Heinrich's Intro to Capital

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Railyon
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Sep 13 2012 20:01
ocelot wrote:
But, overall, thank f*** for a marxism that is worthy of engaging with, even albeit critically, rather than the intellectual bankruptcy like the rotten old orthodoxy which is almost impossible to even find common ground to discuss anything with, so haunted is it by its religious obeisance to shibboleths like the FROP which have as much rationality as the mystery of the holy trinity.

Are you referring to the Grossman-style breakdown theories or those using the FROP to develop theories of cyclical industrial crises in the vein of Mattick, Müller, Krüger etc? (Heinrich seems to be highly critical of the breakdown stuff as well)

I'd agree the former is not really worth thinking about, but the latter is, in my opinion, pretty solid and stands on empirical foundations (and usually firmly grounded in marxian value theory). At least they're faring a lot better than underconsumptionist or disproportionalist stuff.

Wouldn't call it old orthodoxy so I don't know if that was what you were thinking of, though of course it is an orthodoxy among the political economist marxist camp; unsurprisingly most of them have shit politics but I guess that's a different topic altogether...

mikus
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Sep 13 2012 20:09

The "orthodoxy" of Grossman's account of crises would sure have been news to Grossman, who was outcast from the Marxist world largely because of that book. And I don't know why you (Ocelot) think he overfocused on Part III of Vol. 2. His whole argument comes from Vol. 3 of Capital. He did copy Bauer's reproduction tables, which indeed came from Vol. 2, but that wasn't really the focus of the argument. His focus was a reductio ad absurdum of of Bauer's claim that the capitalist system could reproduce itself indefinitely without crises.

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Sep 13 2012 21:23
Railyon wrote:
ocelot wrote:
But, overall, thank f*** for a marxism that is worthy of engaging with, even albeit critically, rather than the intellectual bankruptcy like the rotten old orthodoxy which is almost impossible to even find common ground to discuss anything with, so haunted is it by its religious obeisance to shibboleths like the FROP which have as much rationality as the mystery of the holy trinity.

Are you referring to the Grossman-style breakdown theories or those using the FROP to develop theories of cyclical industrial crises in the vein of Mattick, Müller, Krüger etc? (Heinrich seems to be highly critical of the breakdown stuff as well)

Ah. No, I meant as the deus ex machina that's going to bring about the final countdown breakdown. Of course all the true believers always insist that naturally they don't believe the TRPF really means that anything happens automatically and of course class struggle will be involved... usually just before they show you a big graph of the last 120/90/70 years with a downward sloping line just about to hit the x axis on the right-hand side, any day now... (I always have to suppress the urge to ask "are we nearly there yet?" in that little-kid-in-the-back-of-the-car voice).

But as a short or medium tendency contributing to periodic crises to re-establish profitability by forcing "market corrections" that write-down unsustainable capital, I don't have a particular problem with it. I think the epochal crises have more to do with the narrative of the development of the world market, but anyway...

andy g
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Sep 13 2012 21:31

you are right to question the idea that Grossman based his arguments on vol 2, mikus, but ocelot is surely only repeating a commonly held view on the under-appreciation of vol 2. I have been looking at Harvey's new seminars on vols 2 & 3 and he makes the same point. from personal experience before I actually read vol 2 I heard precious little about its content outside the Luxemburg v Bukharin spat on the economic basis of imperialism. but enough of that, wouldn't want to resurrect any rotting sacred cows...... wink

S. Artesian
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Sep 14 2012 00:00

Volume 1 as "vulgar Marxism" ? That's one I haven't heard before. It is the single volume that Marx did complete and see published in his lifetime. Would be interested in reading more about what constitutes the "vulgarity" in volume 1 itself, and how that vulgarity conflicts with a) what the versions of Vol 3 edited by others, present "non-vulgarly" and b) where the vulgarity conflicts with Economic Manuscripts 1857-1864.

And actually, the modern shibboleth these days is the tendency of calling the tendency of the ROP to fall a shibboleth.

