rate of profit (LTFRP), proposed by Marx. It is argued that the Okishio Theorem is an erroneous formalization of Marx's LTFRP because it reduces capitalist wealth to its material aspect, neglecting the dynamic of value. The Okishian rate of profit is interpreted as a static, nominal rate measured in symbol-money, which differs from the dynamic, real rate of profit measured in labor-time. The relation between the two rates is given by the change in the monetary expression of labor (MEL), the quantitative relation between the two poles of value, its substance (labor-time) and its form (money). The calculation of both the nominal and real rates of profit is illustrated by analyzing the consequences of a one-time labor-saving innovation in a two-department economy without fixed capital assuming prices = values. The resulting rise in the productivity of labor raises the nominal rate of profit, but also the MEL. Since the latter effect counteracts the former, it is clear that the labor-saving innovation provokes a reduction in the labor-time rate of profit. However, the falling real rate of profit appears externally only through monetary relations. To show this, a monetary system similar to that presented by Marx in Capital I is considered: Two types of money are rigorously distinguished: symbol-money and reserve-money, serving as store of value. As labor-saving innovation raises the MEL, symbol-money represents less labor-time, an endogenous inflationary effect that eventually provokes its devaluation against reserve-money. The falling real rate of profit is expressed in the resulting crisis of the monetary system. In this simple framework, the rise in the rate of exploitation and the inclusion of a non-depreciating fixed capital are also considered as factors which respectively counteract and enhance the falling rate of profit.

Andrew Kliman

The Okishio Theorem: An Obituary

The Okishio theorem is generally acknowledged to have demonstrated that technical changes introduced by profit-maximizing firms cannot, by themselves, lower the equilibrium rate of profit, and thus to have demonstrated the falsity of Marx's law of the tendency of the rate of profit to fall. This paper, however, will argue that (a) the "theorem" has not been proven; (b) it has, rather, been shown to be false, under the TSS (temporal single-system) interpretation of Marx's value theory; and (c) unlike other critiques of the Theorem, which come to variant conclusions by altering one or more of its premises, those flowing from the TSS interpretation are genuine *refutations* of the Okishio theorem, negating the "theorem's" conclusions without altering its premises. With respect to (a), I will note that the theorem's results *will* be replicated if a one-time-only technical change is adopted, as adjustment to a stationary price vector (in which input prices equal output prices) occurs if profitability is uniform. However, I will show that Marx's law refers to the effects of continual technical change, so that, considered as an exercise which studies a episodic "perturbation" of a stationary state, the theorem fails to refute Marx's law. Moreover, I will note that the conclusions of the theorem rest crucially on a comparison of pre- and post-mechanization uniform profit rates *at stationary prices*. Hence, I will argue, the theorem is valid if and only if post-mechanization dynamic adjustment can be shown, under the conditions of the problem, to *result* in stationary prices. Stationary prices cannot validly be *postulated*. I will show that Roemer recognized the need for this demonstration, but that it is lacking in all existing "proofs" of the theorem. In particular, I will note that the establishment of a post-mechanization uniform profit rate (one of the theorem's premises) is no guarantee of stationary prices. Hence, the theorem remains unproved. With respect to (b), I will explain that unless input and output prices are *postulated* to be equal, the level of a uniform profit rate cannot be deduced from technical and real wage coefficients. Some *value theory* is needed to determine the size of the markup over costs and, thus, the magnitudes of output prices. Hence, some value theory is needed to determine whether in fact adjustment to a post-mechanization stationary price scenario will result. The Okishio theorem, I will note, does not preclude the employment of Marx's value theory for this purpose (and cannot do so, if it is to be an internal critique of his law of the falling rate of profit instead of a conclusion premised on an alien value theory). And when Marx's value theory as understood by the TSS interpretation is employed, I will explain, continual labor-saving technical change will continually lower unit values of commodities (and money prices, given a constant monetary expression of value), so that adjustment to a stationary price vector will not occur. On "average," output prices will be lower than input prices and the prices at which fixed capital has been acquired will be even lower. This gap lowers the rate of return on capital advanced, which can thus easily fall under conditions in which the Okishian profit rate, computed on the basis of stationary prices, must rise. For instance, if "viable" technical changes are continually adopted and the real wage rate remains constant, the two rates may under plausible assumptions *diverge* over time, the former falling while the latter rises. This conclusion holds when the profit rate is measured as profit relative to historical costs as well as when it is measured as the present-discounted-value-determined rate of return on investment (Roemer, 1981). The Okishio theorem is thus refuted. Q.E.D., R.I.P. I will also note that the divergence of the two "equilibrium" (equalized) profit rates, and the concomitant failure of prices to converge to a stationary state, shows the falsity of a widely held belief among simultaneist theorists. They have contended incorrectly that the value, price, and profit magnitudes resulting from the temporalist interpretation of Marx's value theory *converge* on those of the simultaneous equation models, and that the conclusions of the TSS interpretation hold true (at most) only during a "disequilibrium" dynamic adjustment process. The results of TSS research in fact imply that unless continual technical change is disallowed (along with wage rate changes, variations in the rate of exploitation in the production process, trading at non-equilibrium prices, unbalanced growth, etc.), the simultaneist prices and profit rate do not act as "centers of gravity." With respect to (c), I will briefly survey non-TSS critiques of the Okishio theorem, noting that they are able to model a fall in the profit rate only by altering one of the theorem's premises (constant real wage, adoption of "viable" technical changes, and the absence of joint products, of premature scrapping of fixed capital, and of non-produced means of production). In contrast, I will show, the temporalist critiques conform to all the premises of the theorem but come to opposite conclusions, and thus genuinely *refute* the theorem. The key to their success, I will suggest, is that they model the profit rate as determined by labor-time, in accordance with Marx's theory, and not as determined by physical relations between material outlays and outputs, as any simultaneist conception necessarily does. Moreover, I will note, whereas simultaneist critiques fail to vindicate the logical coherence of *Marx's* law of the falling rate of profit, because they fail to show that mechanization *itself* can lead to a fall (except perhaps under highly restrictive conditions), the temporalist refutations of the Okishio theorem do indeed vindicate it. Finally, I will point out that no amount of empirical work, showing (perhaps) that the profit rate does fall, could vindicate the coherence of Marx's law independently of interpretation, because if the Okishio theorem were true, then any observed fall in the profit rate simply could not be due to mechanization *itself*. I will show on the basis of Marx's texts, furthermore, that his law of the falling rate of profit contends that mechanization itself, and not competition, leads to the fall. Hence, the present debate permits no escape from interpretation via external evidence. Interpretation alone can vindicate the logical coherence of Marx's law, without which it cannot possibly be true. And only the temporalist interpretation of Marx's value theory can vindicate, and has vindicated, its logical coherence. This and a host of similar vindications imply that the TSS interpretation is markedly superior, as interpretation, to simultaneist ones. Since coherent sense *can* be made out Marx's value theory, it is no longer tenable (if it ever was) to portray theoretical disagreements with him as correction of his errors or completion of his unfinished work. This practice wrongly casts suspicion on the intellectual credibility of those who seek to return to, re-concretize, and develop the Marxism of Marx. Intellectual honesty demands that this practice cease, and that theoretical differences instead be presented as such.

David Laibman

Okishio and his critics: historical cost vs replacement cost

The recent temporal single system (TSS) lit- erature sees value in non-equilibrium terms, and prices as inherently non-stationary. Technical change involv- ing rising degrees of mechanization, it is argued, low- ers the rate of profit without rising real wages con- trary to the Okishio Theorem because the capital stock impacts the profit rate at its historical (time-specif- ic) cost rather than at its replacement cost (which in- corporates productivity improvements). This argument fails to grasp the position of the dominant capitals, for which successful accumulation depends above all on access to state-of-the-art levels of productivity. The TSS position in fact charts the falling profit rate of the marginal firm tending toward bankruptcy, and there- fore cannot ground a general theory of the tendential fall in the rate of profit.

Alan Freeman

Time, the Value of Money and the Quantification of Value

This paper will assess and attempt to distinguish between a variety of approaches to value which have emerged over the last fifteen years by discussing how, within each of these frameworks, Marx's value categories may be given empirical content. Our starting point is the idea that National Accounts data, using the techniques adopted by Shaikh and Tonak(1990), Moseley(1982) and Freeman (1991), can and should be transformed to yield quantitative measures of variable capital, constant capital, surplus value, gross output and hence the rate of exploitation both in money terms and in terms of socially-necessary abstract labour time. We will review the principal steps of this transformation that have emerged in recent years as common ground between a wide variety of authors. The distinction made by all these authors between productive and unproductive labour, and the consequent distinctions between produced and derived incomes, will be reviewed and its centrality as the foundation of a critique of neoclassical national income accounting will be restated. We will make a critical assessment of the use made of Input-Output matrices by Shaikh, Ochoa, Petrovic and Cockshott-Cottrell, of their empirical finding that aggregate price magnitudes correlate closely with vertically-integrated labour coefficients, and of their interpretations of this finding. We will proceed to assess the differences in procedures for estimating constant and variable capital that are implied by the procedures of these authors and will contrast their theoretical presuppositions with various new interpretations of Marx's value theory that have emerged in recent years. Our focus will be on differences in the interpretation and hence estimation of constant and variable capital, which we will develop in the light of the different content given to the concept of the 'value of money' by the 'New Solution' or 'New Approach' authors, by nondualist writers such as that of Moseley and Wolff-Callari-Roberts, and within the sequential-nondualist (TSS) paradigm. The implications of the distinction between simultaneous and sequential calculation will be assessed by an examination of the distinction between historic-cost and current-cost accounting. We will discuss in this light the measurement of the stock of capital, of depreciation and of the rate of profit.

Allin Cottrell

The scientific status of the Labour Theory of Value, in the light of empirical evidence

Edward Chilcote

Classical Theories of Reproduction and National Accounting

Julian Wells Measuring value categories using company accounts data Farjoun and Machover (1983) have proposed a probabilistic dissolution of the Marxist transformation problem, to be achieved by re-conceptualising the rate of profit and other categories as distributions of random variables. Their system involves quantitatively precise predictions about the parameters of these distributions. Moreover these are, in principle, empirically testable using readily-available company account data. Notwithstanding this, their work has received little attention in Marxist, or other, circles. This is the result of a commitment to a type of determinism that was not licensed by Marx himself; furthermore, his remarks on how such things as prices of production and the rate of profit come to be formed, and what sense they exist, are clearly paralleled by the relations of measures of central tendency and of dispersion to probability density functions of populations. As a contribution to the driving out of vulgar determinism, this paper will (a) discuss some methodological issues involved in testing Farjoun and Machover's theses (b) present early results from a continuing project to establish the validity of the probabilistic approach (c) discuss some of the implications that would appear to follow from any confirmation of Farjoun and Machover's results. References Emmanuel Farjoun and Moshe Machover (1983): Laws of Chaos, Verso, London. Paul Cockshott The scientific status of the Labour Theory of Value, in the light of empirical evidence

Alan Freeman

The Value of Money, Abstract Labour and the foundations of a dynamical political economy

Duncan Foley

Recent developments in value theory

Fred Moseley

The New Solution to the transformation problem: a sympathetic critique This paper will critically review the "new solution" to the transformation problem from the perspective of the "macro-monetary" interpretation of Marx's theory that I have presented in recent papers. I will examine presentations of the "new solution" presented by Foley, Dumenil, Lipietz, Mohun, and Glick and Ehrbar. Two main issues will be emphasized: (1) the nature of the initial givens in Marx's theory - whether quantities of money capital or quantities of physical inputs and outputs, and (2) the logic of the determination of the rate of profit - whether prior to or simultaneously with prices of production. This paper will argue that "new solution" is a kind of "half-way house" between the traditional interpretation and a fully "monetary" interpretation. In the "new solution", variable capital is taken as given in terms of money capital (as in the "monetary" interpretation), but constant capital is still derived form given means of production (as in the traditional interpretation). As a result, the rate of profit is determined in the "new solution" simultaneously with prices of production, as in the traditional interpretation and contrary to Marx's theory. Particular attention will be given to the theoretical reasons given by the above authors for their different treatments of constant capital and variable capital, and it will be seen that these reasons differ from author to author. It will be argued that that constant capital and variable capital should be determined in parallel fashion and should be taken as given is the quantities of money capital that initiate the circulation of capital. From these initial givens, the rate of profit is determined prior to prices of production.

Riccardo Bellofiore

Marx after Marx or:Do we need a credit theory of exploitation?