So we have a version of Marxism that regards vol 1 as "vulgar," vol 2 as essentially of little value, and volume 3 as hamstrung by the "shibboleth" of the tendency of the ROP to decline. In its stead, we get a Marxism where there is no internal limit to valorization; no necessity, based on the organization of social production itself, for proletarian revolution, and a characterization of the international functioning of capital that is, to say the least, highly problematic.

Don't count too much on the rate of attrition aiding your "new orthodoxy." Sounds like a retread from the days of my youth, you know, when we had all those beatific spirits who were going to change the world just be living differently and outliving everyone else. Valorization took care of them, didn't it?

andy g
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Sep 14 2012 05:24

think you are misinterpreting ocelot's point, S Artesian. I think the idea is that each "marxism" rested on and emphasized a mis-reading of the respective volumes : "substantialist" theories of value based on a historical reading of vol 1 coupled with fatalism borne of the chapter on the historical tendency of capitalist accumulation; theories of collapse based on a naive reading of vol 3 etc. that's how I took it anyway....

am just in the process of reading Karl Marx and the Classics by John Milios (among others), someone regarded as a co-thinker of Heinrich, I think Angelus has said. Has the advantage of not being an intro so is more substantial in its presentation. Not made my mind up yet but an interesting read

Angelus linked Milios' website if anyone fancies a look

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Sep 14 2012 08:58
S. Artesian wrote:
Volume 1 as "vulgar Marxism" ? That's one I haven't heard before. It is the single volume that Marx did complete and see published in his lifetime. Would be interested in reading more about what constitutes the "vulgarity" in volume 1 itself, and how that vulgarity conflicts with a) what the versions of Vol 3 edited by others, present "non-vulgarly" and b) where the vulgarity conflicts with Economic Manuscripts 1857-1864.

No. The vulgarity is in the people who read volume1 and take it to be the whole of Marxism, in practice, if not in theory. That is, they argue as if commodities traded at their values, there was no prices of production or equalisation of the rate of profit, etc. The idea is hardly a new one (see David Harvey's lectures on Capital) so if you haven't heard it before it's not because it hasn't been part of the general discourse for a good while.

S. Artesian wrote:
And actually, the modern shibboleth these days is the tendency of calling the tendency of the ROP to fall a shibboleth.

Keep the faith! grin

S. Artesian wrote:
In its stead, we get a Marxism where there is no internal limit to valorization;

I waited to challenge this one until I had read the book completely. But as I suspected, your reading here is imo wrong, for the reasons already given by one of the posters above. The fact that capital accepts no limits to its boundless drive for self-valorisation is a feature that creates crisis, not one that averts it. Consider the original Bernsteinian heresy (against which all orthodox Krisentheorie was constructed) - his basic line was that Capital can contine to grow sustainably, delivering ever increasing material benefits to workers in the process (perhaps with the conditionality of organising a strong social-democratic party to assure w/c gains) - essentially the conventional, reformist and green programmes today. But what does "sustainability" actually mean? It means "within limits". That's precisely why recognising that the blind, impersonal drive of capital that takes on all limits as simply obstacles to be overcome (regardless of the non-monetary costs in human, envrionmental or social destruction), is to recognise the basic utopianism of any reformist programme for a "sustainable capitalism". You have it upside down.

S. Artesian wrote:
no necessity, based on the organization of social production itself, for proletarian revolution,

Depends how you understand "necessity". If you are referring to some realm of "objectivity" that trancends human need/desire, then for me your assertion makes no parseable sense. If OTOH you mean "necessary" relative to human desire for freedom, for life, etc, then we have no disagreement, other than the adviseability of using such ambigous language rather than relating revolution to human need explicitly.

S. Artesian wrote:
and a characterization of the international functioning of capital that is, to say the least, highly problematic.

Heinrich can only write an introduction to the 3 volumes of Capital that were actually produced. Given that Marx's work is essentially incomplete and the volumes on international trade and the world market and crisis were never written, then obviously any introduction to the first 3 volumes which don't deal properly with the international functioning of capital, is going to leave a certain lack in that department. Blame Marx for not finishing the job.