The paper deals with the transformation problem in Capital, vol III, as the unfolding of the argument in Capital, vol. I. Old and recent critics of Marx have found a contradiction between the two volumes, since "values" are shown to be redundant in the determination of "prices" in the simultaneous solution; whereas the new interpretation of Dum nil and Foley has rescued Marx's approach centering upon the fact that due to the monetary nature of capitalism the potential value from production must be monetary realised in exchange. Here I offer an alternative interpretation, which shifts the focus from the labour theory of value as a theory of the determination of money prices to the theory of value as the explanation of the origin of the capitalist surplus, and from the role of money as means of exchange and store of value at the closing of the monetary circuit to the role of money as means of payment and finance to production at the opening of the monetary circuit. The theory of "originary" profits is developed in the counterfactual argument of vol. I based on the comparison between the imaginary situation where living labour is equal to necessary labour and the actual situation where living labour exceeds necessary labour. That argument provides a justification for money prices as simple prices proportional to embodied labour coefficients. The two-step trasformation procedure of ch. 9 in vol. III - whereas inputs are valued at simple prices and outputs at capitalist prices fixed through the average rate of profit as the ratio of surplus value over capital valued at simple prices - is the mediating link between the inquiry over the origin of the capitalist surplus and the simultaneous solution. Marx's approach is grounded in the logical and historical priority of "values" over "prices" within each capitalist monetary circuit and on the notion of exploitation as something occurring in production before the exchange on the commodity market. Both elements are dissolved by Sraffians and by the new interpretation. This paper discusses the problems arising in Marx's original presentation because of his commodity theory of money; contrasts the definition of the value of money and of the value of labour power in Marx and in the new solution; supports a rewriting of Marx as a monetary theorist of production proposing a credit theory of money, where money enters the monetary sequence as banks' initial finance, and a credit theory of exploitation, where money capital allows firms' command over the whole of abstract labour and the division of the social working day in production. In the end, some preliminary remarks on method are supplied. Alejandro Valle-Baeza Prices for Regulating and Measuring Marxian Labor Values There is evidence of a strong correspondence between labor values and current prices: Shaikh (1984), Cockshott et al (1995). However it remains to be explained why this correspondence occurs in actual capitalist societies. To accomplish this I will try to sustain that prices are a practical way, in developed mercantile societies, of organizing social labor. It implies that market prices must be close to labor values. Market prices gravitate around production prices; thus my assertion implies too that both set of prices must be close to labor values. This shuld be interpreted: pricing is a form of regulating and measuring labor values. This article follows the suggestion of Perry Anderson (1983) that Marxian theory must respond to its critics for growing and consolidating. To accomplish such an objective in MTV the redundancy criticism has to be faced. This article does not aim to be an exegesis of the Marxist theory of value but a new approach to the labor theory of value inspired by Marx, Marxist theorists and measurement theory. In the first section I will analyze the relationship between exchange value, labor value and the measuring process. The second section is devoted to the problem of justifying measurement , to explain why is indispensable to measure labor values in everyday life. These first two sections assert that labor value is far from being redundant and the third is a criticism of the common redundancy argument. The fourth section contains a summary and conclusion. References Anderson, P. 1983. In the tracks of historical materialism. London: NLB and Verso. Cockshott, P., Cottrell, A. and Michaelson, G. 1995. "Testing Marx: Some new results from UK data". Capital & Class 55: 103-129. Shaikh, A. (1984) "The Transformation from Marx to Sraffa" in Mandel, E. and Freeman eds. Ricardo, Marx, Sraffa. London: Verso pp. 43-84 Andrew Trigg

A Micro Procedure for Measuring Labour Values

One of the most robust results in empirical Marxian economics is the close correlation between market prices and labour values which are calculated using input-output tables. In my paper, however, empirical evididence is introduced, using the same tables, which are calculated using input-output tables. For example, Cockshott and Cottrell (Capital and Classs 1995) have reported this result using the 1984 Uk input-output tables. In my paper, however, empirical evidence is introduced, using the same tables, which brings this result into question. The difference with previous studies is the introduction of a new micro procedure for measuring labour quality. Using micro data from the UK family Expendutire Survey a microeconometric wage equation is estimated which identifies the correlation between the reported characteristics of workers, such as skills and education, and their wages. A set of labour values, which are adjusted for differences in labour quality, is calculated by aggregating this micro information to the industry level. The results of Cockshott and Cottrell are replicated here and compared with the results of the new micro procedure

Peter Hans Matthews

On the Time-Series Properties of Some Marxian Aggregates One of properties of the "new solution" is its ostensible operationalism. In principle, the fundamental Marxian time series (the value of labor power, the rate of surplus value, and the labor value of money, to name the three most prominent) can be "recovered" from standard national income and product accounts (NIPA). The construction of these series calls for the (re)evaluation of the "laws of motion" of capitalist economies, of course, and a careful reconsideration of their statistical properties is one (albeit obvious) means to this end. What does it mean if, as the relevant data appear to support, the value of labor power can be characterized as a random walk? Or if the value of labor power and the ratio of productive to unproductive labor time is co-integrated? What, in other words, are the "stylized facts" of Marxian macroeconomics and how should we best understand them?

Andrew Kliman

Simultaneous Valuation and the Exploitation Theory of Profit are Incompatible It is now generally conceded that, under "simultaneist" value theory (in which input and output prices, and values, are equal), value theory plays no role in explaining the dynamics of capitalism. Yet many simultaneists seem unfazed by this, arguing that the function of their theories is to explain the origin of profit, and that these theories do show that it arises from the exploitation of workers. In particular, the "Fundamental Marxian Theorem" (FMT) is cited as proving that, given simultaneous valuation, profit will be positive only if surplus-labor has been extracted. This paper will prove, to the contrary, that simultaneism and the exploitation theory of profit are incompatible. The FMT holds only when a positive *physical surplus* of every use-value is produced in each period. (I will show that this condition is both unnecessary for systemic reproduction and extremely unlikely to exist.) The FMT actually demonstrates only that, if the physical surplus vector is strictly positive, then both the simultaneist value and price of the physical surplus -- i.e., "surplus-labor" and "profit" -- are positive. However, the extraction of surplus-labor and the production of physical surplus are not the same thing. Workers may clearly perform surplus-labor (by, say, working without being paid), for instance, and yet produce a negative surplus of some use-value(s). By means of simple thought experiments and numerical examples, I will show that, when the physical surplus vector is not strictly positive, simultaneous valuation implies that profit can be positive although no (or negative) surplus-labor was extracted, and profit can be negative (or zero) although surplus-labor was extracted. Hence, simultaneism cannot prove that exploitation is the source of profit. More importantly, simultaneism implies that exploitation is *not* the sole source of profit. I will show that these conclusions apply to all simultaneist interpretations of Marx's value theory, the standard one as well as the simultaneous single-system and "New Solution" interpretations, but not to the temporalist interpretation of Marx's value theory. Hence, a choice must be made between simultaneism and the exploitation theory of profit.

Diego Guerrero

Input-Output And Dynamic Values: A Spanish Perspective

In the last 20 years, there have been two very interesting developments in the field of marxist theory of value. On the one hand, input-output accounts have been used in order to empirically test some relevant aspects of Marx's theory, giving so birth to what could be called marxist input-output economics (MIO). On the other hand, a new approach to values have been developed from a dynamic perspective, which seems to have generated, among other things, a new solution to the old transformation problem: this approach has been usually referred to as the Temporal Single System (TSS) and is called in this Conference the "Temporalist Value Theory" (TVT) . So far, both developments have tended to be seen as incompatible in a certain extent, but it is my contention that they are not in fact. If I am able to manage with my awful English and the fact that I am just beginning to get my first, preliminary, results, I hope to show in this paper: 1) that dynamic values and prices are not only superior from a theoretical point of view but look so as well in connection with the empirical results provided by the Spanish economy. 2) The main reason for that is that value has to be interpreted in the way TVT does: as a quantity of total abstract labor which coincides with the sum of the prices of the inputs plus the total direct labor performed by productive workers. Values and prices of production obtained in this way correlate with market prices better than traditional values and production prices do, and the average deviations between them are smaller with the new definition. 3) However, the traditional equations used in previous empirical research (Shaikh, 1984, 1995, Ochoa, 1984, 1989, Cockshott, Cottrell and Michaelson, 1995, Chilcote, 1997) are still valid and useful, as will be defended here on both theoretical and empirical bases. The reason why the supporters of TVT seem to believe they are not valid is the fact that they to some extent conflate the mathematics involved in solving the problem with the theories actually adopted by the users of these mathematical tools (Freeman, 1997, Moseley, 1997, Giussani, 1998).

Eduardo Maldonado-Filho

Competition and the Equalization of Industry Profit Rates: The Evidence for the Brazilian Economy, 1973-85

Paolo Giussani

Response to Dumenil/Levy's 'Productivity Paradox'

In their recent criticism of the new Temporal Single System (TSS) approach in value and price theory, Gerard Duménil and Dominique Lévy (D&L) maintain that, contrary to the standard simultaneous methodology (SSM), the sequential formalism in the determination of the marxian value magnitudes gives raise at the least to two important paradoxes: 1) A falling productivity with decreasing input-output coefficients, something that would make technical change wholly irrational within the TSS framework. 2) Explosive oscillations (and negative magnitudes) of TSS values in joint production, which would make TSS inconsistent in the most general form of production and in systems with fixed capital. Nevertheless, D&L's claims are not really justified on both points, and depend on some hidden assumptions that they choose not to make open. Rather, it is D&L's standard treatment of values which is indeed revealing of some strong weaknesses of the SSM; weaknesses that have been not tackled in literature only because of the sacred-made nature of the linearly simultaneous tradition of Bortkiewicz, Dmitriev and Sraffa-Marx as a respectable, and even nice, form of academic opposition. Alan Freeman

Endogenous Profit Rate Cycles: Why I Think Marx Was Right

The paper presents a simple disequilibrium model in which the only variables are the rate of profit and the size of capital stock, which exhibits endogenous asymmetric cycles. The fact that such a simple model is possible is used as the starting point to re-investigate a number of debates in economics, in particular the endogenous/exogenous debate in business cycle theory, and accounts of breakdown in early Twentieth-Century Marxist debates, particularly in the Soviet Union. The 'tendency of the rate of profit to fall' does not have to mean that the rate of profit has to fall for ever, as argued by a number of critics of the temporal approach to value. The law can give rise to a variety of dynamic behaviours since, for example, in a slump the rate of profit may be reconstituted by a phase of disacumulation in value terms, during which the value of capital stock declines. The law does assert, however, a simple, definite, and obvious relation between the rate of profit and the size of capital stock, so that accumulation leads to a falling profit rate in value terms without requiring any special behavioural assumptions, as critics of the Okishio theorem have universally supposed. In this light the 'breakdown' debates of the 20s and 30s are revisited, notably the Luxemburg-Bukharin-Bauer-Grossman debate concerning the possibility of extended reproduction under capitalism. It is shown that on the one hand, reproduction need not lead to catastrophic breakdown merely because of the existence of disequilibrium (an alternative being what is actually observed, namely cyclic behaviour) whilst on the other, balanced growth is an exceptional and dynamically unstable condition so that the endogenous generation of cycles is the 'natural mode of existence' of a market economy. More generally it is shown that any asymmetric cycle can be reduced to a two-variable system in which one variable K (which we may take to be capital stock) follows the simple accumulation relation K'=I, and the other follows I'=f(K) where f is a monotonic declining function of K whose convexity or concavity defines the nature of the asymmetry. This suggests that there is a serious problem of overidentification in more sophisticated models, since only two degrees of freedom completely define most commonly-observed periodic behaviours. Indicative reference: Richard B Day "The Crisis and the Cras", Verso, 1987 Duncan Foley The Circuit of Capital, U.S. Manufacturing, and Nonfinancial Corporate Business Sectors, 1947-1993