S. Artesian wrote:
Don't count too much on the rate of attrition aiding your "new orthodoxy." Sounds like a retread from the days of my youth, you know, when we had all those beatific spirits who were going to change the world just be living differently and outliving everyone else. Valorization took care of them, didn't it?

a) it's not "my" neo-orthodoxy - it's Heinrich's and his followers. I'm a libertarian communist, not a "Marxist" remember? b) I don't see the connection with utopianism, hippy or otherwise. Non sequiteur.

andy g
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Sep 14 2012 09:08

just to throw something out there....

I don't have a copy of the Intro in front of me but seem to remember that one of the areas I was bothered by was that on the "transformation problem". Accepting a monetary theory of value evidently impacts on how the value-price relationship is conceived. The two concepts operate on different levels of abstraction and any attempt to measure the difference between the two is mis-conceived since they are by definition incommensurable - if value can only ever be manifest and measurable as price there is no "distance" to measure. Milios argues that Marx's procedure in vol 3 where he introduces price of production and the general rate of profit is a regression from his disctinctive concept of value as a social relation of capitalist production to one of value as embodied labour. I understand there is a treatment of this in The Science of Value for all you German speakers!

Nowhere near through processing the implications of this - any thoughts?

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Sep 14 2012 11:24
ocelot wrote:
[...]

But as a short or medium tendency contributing to periodic crises to re-establish profitability by forcing "market corrections" that write-down unsustainable capital, I don't have a particular problem with it. I think the epochal crises have more to do with the narrative of the development of the world market, but anyway...

Well, I think it goes a bit deeper than that - essentially it's a manifestation of the 'fundamental contradictions between productive forces and production relations' (and thus the very crisis of the core determinations of capital - even if the FROP is not absolute, as in, irreversible, I think the cyclical crises are more than a mere tendency). Of course crises can also have other causes, wars for example (I think the cotton crisis in the states was an example of that, stemming from civil war?), but I think it's a vital tool in understanding the objective immanent limitations of capital, even if they 'resolve' themselves. Which in itself is an important point: that capitalism will not break down by itself. In that regard I'd go a bit further though and point to WWII and say, if capital can't (temporarily) self-correct itself through crises, it will do so through other means of devalorization - most infamously, war. Which of course does sound pretty messianic but I think it's not far off the mark...

But I digress. This is not about the FROP after all...

andy g
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Sep 14 2012 11:26

won't attempt to guess at what ocelot means by the "narrative of the development of the world market" but I share his misgivings about lots of presentations of the FROP.

I think FROP is attractive to many (including Marx) as it seems to tie the analysis of the capitalist mode of production to the theory of history. FROP is a uniquely capitalist expression of the contradiction between the forces and relations of production. Not necessarily problematic but a kind of self-confirming logic often kicks in : the general theory of historical materialism is correct; FROP is a particular instance of the dynamic HM posits; FROP is therefore true and denial of is tantamount to accepting capitalism in perpetuity. Critical scrutiny of the bases of FROP is somehow a sign of political opportunism of right deviation etc etc etc.

having said that FROP is hardly "mainstream" marxism any more as S Artesian points out

Angelus Novus
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Sep 14 2012 11:43
andy g wrote:
just to throw something out there....

I don't have a copy of the Intro in front of me but seem to remember that one of the areas I was bothered by was that on the "transformation problem". Accepting a monetary theory of value evidently impacts on how the value-price relationship is conceived. The two concepts operate on different levels of abstraction and any attempt to measure the difference between the two is mis-conceived since they are by definition incommensurable - if value can only ever be manifest and measurable as price there is no "distance" to measure.
[...]
Nowhere near through processing the implications of this - any thoughts?

That sounds about right. Why does it "bother" you? The idea of a transformation of value to production prices definitely implies that value can be measured independently of its phenomenal forms of manifestation.

BTW, one of the arguments of The Science of Value is that there are two discourses uneasily coexisting in Marx's mature economic work, a "classical" one and a "Marxian" one, and that Marx's break with classical political economy is incomplete and inconsistent. So the value-price transformation would be one of the Ricardian echoes according to this argument. There's a good talk by Heinrich kind of outlining this (not dealing specifically with the transformation problem though) available here.