Ghassan Dibeh

The Kalecki-Frisch Debate and Rise of Modern Business Cycle Theory

This paper discusses and critiques different exogenous business cycle theories (RBC, Lucas,..) on both the analytical and foundational grounds. The paper argues that the recent surge in interest in business cycles reopens the question posed earlier in the century on the incorporation of business cycles into economic theory (Kuznets, 1931). Moreover, the modern exogenous theories take the Frischian impulse and propagation mechanisms dichotomy and reduce it further into an impulse-only theory of the business cycle. The Frischian view of impulses as reinforcement mechanisms (Frisch, 1933) that prevent the cycle from dying down is replaced by a system that generates cycles upon impulse only. An alternative modeling strategy is proposed that calls for the inclusion of time delays and nonlinearities into the models of the business cycle. Moreover, it is argued that these time delays and nonlinearities depend essentially on the specificity of capitalist production and relations. Given the historical, methodological, and analytical arguments that contradict the claim that pure exogenous cycle theory is any kind of scientific progress, the dominance of these models in macroeconomics should be called into question. Piruz Alemi The Circuit of Capital, U.S. Manufacturing, and Nonfinancial Corporate Business Sectors, 1947-1993 Alan Freeman What Happens in Recessions? A Value-theoretic Approach to Liquidity Preference The sharpest way to present the purpose of this paper is to restate a remark I made at the last conference: in my view, the temporal interpretation of Marx has more in common with Post-Keynesianism than it has with the rest of Marxism. An encounter between Post-Keynesianism and the temporal approach to Marx can only benefit both. I argued elsewhere that economic thought is divided not by the schism between classical and marginal, but the chasm between time and equilibrium. This divide is found in more or less every branch and every period in the history of economic thought; the classical variant of equilibrium appeared as Say's Law, while the Austrians tried to become the temporal variant of marginalism. If I have rightly understood what Balinky calls the 'Weintraub-Davidson-Eichner' project, it is an attempt to identify what 'temporalist' approaches have in common. I want to put the case that there is a new element to this project, namely the growing body of evidence that Marx, too, was a temporalist. Why do the good guys always lose? The equilibrium view generally dominates, because as Eichner notes, economics is not a science. It spontaneously promotes an equilibrium variant of everything in it no matter how dissident or heterodox ? whether this be ISLM Keynesianism, dualist Marxism, or Walrasian marginalism. This is because only the equilibrium paradigm provides a theoretical apparatus which guarantee conclusions to which its funders are amenable. A Gresham's Law of theoretical selection operates to promote it. In particular, in any rigorous analysis, equilibrium turns out to be an indispensible support for the neoclassical 'real-nominal' distinction. The core of this paper is the argument that the real-nominal distinction is a disguised theory of value; it operationalises the idea that real assets are measured by the use-value, or 'quantity of things' which they contain. This concept, I argued last year, underlies both marginal and Sraffian general equilibrium; indeed the apparently rival concepts of utility and 'physical quantity' emerge on closer study as two different aspects of the same actually-existing thing ? use-value. The balance of evidence in my opinion shows that this 'use-value' concept of value has been mistakenly attributed to Marx by most of economics. Not surprisingly, it does not exhibit the behaviour which a genuinely temporal approach reveals, such as a rate of profit which falls as accumulation proceeds. Two strongly disputed assertions have thus been discounted by the mainstream on the selfsame grounds. The Post-Keynesian insistence that money matters, and the Marxist insistence that accumulation begets a falling profit rate, are both discounted on the basis of two linked postulates: equilibrium, and the pre-pubescent notion that the size of a thing reveals its value. The time is propitious for a rigorous alternative foundation. It would be vain to imagine this could gain the affections of our funders, but it could provide a more solid bulwark against their prejudices. Since equilibrium provides a false foundation, we must ourselves ask without prejudice 'what can we assume that we know, if we deny equilibrium?' This is the approach of this paper. I show that on extremely simple assumptions, we can demonstrate temporal phenomena with no counterpart in comparative statics. In particular, the notion of liquidity preference can be deduced from simple temporal identities; the quantity theory of money, and the notion that money is a veil, can also be refuted. Finally by connecting these dynamic equations to an evident relation between accumulation and the rate of profit, we can show that simple temporal explanations are available, though inaccessible to any equilibrium account, for both the cyclical movement of the economy and its 'catastrophic' phase of a sudden sharp decline in asset prices followed by a relatively rapid fall in the pace of accumulation. Randall L. Wray Keynes's Two Theories of Value This is an extension of a Cambridge Journal article (Wray 1992b) which argued that liquidity preference theory should be interpreted as a theory of value. Here I will argue that two theories of value are needed for analysis of a monetary production economy: the labor theory of value and the liquidity preference theory of value. Both Keynes and Marx were trying to develop a monetary theory of production; Marx, o course, adopted a labor theory of value in his analysis: and I previously argued that Keynes adopted a liquidity preference theory in his. A monetary theory of production should adopt both, however, and I will argue that Keynes seems to have recognised this. It is true that Keynes never explicitly adopted a labor theory of value (at least, he certainly did not adopt Marx's version), nor even the liquidity preference theory of value. However, he did endorse Towshend's exposition of liquidity preference, which some have interpreted as a theory of value. Further, Keynes did adopt labor hours as the measure of value and said he agreed that labor produces all value. I admit is still a leap to claim that Keynes accepted both theories of value. Instead, I argue that he should have adopted both and will show that this is consistent with the purposes of the General Theory. Note from AF: since the paper to be presented is awaiting journal publication, for copyright reasons it cannot be disseminated with the other conference papers, but will be made available in limited quantities by the author at the conference. Roy Rotheim Involuntary Unemployment in a Monetary Theory of Value Ann Davis The Contradiction of the Abstract and the Concrete in Marx's Capital, with Particular Application to Women The contradiction between the abstract and concrete is underdeveloped in commentary on Marx's work. This paper will elucidate some of the key elements, and apply the contradiction to the analysis of the role of women in the capitalist economy. First the paper will review the contradiction of the Abstract/Concrete in commodities, labor, and money, as developed primarily in Capital. Then this contradiction will be applied to circuits of moeny and commodities, showing how concrete circuits can explicitly include the contribution of women. The contradiction of the abstract and concrete is examined in the circuits of money and commodities, and in the development of institutional forms as capitalism develops, via class struggles among various social groups. Of particular interest is the struggle around regulation of the conditions of labor and constitution of the labor force. The implications are drawn for Marxist Feminist method. Engelbert R Stockhammer

Exploitation in a Dual-System Economy: An Application of the Labor Theory of Value to Capitalist and Domestic Exploitation After the Domestic Labour Debate of the 1970s Marxian Economists have with few exceptions neglected the question of women's exploitation in the household. Parallel, the developing field of Feminist Economists mostly operates outside the Marxist framework. However, Marxian Economics has made considerable progress in the past 20 years, especially regarding the concept of exploitation and the labour theory of value. Incorporating these new insights and building on the Dual System Theory, this paper presents a simple model that allows the calculation of rates of exploitation for men and women, taking into account the time worked in the household as well as in the (capitalist) factory. The model is illustrated by way of application to the time use study for Austria 1992. Finally exploitation rates for the capitalist sector alone are calculated. The central finding of the empirical application is that women are more exploited than men. An interesting finding for a Marxist model. structure: LTV and exploitation domestic class process model of a simple corn bread economy illustration Austria 1992 exploitation in the capitalist sector problems conclusion bibliography

Thomas Masterson

Household Labour, the Value of Labour Power and Capitalism I will consider various approaches to the nature of household labour and its fit into the Marxian Labour Theory of Value. My conclusion will be that household labour should be included (for theoretical and political reasons). I will then assess the implications of this inclusion for the LTV, and its characterization of capitalism. Andrew Kliman Capitalist Macrodynamics Without Capitalist Value? NOTE from Alan Freeman: The genesis of this paper is a suggestion that developed in discussions between IWGVT organisers and David Laibman for a session which would focus on issues raised in David's recent book [Laibman, David. 1997. Capitalist Macrodynamics: a systematic introduction (Houndmills and London: Macmillan Press)]. The abstract below is an excerpt from Andrew Kliman's paper for this session David Laibman has the misfortune of bearing the brunt of my critique only because his recent Capitalist Macrodynamics: A systematic introduction is the immediate focus of discussion. The substance of the critique has almost nothing to do with the particulars of his book, but with its overall theoretical approach, an approach which he shares with many, many others. The approach in question attempts to make physical input-output relations the primary determinant of value, price, and profit. One variant of that approach, the one to which Laibman subscribes, also purports to combine it with some sort of theory in which value (and thus price and profit) is determined by labor-time. The first aim of my paper is to show that this variant is self-contradictory; the source of the problem, of course, is that something is either determined by physical relations, or it is determined by labor-time, but not by both. I uncover the contradiction as it appears in Laibman's book, and as a contradiction between the physical and (labor-time-determined) value profit rates, which can move in opposite directions. I then confront the question of whether the tendency of the latter matters at all. Being Jewish, however, I answer it with another question: does the physical profit rate matter (or, more precisely, do its counterparts in a multi-sector economy, the profit rate measured in terms of a money commodity or numéraire, matter)? The second aim of my paper is to show that they do not or, at least, had better not, because they lead to arbitrary and self-contradictory results. I first show that the level of the profit rate, even a uniform profit rate in the long-run, can depend on the specific good that serves as the money commodity or numéraire. Just as use-values themselves are heterogeneous, so are the profit rates measured in terms of them. This demonstration is followed by one which shows that this phenomenon can result in one and the same economy having different dynamic paths under different monies or numéraires.

David Laibman

Technical Change, Structural Change, and the Profit Rate

Robert Burns

Rethinking the Law of the Tendency for the Rate of Profit to Fall

This paper's aim is to reconsider some recent debates over the Tendency for the Rate of Profit to Fall (TRPF) in light of a careful reading of Capital. Such a careful reading of Capital reveals an abundance of knowledge about the dynamics of capitalism: its dynamism alongside its vulnerability and fragility. This knowledge from Capital has been collectively 'forgotten' due, in part, to the recent resurgence of vulgar and neo-Ricardian economics within the left. Within the debate over the TRPF, this collective 'forgetfulness' manifests itself in the widely heralded Okishio theorem. Though many Marxists have engaged the rhetorical claims of the proponents of the Okishio theorem, they have often taken the position that Marx's method is different from and therefore incompatible with the method of the vulgar and neo-Ricardian economists. The vulgar and neo-Ricardian economists on the left typically reject such a position as rubbish. Many of them adopt an essentialist methodology which believes there is only one essential truth and therefore only one 'Theory' that can capture that truth. Any talk of multiple methods or multiple theories is rejected outright. Furthermore, they argue that since logical inconsistencies are absent from the Okishio theorem, it must embody that 'True Theory.' My view is opposed to these theoretical essentialists and I side with the Marxist claim that Marx's methodology is different from that of vulgar and neo-Ricardian theorists; it therefore produces different truths. However, my understanding of Marx's method compels me to do more than simply declare its theoretical difference. My understanding is that method places great importance on Marx's concept of critique. I understand this concept of 'critique' as moving beyond simply declaring methods and truths as different. The role for Marxist critique is to delineate those differences: to create a new truth from these different and disparate truths. The TRPF is clearly evident within Marx's textual development of Capital. In contrast, the TRPF is absent from the literature advanced by the Okishio theorem's proponents. The role of critique is not simply to state and restate one position against another; critique instead produces an understanding of the differences in those positions. This paper is motivated by just this spirit of critique and so I organize this paper into three main parts. In the first, I try to restate some of the more important aspects of the TRPF developed by Marx. In the following two sections, I turn toward a critique of the Okishio theorem; toward understanding why the TRPF is absent from its position. Section three shows how the Okishio theorem carries such persuasive power due to ambiguities surrounding its viability condition. Its persuasive power derived mainly from several ambiguities that surround its terminology. Its method is primarily a method of persuasion through confusion. These ambiguities condense in the so-called viability condition which allows the theorem's proponents to derive their results. The theorem's proponents have rarely justified their use of the viability condition. Even when such rare justification does arise, it has only mired the theorem in further ambiguities. Section four then examines Marx's most unique contribution to the debate over the TRPF. We see there how Marx's introduction of fixed assets and capitalist competition through revolutionizing the means of production lead to another TRPF; this one arising from the contradictory influence of technological innovation.

Antonio Callari

Labor and Community: Ontology and Politics Bertell Ollman Marx's Labor (Alienated) Theory of Value: What Does It Add to Stress this Alienation? Ted McGlone Is Value Determined by Labor-Time or by Use-Value? Abelardo Mari-a Flores A Critique of Benetti and Cartelier's Critical Examination of Marx's Theory of Money Benetti and Cartelier criticise the logical consistency of the propositions inherent to Marx's theory of value. One of their main targets is to prove that Marx did not succeed in the derivation of the concept of money from that of commodity and therefore from commodity exchange relationship. Rather Cartelier argues that money need to be postulated in the analysis of commodity production. In particular, they argue that money-form cannot be derived by inverting the expanded form of value as Marx did in section 3 of chapter 1 of Capital I: "the reversal of the expanded form does not generate anything but the expanded form itself" (Cartelier, 1991: 259). As a consequence, they propose to restate Marx's theory of value in a different framework, that is, a 'monetary approach' in which one of "the fundamental assumptions on which the theory of commodity society (and of capitalist society) rests [is] the existence of money" (Cartelier, 1991: 260). This paper deals with a critical examination of Benetti and Cartelier's critique. Considering that Marx's method in Capital is dialectical, it is our contention that Benetti and Cartelier's critical analysis comes from a misreading of it not only in terms of formal logic, but also in terms of what it is known as the 'logical-historical method'. The first part of the paper treats the subject-matter of the first part of Capital I. Contrary to Benenti and Cartelier who argue, following a long tradition, that it is the analysis of commodity society in general, we argue that it is the analysis of the immediate appearance of capitalist production. The subsequent parts treat the dialectical moments through wich Marx presents the genesis of the money-form of value, that is, the simple form,the expanded form, the general form and the money form of value. In particular, the analysis focusses on the specific type of dialectical relationsthrough which Marx treats each moment and their transition from one to the other. Throughout this presentation Benetti and Cartelier's critical arguments will be confronted. Contrary to Benetti and Carteliers's arguments, our analysis shows that Marx's derivation of the money form of value is not only logical consistent, but also fully logically connected with his value theory.In particular, it wil be shown that, on the basis of Marx's conceptualization of the value-form, the inversion of the expanded form of value can only result in the general (and money) form of value. Bibliography: Arthur, Christopher J., 1979 "Dialectic of the value-form" in Diane Elson (Ed) Value: The Representation of Labour in Capitalism, CSE Books/Humanities Press, London/New Jersey Arthur, Christopher J., 1997 "Against the Logical-Historical Method: Dialectical Derivation versus Linear Logic" in F. Moseley and M. Campbell (Ed) New Investigations of Marx's Method, Humanities Press, New Jersey, U.S.A. Benetti, Carlo, 1990 Moneda y teoria del valor, FCE-UAM, Mexico Benetti, Carlo and Cartelier, 1980 Jean, Merchands, salariat et capitalistes, Francois Mapero, France Benetti Carlo and Cartelier jean, 1984 "El capital como extension de la mercancia: una contradiccion de la Economia Politica" en Lecturas de Economia, Mayo-Agosto, Medellin, Colombia. Cartelier, Jean, 1991 "Marx's theory of value, exchange and surplus value: a suggested reformulation" in Cambridge Journal of Economics, 15, pp. 257-26 Fausto, Ruy, 1983 Marx: Logica & Politica, Editora Brasiliense, Brasil Marx, Karl, 1976 "The Commodity" in Dragsted (ed) Value: Studies by Karl Marx. A Spanish translation is published in Marx, 1977a. Marx, Karl, 1977a "La forma de Valor", appendix to the first german edition of Capital in El Capital, tomo I/Vol. 3: 1017-1041, Siglo XXI, Mexico Marx, Karl, 1977b Capital. A Critique of Political Economy, volumes I and III, Progress Publishers, Moscow Robles-Baez, Mario L, 1997 "On Marx's Dialectic of the Genesis of the Money-Form", paper presented in the International Seminar: Marx: Logica y Capital, UAM, Mexico Williams, Michael, 1992 "Marxists on money, value and labour-power: a response to Cartelies" in Cambridge Journal of Economics, 16, 439-445

Antonio Callari

One Marxist View of Money and Interest Claus Magno Germer Credit Money and the Functions of Money in Capitalism In a widely quoted passage, Marx suggested that money (=gold) could be completely withdrawn from the internal sphere of circulation, at the same time as it remained essential for the international trade, as world money. A demonstration of the consistency of that proposition has been provided by the historical development itself. After 1930 monetary gold has been officially withdrawn form the circulation functions in the capitalist countries, but continued officially to perform the functions of measure of value and basis of monetary standards, as well as means of payment in international transactions. It should be pointed out that the passage mentioned above appears in Capital III, in the context of the exposition of the credit system and credit money. This is not accidental, since the hypothesis of complete withdrawal of gold from circulation is based on the assumption of the full development of the credit system. On the other hand, Marx's suggestion is limited to the withdrawal of gold strictly from the functions of means of circulation and of payment, where it is replaced by different forms of credit money. The functions of measure of value and of monetary standard, however, belong exclusively to the money-commodity, which means that in these cases gold cannot be replaced. It is also to be stressed that Marx derived the mentioned proposition from the theoretical justification of the functions of money, and of the development of credit money as an internal necessity of capitalism. In this way, there is no contradiction between the removal of gold from these functions and Marx's theory of money, and this is in fact not the reason for the suggestion by several authors, that Marx's theory of commodity money has been overcome by the evolution of capitalism. The reason is the official abolition, in the seventies, of any formal connection between current monetary standards and a money commodity as their objective base. The present paper attempts to analyse the implications of the withdrawal of money (=gold) from its circulations functions, and its complete replacement by credit money in developed capitalism. In spite of the relevance of credit money in Marx's theory of money in capitalism, the analysis of the nature of credit money and of the implications of its dominance at the level of circulation have not been attempted by Marxist authors in significant degree and scope. This is meaningfull since the correct understanding of contemporary capitalism in terms of Marx's theory is impossible without a thorough assessment of Marx's concepts of credit system and credit money. This paper aims to contribute to the accomplishment of this objective. Fred Moseley Discussant Discussants' comments on the paper by Marina Flores and Robles Baez on Benetti-Cartelier's critique of Marx on money

Mario Robles-Baez

A Critique of Benetti and Cartelier's Critical Examination of Marx's Theory of Money Benetti and Cartelier criticise the logical consistency of the propositions inherent to Marx's theory of value. One of their main targets is to prove that Marx did not succeed in the derivation of the concept of money from that of commodity and therefore from commodity exchange relationship. Rather Cartelier argues that money need to be postulated in the analysis of commodity production. In particular, they argue that money-form cannot be derived by inverting the expanded form of value as Marx did in section 3 of chapter 1 of Capital I: "the reversal of the expanded form does not generate anything but the expanded form itself" (Cartelier, 1991: 259). As a consequence, they propose to restate Marx's theory of value in a different framework, that is, a 'monetary approach' in which one of "the fundamental assumptions on which the theory of commodity society (and of capitalist society) rests [is] the existence of money" (Cartelier, 1991: 260). This paper deals with a critical examination of Benetti and Cartelier's critique. Considering that Marx's method in Capital is dialectical, it is our contention that Benetti and Cartelier's critical analysis comes from a misreading of it not only in terms of formal logic, but also in terms of what it is known as the 'logical-historical method'. The first part of the paper treats the subject-matter of the first part of Capital I. Contrary to Benenti and Cartelier who argue, following a long tradition, that it is the analysis of commodity society in general, we argue that it is the analysis of the immediate appearance of capitalist production. The subsequent parts treat the dialectical moments through wich Marx presents the genesis of the money-form of value, that is, the simple form,the expanded form, the general form and the money form of value. In particular, the analysis focusses on the specific type of dialectical relationsthrough which Marx treats each moment and their transition from one to the other. Throughout this presentation Benetti and Cartelier's critical arguments will be confronted. Contrary to Benetti and Carteliers's arguments, our analysis shows that Marx's derivation of the money form of value is not only logical consistent, but also fully logically connected with his value theory.In particular, it wil be shown that, on the basis of Marx's conceptualization of the value-form, the inversion of the expanded form of value can only result in the general (and money) form of value. Bibliography: Arthur, Christopher J., 1979 "Dialectic of the value-form" in Diane Elson (Ed) Value: The Representation of Labour in Capitalism, CSE Books/Humanities Press, London/New Jersey Arthur, Christopher J., 1997 "Against the Logical-Historical Method: Dialectical Derivation versus Linear Logic" in F. Moseley and M. Campbell (Ed) New Investigations of Marx's Method, Humanities Press, New Jersey, U.S.A. Benetti, Carlo, 1990 Moneda y teoria del valor, FCE-UAM, Mexico Benetti, Carlo and Cartelier, 1980 Jean, Merchands, salariat et capitalistes, Francois Mapero, France Benetti Carlo and Cartelier jean, 1984 "El capital como extension de la mercancia: una contradiccion de la Economia Politica" en Lecturas de Economia, Mayo-Agosto, Medellin, Colombia. Cartelier, Jean, 1991 "Marx's theory of value, exchange and surplus value: a suggested reformulation" in Cambridge Journal of Economics, 15, pp. 257-26 Fausto, Ruy, 1983 Marx: Logica & Politica, Editora Brasiliense, Brasil Marx, Karl, 1976 "The Commodity" in Dragsted (ed) Value: Studies by Karl Marx. A Spanish translation is published in Marx, 1977a. Marx, Karl, 1977a "La forma de Valor", appendix to the first german edition of Capital in El Capital, tomo I/Vol. 3: 1017-1041, Siglo XXI, Mexico Marx, Karl, 1977b Capital. A Critique of Political Economy, volumes I and III, Progress Publishers, Moscow Robles-Baez, Mario L, 1997 "On Marx's Dialectic of the Genesis of the Money-Form", paper presented in the International Seminar: Marx: Logica y Capital, UAM, Mexico Williams, Michael, 1992 "Marxists on money, value and labour-power: a response to Cartelies" in Cambridge Journal of Economics, 16, 439-445

Piruz Alemi

Forms of Money and Laws of Monetary Circulation: On the Origin of Controversies in Modern Credit Theory The theoretical debates of the Banking and the Currency school is a powerful framework for the study of the dynamics of capitalist production. The origin of these debates cuts across both financial and real sectors and continues to permeate through present monetary controversies. Their debates is applied to a wide range of official statistics and empirically demonstrated. It is shown that Thomas Tooke's classification of different forms of money are crucial and the different functions of money have different explanatory powers for bank reserves, price fluctuations and credit policies. We locate the controversy in the context of statistical data from the resumption of Bank of England specie payment (Gold convertibility) in 1821, to the passing of the Bank act of 1844-45, up to the financial crises of 1866. A synthesize of these seemingly contradictory theories traces its implications for post Keynsian, Monetarist and Marxian economics with applications for Government, Banking and Corporate finance / credit policies. We conclude: 1). Break down of monetary categories and understanding their different functions and modus operandi is absolutely crucial for analysis of any financial crises. We find that bills of exchange and bank notes are not associated yet the constituent parts of bills of exchange do affect bank note circulation as well as commodity prices. The relation of these two categories was a major point of contention. This result highlights the short coming of any monetary aggregate analysis 2). The volume of bank notes could not explain variation in gold reserves nor fluctuation in price of commodities. 3) The outflow of gold affected interest rate before it could bring the desired effects on prices. This other result invalidates the quantity theory of money. At the theoretical level we find 1) lack of a value theory of credit in Tooke as a major drawback for bridging the gap between the two schools 2) Confusion over different categories of money , subject to different laws of circulation, and its consolidation by the Currency school. This may be interpreted in accordance with Marx's criticism of both the quantity theory and Tooke's price theory position. Salim Khan Forms of Money and Laws of Monetary Circulation: On the Origin of Controversies in Modern Credit Theory The theoretical debates of the Banking and the Currency school is a powerful framework for the study of the dynamics of capitalist production. The origin of these debates cuts across both financial and real sectors and continues to permeate through present monetary controversies. Their debates is applied to a wide range of official statistics and empirically demonstrated. It is shown that Thomas Tooke's classification of different forms of money are crucial and the different functions of money have different explanatory powers for bank reserves, price fluctuations and credit policies. We locate the controversy in the context of statistical data from the resumption of Bank of England specie payment (Gold convertibility) in 1821, to the passing of the Bank act of 1844-45, up to the financial crises of 1866. A synthesize of these seemingly contradictory theories traces its implications for post Keynsian, Monetarist and Marxian economics with applications for Government, Banking and Corporate finance / credit policies. We conclude: 1). Break down of monetary categories and understanding their different functions and modus operandi is absolutely crucial for analysis of any financial crises. We find that bills of exchange and bank notes are not associated yet the constituent parts of bills of exchange do affect bank note circulation as well as commodity prices. The relation of these two categories was a major point of contention. This result highlights the short coming of any monetary aggregate analysis 2). The volume of bank notes could not explain variation in gold reserves nor fluctuation in price of commodities. 3) The outflow of gold affected interest rate before it could bring the desired effects on prices. This other result invalidates the quantity theory of money. At the theoretical level we find 1) lack of a value theory of credit in Tooke as a major drawback for bridging the gap between the two schools 2) Confusion over different categories of money , subject to different laws of circulation, and its consolidation by the Currency school. This may be interpreted in accordance with Marx's criticism of both the quantity theory and Tooke's price theory position. Clark Everling

Connecting the Links in the Value Chain

The purpose of this paper is to understand the Marxist theory of value in its logical and historical evolution, up to and, especially including, the present time. This task involves an understanding of the theory and practice of human social reproduction as understood by Marx and Engels, the evolution of capital as detailed by Marx, and the evolution of urban space and economic globalism through both of these relations. Value is a relationship among people which mediates the production, distribution, exchange, and consumption of goods and services within capitalism. Value is made possible by the existence of wage labor and the creation and exchange of all commodities, including the ablilty to labor, on the basis of value. Social exchange on the basis of value is simultaneously the source of surplus value for the reason that labor creates more values in production for exchange than it receives in the form of wages. Wage-labor, and production, exchange, and distributive relations under capitalism have their primary results in the restoration of capitalist and worker to their respective class positions. Value, as defined according to socially necessary labor-time in production, is not only the basis for exchange, but also the basis for capitalist accumulation, and concentration and centralization of ownership. Consequently, the more capitalism develops productive and social relations on the basis of value, the more the concentration and centralization of capital emerge in opposition to existing forms of production, distribution, exchange, and consumption and contradict requirements for human life and development involved in these. Human social requirements under capitalism develop increasingly as urban forms of life and it is these, and the productive bases on which they rest, as the bases for human life, that are ever more undermined by capital, even as capital extends urban requirements as products of the extension of its own production and exchange relations. This contradiction between the socialization of life into urban space and the private appropriation of the benefits of that socialization are now played out on a global scale with ever more severe and inhumane consequences.