Frankly I find this acknowledgment of inconsistencies in Marx's work far more honest than the patchwork attempts by the orthodoxy to hold onto the image of Marx The Infallible.

ocelot wrote:
In general I think it will, over time, become the basis for a new orthodox reading of Capital that will replace the old orthodoxy

Hah, well to be fair, the only place where it's managed to establish itself as something like an "orthodoxy" (I prefer "most commonly accepted consensus interpretation") is in Germany. Outside of Germany, value-form theory is still treated like a red-headed stepchild by Orthodox Marxists; pretty much the only people promoting an interest in value-form stuff, outside of a purely academic journal like Historical Materialism, are "libcommish" sort of journals like Endnotes and Aufheben, and guys like Bonefeld and Holloway. The book is selling very well, I'm told, but I'm not optimistic that any of the more orthodox Marxist journals will give it any kind of positive reception. I can recite in my sleep the litany of accusations that will appear in such outlets ("circulation theory of value", "rejection of the dialectic", "anti-Marxist", and, as S. Artesian has already given us a taste of, "denial of capitalism's instrinsic limits").

andy g
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Sep 14 2012 12:00

Yeah, that is the line Milios takes. I suppose the "bother" is that I felt that in the Intro one of the persistent disputes with Marxism appeared to be cursorily dismissed.

I'm still reading Milios at the mo - TBH I only dipped into it to read the section on fetishism for our discussion earlier and then went back to the beginning - and my thoughts aren't settled on the issue. I have no problem with acknowledging inconsistencies in Marx I'm just uncertain of the knock-on implications of an unfamiliar interpretation. How does Heinrich conceptualise the formation of an average rate of profit then, without the usual "value redistributuion through the price mechanism" that us ortho's have always pointed to?

andy g
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Sep 14 2012 12:02

sorry - should have said am at work in open-plan office so can't really listen to the talk you linked!

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Sep 14 2012 13:47
Angelus Novus wrote:
BTW, one of the arguments of The Science of Value is that there are two discourses uneasily coexisting in Marx's mature economic work, a "classical" one and a "Marxian" one, and that Marx's break with classical political economy is incomplete and inconsistent. So the value-price transformation would be one of the Ricardian echoes according to this argument. There's a good talk by Heinrich kind of outlining this (not dealing specifically with the transformation problem though) available here.

Frankly I find this acknowledgment of inconsistencies in Marx's work far more honest than the patchwork attempts by the orthodoxy to hold onto the image of Marx The Infallible.

Don't know whether I'd call that an inconsistency actually. I think Krüger makes the argument that the transformation problem is pretty much a non-problem, in the sense that it may not be a good tool for predicting the movements of capital, but that at the end of an industrial cycle these transformations and movements become empirically verifiable. I think this gels well with his conception of socially necessary labor time as being secondarily determined by actual valorization through the market (which means that socially necessary labor time is not only determined by competition by ways of increased productivity but also by an empirical post festum inquiry of actual sales: which objectified abstract labor actually counted as socially necessary - in short, only sold commodities count as socially necessary if I understood his point right)

He deals with the transformation problem in his Allgemeine Theorie but I haven't gotten to that part yet so I may be misrepresenting his argument.

Angelus Novus
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Sep 14 2012 14:08
Railyon wrote:
Don't know whether I'd call that an inconsistency actually. I think Krüger makes the argument that the transformation problem is pretty much a non-problem

I should emphasize, from Heinrich's perspective, the inconsistency does not arise from the fact that the "problem" is unsolved or that Marx does not succeed in solving it (this is basically the "inconsistency" argument that people like Kliman argue against); rather, the inconsistency consists in the fact that from the perspective of Marxian value theory, a quantitative "transformation" of value to price is meaningless. It presupposes there's a quantitatively measurable value "substance" that exists prior to its phenomenal manifestation in price. In other words, there is no transformation "problem" at all.

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I think this gels well with his conception of socially necessary labor time as being secondarily determined by actual valorization through the market (which means that socially necessary labor time is not only determined by competition by ways of increased productivity but also by an empirical post festum inquiry of actual sales: which objectified abstract labor actually counted as socially necessary - in short, only sold commodities count as socially necessary if I understood his point right)

Heinrich argues the same thing. In fact, he emphasizes that this aspect of socially necessary labor (that the commodity actually meets a monetary demand) is key, yet neglected in traditional orthodoxy.

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Sep 14 2012 14:09
andy g wrote:
How does Heinrich conceptualise the formation of an average rate of profit then, without the usual "value redistributuion through the price mechanism" that us ortho's have always pointed to?

I think you've got that backwards: It's the formation of an average rate of profit that explains the value redistribution, not the other way around.

andy g
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Sep 14 2012 14:19

hmmm.... (he says with a constipated expression on his face)

so, the argument goes like this, then (?):

as values are not determined independently of the actual process of exchange there can be no measurable "divergence" of price and value

there is therefore no need to argue about the redistribution of value between sectors of the economy as, by definition, commodities cannot exchange at anything other than their price, which is the form of appearance of their value

the transformation problem is then only a manifestation of the tension between monetary and pre-monetary theories of value that is found in Marx

the movement of capital between branches of production effects movements in price and results in the tendency towards a general rate of profit. the fall in prices in sectors from which capital has moved is itself a decrease in the value of the products of that sector, an increase that is not related to any change in productive technique. to equate decreased utilisation of concrete labour in a given production process with decreased commodity value is "substantialist" as their is no way of relating concrete to abstract labour except through price formation.

sorry to harp on - just trying to get things straight in my head....

andy g
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Sep 14 2012 14:29

cross of posts with Felix....... lightbulb may be flickering into life above my head...

or maybe not. accepted, wording of earlier post was dodgy. yes, it is formation of the ARP that effects the transformation of value into price of production in vol 3. from Heinrich's angle same objection surely applies - there can be no "transfer" of value from sector A where it is produced to sector B where it is realised as value has no existence other than through its expression as price..?

I suppose I find it counter-intuitive to talk about the value of a commodity varying when its technical conditions of production don't, simply by means of capital movement. as I'm writing this i can see how much of a dinosaur this makes me sound!

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Sep 14 2012 15:23
ocelot wrote:
No. The vulgarity is in the people who read volume1 and take it to be the whole of Marxism, in practice, if not in theory. That is, they argue as if commodities traded at their values, there was no prices of production or equalisation of the rate of profit, etc. The idea is hardly a new one (see David Harvey's lectures on Capital) so if you haven't heard it before it's not because it hasn't been part of the general discourse for a good while.

Fair enough.

Ocelot wrote:
Keep the faith! grin

Not a question of faith. It can be verified. It is a tendency. It explains why what occurs, occurs, and does it much better than underconsumption explanations, theories of disproportion, etc. TFROP is not a "death sentence" for capitalism. There is no rate of profit below which capital cannot survive, reconstitute itself. There is however no decline in the rate of profit that the bourgeoisie can afford to ignore.

S. Artesian wrote:
In its stead, we get a Marxism where there is no internal limit to valorization;

Ocelot wrote:
I waited to challenge this one until I had read the book completely. But as I suspected, your reading here is imo wrong, for the reasons already given by one of the posters above. The fact that capital accepts no limits to its boundless drive for self-valorisation is a feature that creates crisis, not one that averts it. Consider the original Bernsteinian heresy (against which all orthodox Krisentheorie was constructed) - his basic line was that Capital can contine to grow sustainably, delivering ever increasing material benefits to workers in the process (perhaps with the conditionality of organising a strong social-democratic party to assure w/c gains) - essentially the conventional, reformist and green programmes today. But what does "sustainability" actually mean? It means "within limits". That's precisely why recognising that the blind, impersonal drive of capital that takes on all limits as simply obstacles to be overcome (regardless of the non-monetary costs in human, envrionmental or social destruction), is to recognise the basic utopianism of any reformist programme for a "sustainable capitalism". You have it upside down.

Maybe, been wrong before. But I don't agree that I have it upside down. It is the fact that each completion of a circuit creates value, that value has no shelf-life without reengaging labor power yet again to accrete more value, means that the process of accumulation becomes the barrier to accumulation and drives capital ever onward in its need for.... accumulation. "Growing sustainably" "material benefits to workers" aren't the issues one way or the other. IMO, Heinrich uses an argument of specificity re Marx's analysis of crisis to discount the "general" theory of the intrinsic limits to valorization in Capital, and that general theory is overproduction.