David Andrews

Commodity Fetishism as a Form of Life Piero Sraffa was greatly influenced by Marx and in turn exerted enormous influence on the later Ludwig Wittgenstein. In his discussion of commodity fetishism, Marx himself suggests an analogy between language, which was Wittgenstein's primary focus, and the value of commodities, a major concern for Marx. This paper explores similarities in the works of Marx and Wittgenstein. Specifically, it is argued that Marx's criticism of the commodity fetishism of classical political economy is structurally similar to the later Wittgenstein's criticism of the argument of his earlier Tractatus Logico-Philosophicus. Each contrasts the straightforward value or meaning in use of commodities or words with the metaphysical constructions of political economists or philosophers. Just as Marx argues that classical political economy failed to see the historically specific character of commodity production and therefore attribute an objective and universal character to commodities, Wittgenstein argues that his earlier work failed to recognize the historically specific characteristics of language and attributed an objective and universal character to words. Just as Marx argues that commodity production is one particular form of social production, Wittgenstein argues that a particular use of language is tied to a "form of life" Gloria L Zu-iga The Theory of Subjective Value Reconsidered My paper addresses a concern that some philosophers have raised about truth in normative judgments such as economic value judgments. It is true that from the turning point in the history of economic thought, when subjective value replaced the labor theory of value, economists have addressed the fundamental epistemic problem of error. Menger, for instance, distinguishes economic subjectivism from notions of arbitrariness or relativism by pointing out that individuals can be wrong in their economic judgments. Nevertheless, nowhere in the body of economic theory can be find the answer to the following question: how is truth instantiated in economic value judgments? My paper attempts to offer an answer.

Paresh Chattopadhyay

Capitalism as Socialism: Defense of Socialism in the Socialist Calculation Debate Revisited. A Marxian Point of View It is sixty years since Oskar Lange defended socialism in a famous debate with Mises, Hayek and Robbins, who had argued that rational allocation of productive resources was impossible in socialism, inasmuch as the absence of private ownership in the means of production would do away with the price system, the only rational basis for allocating the productive resources. In reply to the anti-socialists, Lange, while accepting the argument that there could be no rational economic calculation in the absence of the price system, rejected the other argument of the opponents that such calculation could not be effected in the absence of private ownership in the means of production. Lange's demonstration was built on the arguments earlier advanced by a number of non (and anti-) socialists - Pareto, and particularly Barone and Taylor - on the viability of socialist economy based on rational economic calculation. At about the same time Abba Lerner, often in close collaboration with Lange, developed similar ideas (Lerner 1934, 1935, 1936). Though Lange's initial contribution appeared in the form of two journal articles (1936-1937), the final version appearing one year later (Lange, Taylor 1938), was in fact a revised version in important respects in the light of Lerner's significant critical comments on Lange's work appearing in the same journal (Lerner 1936). Afterwards, Lerner, though not abandoning socialism, considerably modified his original position on socialism attaching more importance to the question of democracy and less importance to the question of ownership of the means of production (Lerner 1944). (Lange, a convinced socialist, did not, in his later years, depart substantially from his initial position.) Here we give a brief outline of the substance of the so-called Lange-Lerner model (LLM for short) as we find it in Lange's work published in 1938 before we comment on it generally. We justify the Marxian approach adopted in this paper by the fact (noted below) that Lange himself, the principal defender of socialism in the debate, not only claimed to have derived his basic concepts (of capitalism and socialism) from Marx but he also squarely placed Marx and the "Marxist school" on his side in the debate, in spite of the "limitations" of the latter's "simplistic solution" through the labor theory of value.

Alejandro Valle-Baeza

A Comparison of Price-Value Correspondences between Mexico and U.S. Manufacturing Industries In this paper I will present a comparison of value-price correspondences between Mexico and US manufacturing for 1970 to 1993. For measuring value-price correspondence it will be used my own method proposed in Valle ( 1994). Such method uses NIPA information available annually instead using input output data required by Mosrishima-Seton approach. The second section of the paper will be devoted to link this results to the discussion about value-price deviations. I am interested specially in to enlighten the problem of the relevance of price-value deviations at aggregate and individual levels. I will try to link my empirical results with the polemic in ope-l mainly: Kliman, Freeman, Cockshott and Cotrell. References: Freeman, A "The Transformation of Prices into Values: Comment on the chapters by Simon Mohun and Anwar Shaikh" in Bellofiore ,R(ed). 'Marxian Economics: A Reappraisal' (Essays on Volume III of Capital), Volume 2: Profit, Prices and Dynamics. MacMillan Press Valle, A. (1994.). "Correspondence Between Labor Values and Prices: A New aproach", Review of Radical Political Economics, v. 26(4), pp. 57-66. Note from AF: for reasons of time the author could not complete this paper before the conference. The paper that is distributed for this session is an earlier paper submitted as background for reasons of time; the following short description here is taken from the introduction) El pensamiento marxista en general y el económico en particular se enfrentan a tres tareas: a) criticar a los sistemas alternativos, b) responder a las críticas que se le han hecho y c) desarrollar nuevos conocimientos dentro del sistema marxista. Este trabajo se enfoca principalmente al tercer punto y sólo tangelcialmente haremos alguna crítica al pensamiento no marxista. En la primera parte del trabajo proponemos una definición del concepto de productividad, en las partes II-IV utilizamos la definición anterior para presentar proposiciones importantes y conocidas como nuevos resultados dentro de la teoría marxista: a) el significado de las variaciones de la llamada productividad laboral, b) la relación entre la distribución del producto entre capitalistas y trabajadores con la productividad y los salarios reales, c) la comparación de los PIB por trabajador entre países.

Edward Chilcote Vertical Integration and Classical Economic Theory The debates around value and price can be more fully informed by bringing empirical information to bear on the questions and framework of classical political economy. The availability of input-output accounts and related data today makes the calculation of labor values and other relevant classical economic variables possible. Empirical work that utilizes these accounts is an important dimension of research on value and price and remains largely undeveloped. The vertically integrated approach of classical political economy can easily substitute data from the input-output accounts in place of the numerical examples frequently used to make theoretical arguments. In this way, classical theoretical positions can be empirically informed. Despite playing a fundamental role in the development of vertical integration in empirical analysis, input-output economists have not formulated their hypotheses around the issues that directly concern classical political economy. Input-output economists have mostly ignored the links of their own work to the classical economic tradition. Hence, much of the input-output literature is not theoretically motivated in the same way as classical political economy. Empirical research on technical change is often done without a clear sense of its theoretical implications. Yet, for theoretical reasons the analysis of technical change should utilize the vertically integrated framework of the classical economists in place of the direct coefficients framework frequently used in input-output analysis. The vertically integrated "sector," associated with classical economic theory, is superior to the input-output "industry" because it reduces all the complex heterogeneous inputs to a simple homogeneous input. Marx thought in terms of comparing the total labor used in the production of commodities in each industry. Vertically integrated labor coefficients are constructed through the whole intricate pattern of inter-industry connections, but capture all the labor inputs in a simple summary statistic, which Marx called value. Hence, empirical value analysis is made possible by vertical integration, and is appropriate since Smith, Ricardo, and Marx utilized vertical integration as the basis of their theories of value. This paper addresses the concept of vertical integration in the classical economic tradition and shows how it can be given empirical content utilizing the framework developed by Sraffa (1960), Leontief (1986), Pasinetti (1980), Ochoa (1986), and Shaikh (1995). Classical "value" categories are given empirical content and pertinent theoretical issues are explored. Four major parts are presented to show the applicability of vertical integration for the analysis of technical change and to the calculation of embodied labor coefficients and prices of production. In Part One, I examine the conceptual use of vertical integration in the works of Smith, Ricardo, and Marx. In Part Two, I discuss the advantages and drawbacks of the "direct" interindustry approach and argue in favor of the vertically integrated approach. In Part Three, I show how the input-output framework can be used to calculate vertically integrated labor coefficients. In Part Four I consider the use of vertical integration in the calculation of embodied labor time, and present three numerical examples framed in the input-output framework to illustrate how vertical integration can be used to inform theory.

Lefteris Tsoulfidis

The Deviation Of Labor Values From Production Prices And Market Prices: Theory And Evidence From Greece This article seeks to fullfil two basic purposes. First to present in a brief but concise way a specific approach of Marxian labor theory of value with focus on the formation of the general rate of profit and prices of production. We also provide a critical review of the basic aspects and major theoretical issues surrounding the labor theory of value that have appeared within the marxian approach. The second and at the same time basic purpose of this article is to extend in the case of the Greek economy the empirical investigation of the relationship between labor values, prices of production, market prices, as well as the rate of profit expressed in value terms, prices of production and market prices. In the long history of this theoretical debate around the relationship between values and prices, that is the *transformation problem* and its meaning for the internal logic and scientific value of the labor theory of value only in the last decade or so there has been some discussion on the criterio of empirical testing of the validity of the theory. It is clear that by subjecting the theory to empirical tests with data from various countries helps in the derivation of more useful conclusions with regard the validity and the logical coherence and therefore practical significance of the labor theory of value as a tool for the analysis of capitalist economies. Rafat Fazeli The Economic Impact of the Welfare State and the Social Wage: The British Experience Thanasis Maniatis The Deviation Of Labor Values From Production Prices And Market Prices: Theory And Evidence From Greece This article seeks to fullfil two basic purposes. First to present in a brief but concise way a specific approach of Marxian labor theory of value with focus on the formation of the general rate of profit and prices of production. We also provide a critical review of the basic aspects and major theoretical issues surrounding the labor theory of value that have appeared within the marxian approach. The second and at the same time basic purpose of this article is to extend in the case of the Greek economy the empirical investigation of the relationship between labor values, prices of production, market prices, as well as the rate of profit expressed in value terms, prices of production and market prices. In the long history of this theoretical debate around the relationship between values and prices, that is the *transformation problem* and its meaning for the internal logic and scientific value of the labor theory of value only in the last decade or so there has been some discussion on the criterio of empirical testing of the validity of the theory. It is clear that by subjecting the theory to empirical tests with data from various countries helps in the derivation of more useful conclusions with regard the validity and the logical coherence and therefore practical significance of the labor theory of value as a tool for the analysis of capitalist economies. Andrew Kliman The Significance of the 'Internal Inconsistency' Allegations

Barkley Rosser

Statics and Dynamics in Value Theory The discussion will refer to the author's review of Freeman and Carchedi, editors(1996) "Marx and non-Equilibrium Economics" (Cheltenham:Elgar) which originally appeared in the Journal of Economic Organization and Behavior and is circulated at this conference as background to the discussion Gary Mongiovi Non-Equilibium Marxism: A Sraffian Perspective This project is a critique of a relatively new interpretative and analytical approach within Marxian political economy. Since the publication of L. Von Bortkiewicz's analysis of Marx's tranformation of labor values into prices, it has been generally acknowledged that Marx's treatment was inadequate, and in particular that prices can be explained without reference to Marxian labor values. How damaging this result is to Marx's larger research program is a matter of some debate (and depends of course on what one understands that research program to have been); but until recently no one has seriously sought to refute Bortkiewicz's critique. Over the past decade, however, a number of scholars have attempted to argue that Bortkiewicz's critique is unfounded, and is in fact directed at a caricature of Marx's argument. This argument is grounded in a claim that Marx rejected the notion that market processes cause prices and the profit to gravitate toward long-period normal positions, i.e. that Marx sought to explain not long-period positions of central gravitation, but a temporal sequence of market prices. This approach refutes the view that Marx was carrying forward a theoretical project that was initiated by Adam Smith and David Ricardo and later clarified and refined in the twentieth century by Piero Sraffa is in fact the real target of the non-equilibrium Marxism approach. The aim of my project is to critique this approach from three angles: first, to show that the interpretation of Marx upon which it is grounded is simply wrong, and that Marx did in fact make an error (albeit a non-fatal and understandable one) in his discussion of the transformation problem; second, to expose the methodological weakness of the non-equilibrium approach advocated by these scholars; and third, to present a theoretical critique of this non-equilibrium approach.

Alejandro Ramos-Martinez New Evidence on Marx's Concepts of Cost-price, Value, and Production Price

Francisco Paolo Cipolla

Interest Rate Changes in Marx's Theory of the Industrial Cycle Marx's view on the movements of the rate of interest along the economic cycle can be summarised into three phases. The first one in which reproduction credit is ensured by capitalists themselves with litle need for bank supply of money. In this phase the supply of money on the part of the banks is a mere metamorphosis of bank capital from the form of money into bank capital in the form of bills of exchange. This metamorphosis alters only the relative magnitudes into which bank capital resolves itself. A second phase develops in which there arises a demanda for credit which relies on bank's own capital since it is a demand for new capital and therefore carries no collateral in the form of bills. During this phase, the rate of interest rises to its average level. And finally, a third phase in which due to an interruption in the normal course of commercial credit among capitalists, there is a sudden and accute demand for money as means of payment. The rate of interest climbs to its highest level. Marx's conception of the changing levels of the rate of interest depends crucially on the definition of bank'capital and its component parts. This is so because it is the changing interconnection of bank's capital to the process of reproduction which will determine the changes in the rate of interest. This aspect of Marx's theory has been largely neglected in the marxian literature dealing with credit, interst rates and crisis. Also of great importance and equally neglected in the marxian literature is the influence of the circulation of revenue, which Marx calls Circulation I, on the rate of interest along the industrial cycle. A reconstruction of Marx's theory of the changing levels of the rate of interest along the economic cycle is justifyied on the grounds that it has never been properly trested within the marxian literature. To my knowledge nobody has made explicit the connection of the changing levels of the interest rate either to the structure of bank capital nor to the role of revenue circulation in the credit system.

Richard J Torz

A Real Production Critique of Capital Asset Pricing The capital asset pricing model (hereafter denoted CAPM), one of the most famous models of asset valuation, is a one-factor model which argues that the primary determinant of asset values (for example, stock prices) is a risk premuim which depends upon the variability of an asset's rate of return relative to the variability of the rate of return in the market in general. However, the CAPM is derived only under several strict and unrealistic assumptions which make its applicability, as well as its theoretical underpinnings, rather weak at best. More seriously, though, the CAPM does not account for real production effects (for example, labor-management disputes) which potentially could affect, or at least influence, the model.

Daniel Villalobos Céspedes The Political Economy of Prices and Production Este trabajo sistematiza los criterios de Marx en su obra El Capital en torno a la formación de: a) los precios de costos b) la composición técnico/orgánica del capital c) los precios de producción y, por lo tanto, d) la tasa de ganancia y la tasa de inversión. Pero también incursiona en el campo del desarrollo de las fuerzas productivas del capital y consecuentemente en la productividad media del trabajo. Al desarrollar tales criterios de una manera desagregada, nos encontramos con la posibilidad de determinar endógenamente los niveles de individualidad que ellos implican; todo ello basado en argumentos propios del autor en mención. Se parte del supuesto de que cuando Marx refiere a los precios de costo, trata acerca de los precios de los medios de producción e insumos y fuerza de trabajo en el mercado, de modo tal que la cuestión del valor es siempre un supuesto suyo para destacar la necesidad de que dichos precios representen el valor justo de los mismos; que el trabajo pretérito y presente sean pagados por su valor, medido este por la cantidad de trabajo socialmente necesario para la producción de una mercancía, según el estadio de desarrollo de las fuerzas productivas. Dado este supuesto, se obtiene entonces la composición técnico/orgánica del capital como relación de precios de factores y, a la vez, una relación técnica determinada empíricamente por la ingeniería, de acuerdo al nivel del desarrollo tecnológico, para una rotación del capital fijo; considerado este en la forma de maquinaria y equipo. Con ello llegamos al criterio de insuficiencia del capital, el cual destaca las preocupaciones del Marx en torno a la cantidad insuficiente del número de medios de producción y al grado de explotación no óptima de los existentes. Se demuestra como estos elementos están extrechamente vinculados con los problemas de a) precios crecientes b) tendencias bajistas de la tasa de ganancia c) incremento en los niveles de desempleo d) disminución en la masa de ganancia social, y e) aumento de valor del coeficiente de composición técnico/orgánica del capital. El haber determinado un coeficiente de productividad media del trabajo, nos permitió encontrar la fórmula que indicaría la cantidad de producto medio de los factores activos de la producción, y esbozar con claridad los precios de costo y producción por unidad de producto. En cada avance del tema en cuestión han sido planteados ejercicios numéricos que muestran las tendencias mencionadas, evidenciando que el modelo sugerido por Marx es dinámico.

Dave Kristjanson

Marxian Price Dynamics: A Short-run Approach This paper illustrates how Marxian value categories can be used to analyse price adjustment processes in the short-run. Using a two industry, six producer example, the formation of market prices of production under conditions of excess and insufficient demand are illustrated. The affect of shifts in demand on the total value produced in a period and how that value is distributed within and across industries through exchange are then examined. Finally, it is shown how the market price of production can be used to analyze price adjustment processes in the short-run without encountering the inconsistencies of the long-run center of gravity approach. Etelberto Ortiz Cruz The Theory of Competition as a Step for the Construction of the Theory of Value The paper reviews the importance of the theory of competition for the full development of the theory of value. The approach is to consider the reach of different formulations: neoclassical, neoricardian and marxian; in the construction of the theory of prices. The notion of pricing is observed as limited for the purpose of the construction of the notion of value, though competition is essential for the theory of prices and value. The dynamic issues concern not just a path from values to prices. The real issue is about the way in which values and prices of production can effectivelly regulate a market economy. This is encompassed in the notion of reproduction prices.

Lenine Rojas Olivas

Value is the Mean of Price El valor global está determinado por el tiempo de trabajo socialmente necesario que una sociedad destina a la satisfacción de una de sus necesidades cuantitativamente determinada y no por el producto del tiempo de trabajo promedio para obtener un ejemplar de una mercancía multiplicado por el número de ejemplares que se produzcan. El valor promedio en consecuencia, es el resultado de dividir la suma de los precios a los que fueron comprados y vendidos los ejemplares individuales de la mercancía que se realizaron en el mercado, es decir, el precio promedio corriente en el mercado.

======================================

Global value is determined by the socially necessary labor time allowed by a society to satisfy one of their social needs quantitatively determined and not by the product of mean socially necessary labor time of one single exemplaire of a marchandise and the number of those exemplaires produced. Mean value, hence, is the quotient of the value addition of selling and buying prices of individual exemplaires realized in the market, i.e. the mean current market price.

Abelardo Mari-a Flores

The Rate of Profit in the Mexican Economy: 1950-93

This paper presents estimates of the rate of profit and related Marxian variables (the rate of surplus-value, the composition of capital, and the ratio of unproductive labor to productive labor) for the Mexican economy from 1950 to 1995. A better understanding of the recent trends of the rate of profit and its determinants is an important part of a comprehensive analysis of the causes of the Mexican economic crisis and of the likelihood of recovery. There have been several previous attempts to estimates these variables for the Mexican economy, but all these have suffered from one or more of the following defects: inadequate estimates of the capital stock; absence of Marx's distinction between productive labor and unproductive labor; absence of a distinction between the income of capitalist enterprises and the income of the "self-employed" ; lack of estimates of the Marxian determinants of the rate of profit which makes a complete analysis of the trends of the rate of profit impossible; and lack of estimates for the last 15 years. Among the questions addressed by this paper will be: Was there a significant decline in the rate of profit from 1950 to 1982, i.e. prior to the current economic crisis? Has there been a significant increase in the rate of profit from 1982 to the present, i.e. since the outbreak of the crisis? What has been the main causes of these trends, according to Marxian theory (that is, what have been the trends of the Marxian determinants of the rate of profit)? What are the likely future trends of the rate of profit and its Marxian determinants in the years ahead? The answer to this last question will determine to a large extent the possibility of a full and lasting recovery from the current economic crisis.

Alejandro Valle-Baeza The Mexican Crisis of 94-95: An Evaluation of Different Interpretations

Etelberto Ortiz Cruz

Private Debt and the Financial Crisis in Mexico For over a decade Mexico has tried to transform its economy, with the aim to develop a new economic model, a new productive organization that should lead to a more competitive structure into the international economy. Nevertheless, the 1995 crisis has questioned that project. Though the views of criticism diverge, generally tend to conform arround two alternative hypothesis: 1Either this is a financial crisis that developed out of a mis-conception of the financial model, particularly from the exchange rate and external financing policies. or 2The current crisis reveals not just a short run financial difficulty, but a fundamental short-coming of the model and policies adopted for structural change. Under the first hypothesis, it is possible to criticize the financial strategy from 1992 to 1994, particularly the use of the rate of exchange as an "anchor" for the level of prices, but no question is posed on the basic growth model. The second hypothesis may well be inclusive of the criticism of the exchange rates policies adopted, but states that the basic problem was engender from the pattern followed to produce structural change, on the basis of a new relationship with the world economy, particularly with the U.S. economy through NAFTA. Therefore, under the second hypothesis, criticism may not necessarily be directed to the need to induce a fundamental change in the productive structure, but to the particular model adopted to induce structural change and the pattern of adjustment followed. This article seeks to sustain the second hypothesis in the following way: The first stance is to show that the pattern of growth rested heavily on an overvalued rate of exchange, with the aim to encourage growth in a few selected sectors, based on a privileged condition in respect to the rate of exchange. The main result of that policy has been to produce what we have labelled a "new dual economy", that shall be characterized. The pattern of growth has been unable to produce a real "export lead growth", in so far the leading exporting sectors are not capable to excert a positive effect on the rest of the economy. A second step shows thae extent of the transfers that the leading growth sectors are receiving from the rest of the economy. This fact questions the very nature of the actual model. That pattern developed a new external restriction on the public external debt: its growth was entirelly attributable to a private deficit, financed with public debt. A consideration is advanced on the relationship of growth with the finance of the "new model", particularly on the squeezing of domestic profits, and the permanence of unstability in the Mexican economy.