Heinrich says [p 173]

Quote:
So capitalist production and capitalist consumption are not just differently determined. Rather their determining factors are downright antagonistic: a potentially unlimited production confronts a limited consumption (limited not in terms of human needs and desires but by the logic of valorization). The consequence is a tendency toward the overproduction of commodities (overproduction relative to buying power) and the over-accumulation of capital (accumulated capital that either cannot be valorized at all, or only very poorly), which ultimately leads to crisis:...

The problem here is that Heinrich first distinguishes the overproduction of commodities from the overproduction of capital, which jarred my my memory enough to recall Lenin's similar, and equally specious, distinction between the export of commodities, and the export of capital in Imperialism. Think about it, Marx starts with the commodity as the "cell," the "soul," the embodiment of capital; he shows that the production of and for value requires the organization of the means of production as values, as elements absorbing unpaid labor, as commodities, and yet somehow we're supposed to derive a distinction, a separation, in the overproduction of of commodities and the overproduction of capital.

I think if there's any "unified field theory aspect" to Marx's analysis of capital, and to overproduction which is the sin qua non of the intrinsic limits to valorization, it's the fact, or the moment, where the analysis of commodities as individual vectors, elements, gives way, to the all commodities as the "representatives" of capital.

Ocelot wrote:
S. Artesian wrote:
no necessity, based on the organization of social production itself, for proletarian revolution,

Depends how you understand "necessity". If you are referring to some realm of "objectivity" that trancends human need/desire, then for me your assertion makes no parseable sense. If OTOH you mean "necessary" relative to human desire for freedom, for life, etc, then we have no disagreement, other than the adviseability of using such ambigous language rather than relating revolution to human need explicitly.

Nothing in Capital transcends human need. It's all about the social expression, organization, mediation of human need, that need being at root the need of and for the labor process. There is no telos to history, but there certainly is a telos to human labor. However, once the mediation, that social mechanism of appropriation, it takes on a life of its own, like my favorite line from Frankenstein's Monster: "You are my creator, but I am your master. You must obey!"

So regardless of the desire for freedom, for life, we have a social appropriation of labor that creates, inherently, and repeatedly, obstacles to its own aggrandizement of that social labor. That's what Marx refers to, and repeatedly, and never abandons IMO, the conflict between means and relations of production. At core, in capitalism, it is the conflict between the labor process and the valorization process. It is expressed as declining profitability, overproduction.

Ocelot wrote:
S. Artesian wrote:
and a characterization of the international functioning of capital that is, to say the least, highly problematic.

Heinrich can only write an introduction to the 3 volumes of Capital that were actually produced. Given that Marx's work is essentially incomplete and the volumes on international trade and the world market and crisis were never written, then obviously any introduction to the first 3 volumes which don't deal properly with the international functioning of capital, is going to leave a certain lack in that department. Blame Marx for not finishing the job.

Come on, Heinrich's providing his own interpretation to support his own position. Like I said, nobody ever writes just an introduction to Marx. Everybody's got a horse in this race. I think Heinrich's "position" is.......spotty.

Ocelot wrote:
[ not "my" neo-orthodoxy - it's Heinrich's and his followers. I'm a libertarian communist, not a "Marxist" remember? b) I don't see the connection with utopianism, hippy or otherwise. Non sequiteur.

OK, libertarian communist. But don't count on people dying as weakening any of those aspects of Marxism, or Marxists, that you find vulgar or orthodox. Dying does not change those aspects, at least not enough. Reminds me of a friend of mine who argued that the collapse of the fSU had a benefit to the working class in that it "cleared" the field of the mythology of Stalinism as socialism. Doesn't work that way. The defeat to the workers of the fSU, the decline in living standards, the destruction of productive potential is a material condition that far outweighs any "ideological benefit." People dying doesn't change much, because usually it's the "wrong" people dying.