Fred Moseley The Rate of Profit in the Mexican Economy: 1950-93 This paper presents estimates of the rate of profit and related Marxian variables (the rate of surplus-value, the composition of capital, and the ratio of unproductive labor to productive labor) for the Mexican economy from 1950 to 1995. A better understanding of the recent trends of the rate of profit and its determinants is an important part of a comprehensive analysis of the causes of the Mexican economic crisis and of the likelihood of recovery. There have been several previous attempts to estimates these variables for the Mexican economy, but all these have suffered from one or more of the following defects: inadequate estimates of the capital stock; absence of Marx's distinction between productive labor and unproductive labor; absence of a distinction between the income of capitalist enterprises and the income of the "self-employed" ; lack of estimates of the Marxian determinants of the rate of profit which makes a complete analysis of the trends of the rate of profit impossible; and lack of estimates for the last 15 years. Among the questions addressed by this paper will be: Was there a significant decline in the rate of profit from 1950 to 1982, i.e. prior to the current economic crisis? Has there been a significant increase in the rate of profit from 1982 to the present, i.e. since the outbreak of the crisis? What has been the main causes of these trends, according to Marxian theory (that is, what have been the trends of the Marxian determinants of the rate of profit)? What are the likely future trends of the rate of profit and its Marxian determinants in the years ahead? The answer to this last question will determine to a large extent the possibility of a full and lasting recovery from the current economic crisis. Paul Cooney The Impact of the Mexican Crisis of 94-95 on the Maquiladora Industry Despite all the warning signs, the world of finance was caught off guard with the collapse of the Mexican peso in December 1994. The ensuing devaluation was followed by the largest bail out by the IMF until then, and by early 1995 Mexico was in its most serious depression since the 1930s. Through 1995 and 1996, Mexico endured significant negative rates of growth, and waves of bankruptcies. In addition, the population experienced a decline of real wages by more than 40% during 1995 alone. This led to a significant increase in poverty: reaching close to 50% of the population, and one fifth was enduring extreme poverty. In addition to the impact on the working class and peasants of Mexico, local manufacturing was severely affected, as evidenced by the increase of bankruptcies in the manufacturing sector. In stark contrast to the -6% growth rate for the overall Mexican economy, the maquiladora industry expanded by 30% in 1995. In fact it grew from 2200 plants with 550,000 workers at the end of 1994, to over 3000 plants employing over 800,000 workers in 1996. This paper will examine the impact of the peso crisis and the subsequent depression in Mexico, and analyze how the maquiladora industry was able to flourish while much of domestic manufacturing in Mexico was in crisis. Several different factors could be pointed to as causes of the peso crisis, but in general it is the result of an extended period of overspeculation, involving both domestic and foreign investors. Through 1994 there were several indicators suggesting a peso crash was imminent. Most significant was the decline of foreign exchange reserves, dropping from $26 billion early in 1994, down to a dangerously low $2 billion just before the US bailout. Secondly, almost 80% of the $85 billion invested in Mexico between 1991 and mid-1994, was in the form of portfolio investment, leaving only 20% in the form of direct investment. Thirdly, was the very clear and evident shift from the government bonds denominated in pesos (cetes) to those denominated in dollars (tesobonos) over many months. In order to back up first world investments and also given the importance of Mexico as a shining example of the success of neoliberal policies, when the peso crisis of 1994 hit, special efforts had to be made to prevent the Mexican economy from going into freefall. This justified the precedence of the $50 billion bailout which included the IMF's loan of $17.8 billion, more than twice the total it lent all countries in 1994. Of course this huge loan will have to be paid for by Mexicans though continued government cutbacks, increased taxes, and further reductions in wages. This is all in order to maintain a healthy investment environment as Mexico heads toward the 21st century after enduring its worse depression ever. As a result of the austerity brought about by monetarist policies, Mexico experienced a decline of real wages of 50% through the 1980s. The late eighties and early 1990s provided a brief respite. However, during the depression of 1995 Mexico lost a total of 1.85 million jobs and saw real wages decline again by over 40%. The consequences of neoliberal policies over the last 15 years for Mexico have been overwhelming, especially for the poor and working class of Mexico. Moreover, the "middle" class and petty bourgeoisie of Mexico have also been seriously impacted. For example, since NAFTA there have been more than 28,000 bankruptcies. Against the backdrop of the depression of 1995-96, the outstanding growth of the maquiladora industry seems remarkable. How can we explain why so many Mexican firms have faired poorly while the transnational corporations (TNCs) operating in Mexico have done so well? A comparison between the conditions in the Mexican manufacturing sector with those of the maquiladora sector is a necessary first step. Although they share a number of features and conditions - both operating in the national territory of Mexico and subject to many of the same laws - there are several crucial differences that need to be explored, particularly as we contrast the two sets of production conditions. First, the legal status of maquiladoras established in 1965 by the Border Industrialization Program must be considered, as well as any related changes that have come about because of NAFTA. The remaining factors can be placed in three broad groups: (1) market conditions, (2) plant conditions, and (3) state-related and institutional aspects. The principal factors related to market conditions are the different markets for selling goods, and the labor market. Factors that correspond to the second category of plant conditions include the length of the working day, productivity, intensity of labor, and labor organization. Lastly, are the factors that reflect the TNCs' relationships with the Mexican and US governments and other institutions such as the IMF. These include taxes, subsidies, repatriation of profits and royalties, enforcement or non-enforcement of labor and environmental laws. The most notable contrast is the different markets the two groups of firms are predominantly serving. Since Mexico was enduring a depression the demand for domestic goods declined substantially, however, since the maquiladora plants are producing predominantly for the US market they were minimally impacted by the decline in demand in Mexico. Perhaps the most significant impact of the peso crisis and devaluation for the maquiladora industry has been the reduction of wage costs. What remains to be explained however, is why this would not benefit all Mexican firms as well. After evaluating the peso crisis and depression of 1995-96 in Mexico, the specific impact on the maquiladora industry will be studied. Then, as outlined above, several sets of factors will be analyzed in order to explain the contrast in growth for the TNCs compared to Mexican firms. Undoubtedly, the particular relationship granted maquiladoras since 1965 and its current constellation under NAFTA will help to clarify key differences in the production conditions of the two sets of firms. Lastly, as an outcome of the analysis of the range of differences between TNCs and domestic producers it seems appropriate to begin to address a broader set of questions: Is the overall impact of the maquiladora industry positive for Mexico? And is it improving or exacerbating inequality and poverty in Mexico? References CEPALC, 1996. Mexico: La Industria Maquiladora. Economic Policy Institute et. al. 1997. "The Failed Experiment: NAFTA at Three Years." Henwood, Doug 1995. "The Contract with Mexico", Left Business Observer, No. 68. INEGI, 1997. Estadisticas Economicas: Industria Maquiladora de Exportaci(n, Feb. 97, Mexico. INEGI, 1996. Estadistica de la Industria Maquiladora de Exportaci(n 1990-1995, Mexico. Kopinak, Kathryn 1996. Desert Capitalism 'Maquiladoras in North America's Western Industrial Corridor'. The University of Arizona Press, Tucson. Multinational Monitor April 1995, "Social Dumping" in Mexico Under NAFTA. NACLA 1996. "Report on Latino Labor". New York. NACLA 1997. "Report on Mexico". New York. Otero, G. 1996. (ed.) Neoliberalism Revisited 'Economic Restructuring and Mexico's Political Future'. Westview Press, Colorado. Pe-a, Devon G. 1997. The Terror of the Machine Technology, Work, Gender & Ecology on the U.S.-Mexico Border. CMAS (Center for Mexican American Studies), University of Texas at Austin. Pradilla Cobos, Emilio. 1994. "Los Limites de la Industria Maquiladora Mexicana.", Economia: Teoria y Practica, Nro. 3, 1994. Shaiken, H. 1994. "Advanced Manufacturing in Mexico: A New International Division of Labor?" Latin American Research Review, 29(2): 39-72. Shaiken, H. 1990. Mexico in the Global Economy, "High Technology and Work Organization in Export Industries". Center for U.S.-Mexican Studies, Univ. of California, San Diego. Sklair, L.. 1993. Assembling for Development "The maquila industry in Mexico and the United States". Unwin Hyman, Inc., London.

Bruce Cronin Productive And Unproductive Capital: A Mapping Of The New Zealand System Of National Accounts To Classical Economic Categories, 1972-93

PRODUCTIVE AND UNPRODUCTIVE CAPITAL: A Mapping of the New Zealand System of National Accounts to Classical Economic Categories, 1972-93. New Zealand has received international attention for the extensiveness of the neo-liberal economic reform programme enacted from the mid-1980s, acting as a model for neo-liberal reform elsewhere. Within the neo-classical framework of the reformers, the programme has produced many improvements to the economy, evidenced by 'fundamental' indicators such as lower inflation, lower budget deficits and higher economic growth. There is a wide expectation that other economic indicators will also improve, after a lag. Yet these other indicators have not merely lagged, but are persistent; unemployment remains high, real wages are declining, real interest rates are among the highest in the world, nominal interest rates and business confidence fluctuate considerably, and the balance of payments is deteriorating. This paper reexamines the reform of the New Zealand economy from another viewpoint, using a classical framework, to see if there are alternative explanations for the persistence of this 'anomalous' phenomena. Methodology developed by Shaikh and Tonak is used to map official national accounts data to classical economic categories for the 1972 to 1993 period. This approach is compared to earlier New Zealand attempts at estimating classical economic categories. Lastly, this classical view of the economic reforms is compared to the conventional view. It is found that there was a large increase in unproductive economic activity associated with the economic reforms in New Zealand; that the improvement in 'economic fundamentals' emphasised by the reformers reflects this growth of unproductive activity; and that the persistence of other economic indicators is related to the ongoing weakness of productive activity.

Persefoni Tsaliki

Theories of Competition and the Notion of Regulating Capital in Greek Manufacturing Industries The objective of this paper is to evaluate empirically the relevance of the neoclassical, post-Keynesian, and classical theories of competition in the light of the available empirical evidence from 2-digit Greek large scale manufacturing industries. The econometric analysis from pooled data (of five years 1969, 1973, 1977, 1984, 1988) shows that the classical and post-Keynesian models provide a fairly good account of profit margin differentials, whereas the neoclassical performed the worst of the three. Between the classical and post-Keynesian models, the classical is more consistent with the phenomena that it is designed to explain. Before one continues to ecklectic type of models sellecting variables from the two competing theories in an efford to increase the explanatory power of the model, a final test is performed which refers to the long run characteristics of the economy and that is whether or not there is a tendential equalization of the interindustry profit rates. By resorting to the concept of regulating capital and rate of profit (and not the average capital and rate of profit), this paper shows that there is indeed a tendential equilazation of the profit rate in Greek manufacturing for the regulating capitals precisely the way is predicted by the Marxian theory. Rieu Dong-Min Reformulating the Quantitative Connection between Labor-Value and Price In this paper, I will examine the quantitative connection between labor-value and price. First, I will emphasize that labor-value and price are dimensionally different categories and this dimensionality problem includes the problem of reducing heterogeneous to homogeneous labor as its important part. Next, I will try to explain how the quantitative connection between labor-value and price can be secured through the value determination of labor-power adopted by the so-called 'New solution' to the transformation problem(Dumenil, 1980 : Foley, 1982 : Lipietz, 1982 etc.). Finally, by decomposing the widely-used concept called 'monetary expression of labor hour' into 'value expression of labor hour' and 'monetary expression of value', the implications of the labor theory of value will be reexamined from a new perspective. In particular, the weeknesses of the 'New solution' will be clarified.

Simon Mohun

Accounting for Value in the UK, 1948-96

Alan Freeman Towards a New Journal of Value Theory (These introductory comments, and the accompanying short piece on electronic publication, submitted by Alan Freeman): Over the five years of its existence, the IWGVT's mini-conferences have grown to be the largest single component of the Eastern Economic Association's Annual Conference, breaking radical new ground in the research presented and the debates engaged. This lively and growing interest in value theory, in the development of temporal approaches to value, and in the re-examination of Marx's thinking, finds little or no reflection in existing journals. In orthodox circles the general silence, not only on the work of Marx but more generally on value theory - once the predominant concern of theoretical economics - and on temporal approaches to economics, constitute in our view a part of the mounting evidence of substantive theoretical crisis in the economics profession and call clearly into question the claims of economics, as now practiced, to be treated as either scientific, scholarly or even merely liberal. There is an evident need for a genuinely pluralistic, scholarly medium for discussion and dissemination that can place this growing body of new work and re-appraisal in the hands of the general public, facilitate the free interchange of ideas between those interested, foster a collaborative dialogue between currents of thought concerned to develop temporal approaches to value, and promote a critique of, and engagement with, political economy in general. With the arrival of electronic dissemination a range of possibilities open up to combine non-suppressive publication with high standards of scholarship. The opportunity exists for a radical break not only in the content, but also the form, of publication. The purpose of this session is to start a deeper discussion amont those interested in such a publishing project, about its objectives and the means of achieving them.

Alejandro Ramos-Martinez Towards a New Journal of Value Theory (These introductory comments, and the accompanying short piece on electronic publication, submitted by Alan Freeman): Over the five years of its existence, the IWGVT's mini-conferences have grown to be the largest single component of the Eastern Economic Association's Annual Conference, breaking radical new ground in the research presented and the debates engaged. This lively and growing interest in value theory, in the development of temporal approaches to value, and in the re-examination of Marx's thinking, finds little or no reflection in existing journals. In orthodox circles the general silence, not only on the work of Marx but more generally on value theory - once the predominant concern of theoretical economics - and on temporal approaches to economics, constitute in our view a part of the mounting evidence of substantive theoretical crisis in the economics profession and call clearly into question the claims of economics, as now practiced, to be treated as either scientific, scholarly or even merely liberal. There is an evident need for a genuinely pluralistic, scholarly medium for discussion and dissemination that can place this growing body of new work and re-appraisal in the hands of the general public, facilitate the free interchange of ideas between those interested, foster a collaborative dialogue between currents of thought concerned to develop temporal approaches to value, and promote a critique of, and engagement with, political economy in general. With the arrival of electronic dissemination a range of possibilities open up to combine non-suppressive publication with high standards of scholarship. The opportunity exists for a radical break not only in the content, but also the form, of publication. The purpose of this session is to start a deeper discussion amont those interested in such a publishing project, about its objectives and the means of achieving them.

Andrew Kliman Towards a New Journal of Value Theory (These introductory comments, and the accompanying short piece on electronic publication, submitted by Alan Freeman): Over the five years of its existence, the IWGVT's mini-conferences have grown to be the largest single component of the Eastern Economic Association's Annual Conference, breaking radical new ground in the research presented and the debates engaged. This lively and growing interest in value theory, in the development of temporal approaches to value, and in the re-examination of Marx's thinking, finds little or no reflection in existing journals. In orthodox circles the general silence, not only on the work of Marx but more generally on value theory - once the predominant concern of theoretical economics - and on temporal approaches to economics, constitute in our view a part of the mounting evidence of substantive theoretical crisis in the economics profession and call clearly into question the claims of economics, as now practiced, to be treated as either scientific, scholarly or even merely liberal. There is an evident need for a genuinely pluralistic, scholarly medium for discussion and dissemination that can place this growing body of new work and re-appraisal in the hands of the general public, facilitate the free interchange of ideas between those interested, foster a collaborative dialogue between currents of thought concerned to develop temporal approaches to value, and promote a critique of, and engagement with, political economy in general. With the arrival of electronic dissemination a range of possibilities open up to combine non-suppressive publication with high standards of scholarship. The opportunity exists for a radical break not only in the content, but also the form, of publication. The purpose of this session is to start a deeper discussion amont those interested in such a publishing project, about its objectives and the means of achieving them.