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Sep 14 2012 16:03
andy g wrote:
so, the argument goes like this, then (?):

as values are not determined independently of the actual process of exchange there can be no measurable "divergence" of price and value

there is therefore no need to argue about the redistribution of value between sectors of the economy as, by definition, commodities cannot exchange at anything other than their price, which is the form of appearance of their value

the transformation problem is then only a manifestation of the tension between monetary and pre-monetary theories of value that is found in Marx

Well, that's how Heinrich makes it appear in this brief treatment. On a technical level you could say the transformation problem could be seen as either Marx's erroneous maths, or, as Heinrich asserts, as his category error in mixing pre-monetarist conception of pre-circulation value as socially necessary labour time. (In passing, I'm actually still not 100% sure about the contention that because socially necessary labour time is only established a postieri through exchange, therefore it can't conceptually exist distinct from the sale price value at all, at any stage).

But on a more general level, imo, the transformation problem reflects the general problem of how the labour theory of value is compatible with the empirical inversion of the relation between local value composition of capital and local profitability. So I don't think it goes away quite so easily without an understanding of the actual mechanisms of the establishment of the ARP.

My problem with Heinrich's account (of the establishment of the ARP) is that it is very similar to (or just is) a conventional economics account of price equilibrium via supply and demand. My problems are two-fold. First of all the account is presented in the manner of conventional economics (i.e. as a "just so story"). But secondly, because no account is taken of how equalisation through the price mechanism and supply and demand affects the proportions of goods produced. Further that the mechanism for commensuration different capitals is presupposed, and thus rendered invisible to the process.

I note the latter in contrast to Bryan & Rafferty's assertion (in "Capitalism with Derivatives") that in fact in the period between the Bubble Act of 1720 to the Joint Stock Companies Act of 1844 - a period that corresponds roughly with the relative eclipse of mercantilism by the rise of industrial capitalism - that in fact no mechanism exists for the commensuration of the profits of different capitals, so that the ARP is a purely statistical concept at this stage, and in fact different companies actually are making different rates of profit. It's only with the (re)introduction of the stock market that the rates of profit between different capitals can be commensurated and capital can flow freely between them. Heinrich does touch on this when he mentions the need for a credit system for the flow of capital and the establishment of the ARP, but he doesn't differentiate between bank credit available to sole trader industrialists (or partnerships) in the early period, and the mechanism of equity investment in the post-1844 period. Also he makes no note of the potential for the valorisation of titular capital (what he refers to, in the orthodox, imo misleading, terminology of "ficticious capital") to be part of the mechanism for the establishment of the ARP. This is a lack imo.

Further, I can't help a lurking feeling that Heinrich's account may leave value theory slightly more open to Joan Robinson's "what's the point?" critique.

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Sep 14 2012 16:30
ocelot wrote:
Further, I can't help a lurking feeling that Heinrich's account may leave value theory slightly more open to Joan Robinson's "what's the point?" critique.

Exactly! My main problem with the particular line of the neue Marx-Lektüre represented by Heinrich is that it seems to completely omit the quantitative aspects of Marx's theory (strange, given that Heinrich is a trained mathematician). I think that it all boils down to the question: "Does (in theory) the sum of production prices equal the sum of values?" If the answer is "That is a meaningless question", then Marx's theory of value seems to be cut off from any empirical reference. Value becomes a purely instrumental concept at best, useful for analysis but without any objectivity.

I don't think it's true, as Angelus wrote above, that if you take Marx's brief account of the transformation seriously, you implicitly also say that values are measurable. Values of individual commodities are certainly not measurable, but that does not mean that value is without a quantitative dimension (albeit indeterminable in principle). And the "transformation" (which is not a mathematical operation but something which takes place in practice, just like the "transformation" of the value of labor power into wage) is the link between the quantitative dimension of value ("the magnitude of value", Wertgröße) and the production prices (which are, still, immeasurable and an abstraction used to explain market prices).

Angelus Novus
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Sep 14 2012 16:43
ocelot wrote:
Further, I can't help a lurking feeling that Heinrich's account may leave value theory slightly more open to Joan Robinson's "what's the point?" critique.

I think there's only a "what's the point" effect if one approaches it primarily as a theory of price. Then I'd agree, it would be largely superfluous.

If it's a theory of historically specific social relationships and the allocation of social labor, then it's not superfluous at all, though it's admittedly outside of what most (all?) economists would consider the legitimate purview of economics.

I think Freddy Perlman's introduction to Rubin's Essays offers the best response to the economistic approach to value.

mikus
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Sep 14 2012 16:45
ocelot wrote:
Further, I can't help a lurking feeling that Heinrich's account may leave value theory slightly more open to Joan Robinson's "what's the point?" critique.

Of course! If value can't be measured, or even discussed outside of its "appearance" as price, then why not just talk about price? The only reason seems to be so that we can return to some kind of vaguely Marx-influenced philosophy and gripe about how labor-time is "equalized" by prices, since prices differ only quantitatively. The fact that, say, the weights of commodities, the amount of carbon molecules contained therein, or how good of a mood the workers who produced the commodities in, are also "equalized" in this same way (since again, price distinguishes only quantitatively) seems to be lost on the "value is only measurable in price" people. The focus on labor being equalized is completely gratuitous.

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ocelot
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Sep 14 2012 16:46

Thanks Jura, that's definitely part of it. Just because something is not quantifiable at the level of the particulate or component, does not follow that its quantifiability at the aggregate or emergent level is equally indeterminate, or non-operative.

mikus
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Sep 14 2012 17:35
Angelus Novus wrote:
If it's a theory of historically specific social relationships and the allocation of social labor, then it's not superfluous at all, though it's admittedly outside of what most (all?) economists would consider the legitimate purview of economics.

How in the world can a theory which denies that the actual labor performed in the process of production determines values (and ultimately prices) be a theory of the allocation of social labor! When you guys talk about "labor," you aren't talking at all about the labor that really exists when real people perform it, but some kind of pure phantom which is the result of commodities being exchanged.

It'd be better to call it a theory of the allocation of social non-labor. Or perhaps a theory of the allocation of... nothing at all.

Angelus Novus
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Sep 14 2012 16:51
mikus
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Sep 14 2012 17:01

Again, the point is that though you use the word "labor", you're not talking about labor in the same sense as the rest of us at all. Assuming you're talking about anything at all (I'm still not convinced of this but that's another topic), you're talking about something that is completely different from, say, the actual activity that workers do (mining, producing t-shirts, sewing, waiting tables, whatever), and therefore has no actual relevance to the allocation of labor in that sense.

(And you do realize that the Fredy Perlman quote uses the dreaded "congealed" terminology, right?)

Angelus Novus
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Sep 14 2012 16:58
mikus wrote:
but some kind of pure phantom which is the result of commodities being exchanged.

Nope. I know this "circulation theory of value" is the favored canard of the orthodox, but it's just not true, and Heinrich deals with it adequately:

"even the question as to whether value and the magnitude of value are determined in the sphere of production or in the sphere of circulation (the sphere of buying and selling) is the result of a fatal reduction. Value isn't just "there" after being "produced" someplace. In the case of a bread roll, one can at least pose the question (even if the answer is somewhat obvious) as to where it comes into existence -- in the bakery or in the act of purchase over the sales counter. But value isn't a thing like the bread roll, but rather a social relationship that appears as a tangible characteristic of a thing. The social relationship that is expressed in value and the magnitude of value is constituted in production and circulation, so that the "either/or" question is senseless."

mikus
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Sep 14 2012 17:03

And that "social relationship" (fully) exists only after the product has been exchanged, correct?

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jura
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Sep 14 2012 17:01

Great quote, but the problem (and I think Perlman was aware of this, as was Rubin whom he translated) is that you cannot conclusively show how social labor is regulated by socially necessary labor time unless you also show the link between individual (enterprise-level) agency and SNLT. That link is 1. the establishment of the average rate of profit through mechanisms of competition (the drive towards extra profit or whatever is the proper English translation) and credit etc., 2. production prices, 3. market prices. Without the link, value does not explain social labor at all, it can at best be a hypothesis.

But there is no practical measurement of value (approximations at best, if we are to trust Fred Moseley et al.), and, on top of that, you have to (or at least you should, according o Marx) manage to explain social labor from 1. - 3. without presupposing what you want to explain. I'm not sure if Marx entirely succeeded in that step. Perhaps it can't really be done and we either have to lower the methodological standards or content ourselves with not having a full, polished explanation. (But I guess even a 93% theory of value is better than Samuelson.)