Eduardo Maldonado-Filho Towards a New Journal of Value Theory (These introductory comments, and the accompanying short piece on electronic publication, submitted by Alan Freeman): Over the five years of its existence, the IWGVT's mini-conferences have grown to be the largest single component of the Eastern Economic Association's Annual Conference, breaking radical new ground in the research presented and the debates engaged. This lively and growing interest in value theory, in the development of temporal approaches to value, and in the re-examination of Marx's thinking, finds little or no reflection in existing journals. In orthodox circles the general silence, not only on the work of Marx but more generally on value theory - once the predominant concern of theoretical economics - and on temporal approaches to economics, constitute in our view a part of the mounting evidence of substantive theoretical crisis in the economics profession and call clearly into question the claims of economics, as now practiced, to be treated as either scientific, scholarly or even merely liberal. There is an evident need for a genuinely pluralistic, scholarly medium for discussion and dissemination that can place this growing body of new work and re-appraisal in the hands of the general public, facilitate the free interchange of ideas between those interested, foster a collaborative dialogue between currents of thought concerned to develop temporal approaches to value, and promote a critique of, and engagement with, political economy in general. With the arrival of electronic dissemination a range of possibilities open up to combine non-suppressive publication with high standards of scholarship. The opportunity exists for a radical break not only in the content, but also the form, of publication. The purpose of this session is to start a deeper discussion amont those interested in such a publishing project, about its objectives and the means of achieving them.

John Ernst Towards a New Journal of Value Theory

(These introductory comments, and the accompanying short piece on electronic publication, submitted by Alan Freeman): Over the five years of its existence, the IWGVT's mini-conferences have grown to be the largest single component of the Eastern Economic Association's Annual Conference, breaking radical new ground in the research presented and the debates engaged. This lively and growing interest in value theory, in the development of temporal approaches to value, and in the re-examination of Marx's thinking, finds little or no reflection in existing journals. In orthodox circles the general silence, not only on the work of Marx but more generally on value theory - once the predominant concern of theoretical economics - and on temporal approaches to economics, constitute in our view a part of the mounting evidence of substantive theoretical crisis in the economics profession and call clearly into question the claims of economics, as now practiced, to be treated as either scientific, scholarly or even merely liberal. There is an evident need for a genuinely pluralistic, scholarly medium for discussion and dissemination that can place this growing body of new work and re-appraisal in the hands of the general public, facilitate the free interchange of ideas between those interested, foster a collaborative dialogue between currents of thought concerned to develop temporal approaches to value, and promote a critique of, and engagement with, political economy in general. With the arrival of electronic dissemination a range of possibilities open up to combine non-suppressive publication with high standards of scholarship. The opportunity exists for a radical break not only in the content, but also the form, of publication. The purpose of this session is to start a deeper discussion amont those interested in such a publishing project, about its objectives and the means of achieving them.

Julian Wells

Towards a New Journal of Value Theory (These introductory comments, and the accompanying short piece on electronic publication, submitted by Alan Freeman): Over the five years of its existence, the IWGVT's mini-conferences have grown to be the largest single component of the Eastern Economic Association's Annual Conference, breaking radical new ground in the research presented and the debates engaged. This lively and growing interest in value theory, in the development of temporal approaches to value, and in the re-examination of Marx's thinking, finds little or no reflection in existing journals. In orthodox circles the general silence, not only on the work of Marx but more generally on value theory - once the predominant concern of theoretical economics - and on temporal approaches to economics, constitute in our view a part of the mounting evidence of substantive theoretical crisis in the economics profession and call clearly into question the claims of economics, as now practiced, to be treated as either scientific, scholarly or even merely liberal. There is an evident need for a genuinely pluralistic, scholarly medium for discussion and dissemination that can place this growing body of new work and re-appraisal in the hands of the general public, facilitate the free interchange of ideas between those interested, foster a collaborative dialogue between currents of thought concerned to develop temporal approaches to value, and promote a critique of, and engagement with, political economy in general. With the arrival of electronic dissemination a range of possibilities open up to combine non-suppressive publication with high standards of scholarship. The opportunity exists for a radical break not only in the content, but also the form, of publication. The purpose of this session is to start a deeper discussion amont those interested in such a publishing project, about its objectives and the means of achieving them.

Paolo Giussani Towards a New Journal of Value Theory

(These introductory comments, and the accompanying short piece on electronic publication, submitted by Alan Freeman): Over the five years of its existence, the IWGVT's mini-conferences have grown to be the largest single component of the Eastern Economic Association's Annual Conference, breaking radical new ground in the research presented and the debates engaged. This lively and growing interest in value theory, in the development of temporal approaches to value, and in the re-examination of Marx's thinking, finds little or no reflection in existing journals. In orthodox circles the general silence, not only on the work of Marx but more generally on value theory - once the predominant concern of theoretical economics - and on temporal approaches to economics, constitute in our view a part of the mounting evidence of substantive theoretical crisis in the economics profession and call clearly into question the claims of economics, as now practiced, to be treated as either scientific, scholarly or even merely liberal. There is an evident need for a genuinely pluralistic, scholarly medium for discussion and dissemination that can place this growing body of new work and re-appraisal in the hands of the general public, facilitate the free interchange of ideas between those interested, foster a collaborative dialogue between currents of thought concerned to develop temporal approaches to value, and promote a critique of, and engagement with, political economy in general. With the arrival of electronic dissemination a range of possibilities open up to combine non-suppressive publication with high standards of scholarship. The opportunity exists for a radical break not only in the content, but also the form, of publication. The purpose of this session is to start a deeper discussion amont those interested in such a publishing project, about its objectives and the means of achieving them.

Ted McGlone

Towards a New Journal of Value Theory (These introductory comments, and the accompanying short piece on electronic publication, submitted by Alan Freeman): Over the five years of its existence, the IWGVT's mini-conferences have grown to be the largest single component of the Eastern Economic Association's Annual Conference, breaking radical new ground in the research presented and the debates engaged. This lively and growing interest in value theory, in the development of temporal approaches to value, and in the re-examination of Marx's thinking, finds little or no reflection in existing journals. In orthodox circles the general silence, not only on the work of Marx but more generally on value theory - once the predominant concern of theoretical economics - and on temporal approaches to economics, constitute in our view a part of the mounting evidence of substantive theoretical crisis in the economics profession and call clearly into question the claims of economics, as now practiced, to be treated as either scientific, scholarly or even merely liberal. There is an evident need for a genuinely pluralistic, scholarly medium for discussion and dissemination that can place this growing body of new work and re-appraisal in the hands of the general public, facilitate the free interchange of ideas between those interested, foster a collaborative dialogue between currents of thought concerned to develop temporal approaches to value, and promote a critique of, and engagement with, political economy in general. With the arrival of electronic dissemination a range of possibilities open up to combine non-suppressive publication with high standards of scholarship. The opportunity exists for a radical break not only in the content, but also the form, of publication. The purpose of this session is to start a deeper discussion amont those interested in such a publishing project, about its objectives and the means of achieving them. David Laibman Cyclical Dynamics and Investment Crises: A New Look at Catastrophe Theory Peter Flaschel The Dynamics of 'Natural' Rates of Growth and Employment: Further Issues The paper investigates the dynamics of an integrated Keynesian disequilibrium model of monetary growth which allows for a variety of labor market and employment adjustment processes. The structure of the model is ``naturally'' nonlinear, i.e. no extrinsic nonlinear economic behavioral relationships are imposed at first. The dynamics of the model are 9 dimensional and are investigated analytically by considering appropriate subdynamics. The model generates limit cycles (via Hopf bifurcations) and more complex dynamic behavior (when a `natural' kink in the money wage Phillips curve is taken into account). It exhibits hysteresis effects with respect to long-run unemployment as well as growth and implies the occurrence of steady state depressions in particular.

Peter Hans Matthews Class-Driven Macrodynamics: An Evolutionary Perspective

Recent work (Sethi 1996, for example) in evolutionary game theory (EGT) has underscored the potential role(s) of "norms" and "meta-norms" (Axelrod 1986) as resolutions of the "commitment problems" characteristic of capitalist economies. Most of this research, however, has been limited to "single population models," which then prompts the obvious question: What, if anything, can EGT tell us about the role(s) of class norms/consciousness? This paper will consider this (and related) matter in the context of the familiar "extraction problem" (Bowles 1984) - that is, the conversion of "labor power" into "labor" - and some of its implications for class based macroeconomics.

Andrew Trigg The Role of Demand in the New and TSS Interpretations of the Transformation Problem

In recent years two main solutions have been put forward to the disputed transformation problem: the new solution, associated with Foley/Lipietz, and the new orthodox solution proposed by Kliman/Freeman/Carchedi, amongst others. Common to both these approaches are two main characteristics: (a) That the value of labour power is not equal to the amount of socially necessary labour time required to produce worker consumption goods; and, partly following from this, (b) That monetary measures of value can be used to calculate Marx's categories of surplus value, variable and constant constant capital. As a result, one of the claims made in favour of both approaches is that they are particularly suitable for the purposes of empirical work. In the paper proposed here, a possible problem with this claim is identified by examining the role of demand in relation to Marx's theory. In particular, the paper argues that assumption (a) above must be relaxed if value theory is to be used to model the demand side of the economy. A multiplier framework is proposed, which incorporates Marx's labour theory of value, and provides a tractable empirical framework for modelling demand.

Chai-on Lee Monetary Equilibrium in a Two-Sector Growth Model

In regard to Marx's expanded reproduction scheme, conditions for the sustained monetary equilibrium of two-sector growth model are examined. Both gold money and fiat money are respectively presupposed so that both monetary systems are shown equivalent in essential aspects. In either system, dichotomy is seen in simple reproduction scheme where money functions only as a means of exchange. Yet the dichotomy is broken in expanded reproduction scheme where money needs created additionally every period. When it is created being injected into the commodity circulation, money no more functions as the means of exchange. This is because the issuer of money does not sell goods or services but buys them unilaterally in any case. Once it ceases to function as means of exchange, the quantity theory of money no more holds. The dichotomy naturally breaks up. We shall explain this with Marx's concept of faux frais de production. The concept is realized in the deviation between the real value of commodities and the nominal value of the commodities. This deviation is reflected in another deviation between the purchasing-power of money (the so-called real value of money) and the nominal value of money, which is the original form of the classic inflation. The same, it shall be shown, can apply even to the fiat money system. Jean-Guy Loranger

The Determination of the Average Profit Rate in the Production Price Equation The aim of this paper is to demonstrate that, even if Marx's solution to the transformation problem can be modified, his basic conclusions remain valid. The proposed alternative solution which is presented here is based on the constraint of a common general profit rate in both spaces and a money wage level which will be determined simultaneously with prices. It will be demonstrated that the general average profit rate is entirely determined from the parameters of the linear structure of the model and the labor values alone. It will also demonstrated that its value is imposed as constraint in the determination of the production price vector. This solution diverges from the Dumenil-Foley-Lipietz solution on the assumption of the money wage rate which is assumed here as an endogeneous variable while the general profit rate is assumed exogeneous. The money wage level is determined by competition on the labor market. It is no more assumed to be fixed by the value of a subsistence basket, although it is still the case in the labor space. This is also quite different from the Morishima or the neo-ricardian solution, which has accepted the samuelsonian postulate of independence between the two spaces. The assumption of a real wage rate common to both spaces is replaced by the assumption of a common general profit rate already calculated in the labor value space. This solution is an alternative to Marx's solution because it fully transforms the cost of production and maintains the two macro constraints and a general profit rate between the monetary and the social spaces. Key words: Transformation, value, price, surplus value, profit, wage, capital, labor, equilibrium JEL classification: B-14, B-24, D-33, D-46, D-57, E-11, P-16. Julian Wells Probabilism and Determinism in Political Economy: the case of Engels and Bernstein

In a previous IWGVT paper (Wells 1997) I noted that various passing comments by Marx indicated that he entirely accepted a statistical approach to political economy. In this paper I examine in more detail the issues of chance and determinism in marxist political economy, with particular reference to the views of Engels and Bernstein. The latter presents his RrevisionS of Marxism as merely a scientific gloss on a too-vigorously expressed determinism in the work of Marx and Engels. It is argued that (i) BernsteinUs views rely on a determinism at least as rigid -- and vulgar -- as that which he claims to oppose (ii) Engels explicitly repudiates the notions about determinism and historical materialism expressed by Bernstein (iii) although the latter is clearly aware that providing a materialist account of free will is problematic, he does not go beyond hinting at its nature, and (iv) in part this is due to Engels not taking account of 19th century debates about the philosophical implications of probabilistic ideas.