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This article contains an outline of Jevons's thinking and argumentation on this point:http://www.economictheories.org/2008/08/jevons-sunspots-and-commercial-activity.htmlI particularly liked this quote from him:
Quote:If the planets govern the sun, and the sun governs the vintages and harvests, and thus the prices of food and raw materials and the state of the money market, it follows that the configurations of the planets may prove to be the remote causes of the greatest commercial disasters (Investigations, p. 185).Is this a theory of what causes sun spots too?
What was absurd about Jevons's sun-spot theory of crises was not that crises (economic downturns) cannot be caused by some natural event (some obviously have been) but that a natural event explained the regular boom/slump cycle. Here's how Jevons set out his theory in his textbook Political Economy (1878):
Quote:Good vintage years on the continent of Europe, and droughts in India, recur every ten or eleven years, and it seems probable that commercial crises are connected with a periodic variation of weather, affecting all parts of the earth, and probably arising from increased waves of heat received from the sun at average intervals of ten years and a fraction. A greater supply of heat increases the harvests, makes capital more abundant and trade more successful, and thus helps to create the hopefulness out of which a bubble arises. A falling off in the sun's heat makes bad harvests and deranges many enterprises in different parts of the world. This is likely to break the bubble and bring on a commercial collapse.As a statistician he was able to present figures showing some correlation between sun-spots and commercial crises, but this could surely serve as a classic case of the dictum that "correlation does not mean causation".The other objection to the theory is that it tries to explain the regularly recurring economic downturns that are a feature of capitalism by some event outside the system rather than by something inherent in the system itself.
At one time those who think that the exchange value of a product is determined by its "marginal utility" thought that utility could be measured in terms of some unit called perhaps a "util". They soon realised that this could not be done and now only argue that all that can be measured is whether or not one thing is more useful than something else:https://en.wikibooks.org/wiki/Principles_of_Economics/UtilityI'm not sure, though, how this helps them explain the different prices of different goods. I'd have thought it made it more difficult.
Yes, the man who thought that economic crises were caused by sunspots:http://www.worldsocialism.org/spgb/socialist-standard/2010s/2011/no-1280-april-2011/cooking-books-1don%E2%80%99t-ask-jevonshttp://www.economictheories.org/2008/08/jevons-sunspots-and-commercial-activity.html
There is something odd about this link as Terry Barrett died about ten years ago, so why is it being published now?. John Palmer, an IS original who would have known him personally, writing in 2009 said (scroll down to comment 4):
Quote:Terry was an exceptional militant and socialist – who received his political education by the way NOT in the CP but in the SPGB.We'll need to check in our archives to see whether he was actually a member or just a sympathiser.
Young Master Smeet wrote:(I wouldn't be surpised if some London planner is looking at pulling Ireland out of the EU to resolve the border question).Maybe but I don't think the Irish ruling class is going to accept that. The Republican tradition has always preferred to be dependent on Germany rather than Britain. Hence their support for Germany in both world wars and in 1978 the choice to join the European Monetary System breaking the 1 to 1 link between the Irish punt and the British pound, i.e in effect tying it to the DM. I can't see them going back on that.
The Turkish Army is having difficulty in capturing the ISIS provincial outpost of Al Bab in Syria:http://syriadirect.org/news/contrary-to-turkish-optimism-an-arduous-battle-against-a-%e2%80%98dug-in%e2%80%99-islamic-state-in-al-bab/Meanwhile here's what the "moderate" rebels recently booted out of eastern Aleppo are up to:http://syriadirect.org/news/when-islamic-police-raid-a-school-for-girls-to-examine-their-clothing-an-impromptu-protest-forces-them-to-release-the-arrested/
He's actually based in the Kingston University which falls within the area of West London branch, so we could contact him. What, a debate on "Is the Labour Theory of Value" valid?
Dave B wrote:I think computing software and associated paraphernalia is an interesting example as they are machines after a fashion and once created can be replicated for nothing.In that case they have nothing — no value — to transfer to the product. Robbo's quote from MacCulloch makes this point, as does Marx in this passage from Chapter 9 of Volume I:
Quote:If we look at the means of production, in their relation to the creation of value, and to the variation in the quantity of value, apart from anything else, they appear simply as the material in which labour-power, the value-creator, incorporates itself. Neither the nature, nor the value of this material is of any importance. The only requisite is that there be a sufficient supply to absorb the labour expended in the process of production. That supply once given, the material may rise or fall in value, or even be, as land and the sea, without any value in itself; but this will have no influence on the creation of value or on the variation in the quantity of value.robbo203 wrote:He would probably say that even with relatively labour intensive businesses, machines still add value to the product as opposed to simply transfer the value congealed in them over the lifetime of the machine.But does Keen actually say this? And does he say that it is only machines that add surplus value and not the other elements of Marx's constant capital (academic economics's "non-labour inputs")? If so, why does he exclude buildings, raw materials and power from creating surplus value too? Or does he accept the concept of "constant capital" but wants to narrow it to exclude machines? If so, again why?I'm a bit surprised that, as an academic economist even if one who wants to make a name for himself as a bit of an unorthpdox one, he has any use for the concept of "value" at all and doesn't want to try to analyse the capitalist economy in terms of price only.(which the so-called "transformation problem" is basically all about).
robbo203 wrote:I think the belief that they do is implicit in "Okishio's theorem" – the argument that investing in more machinery must raise profitability otherwise the capitalists wouldnt make such an investment from which it is inferred that machines must ipso facto produce surplus value.As I suspected, it seems that there is a confusion between the creation of (value and) surplus value and its realisation. Due to the averaging of the rate of profit, capitalist enterprises with relatively more fixed capital tend to capture more surplus value (from the pool of surplus value created by the working class as a whole) than is created in them — otherwise there'd be no incentive to invest in more up-to-date and productive machinery. But it is not the machinery itself that creates the surplus value.
What's wrong with Marx's own view as set out in Chapter 8 of Volume I of Capital on "Constant Capital and Variable Capital" where he explains why he describes capital invested in machinery, buildings, raw materials, etc as "constant" — because they only transfer the whole or a part of their value unchanged to the product.That machines transfer a part of their value is shared by accountants where the wear and tear of machines is counted as "depreciation", a transfer of their cost to the product which will needed to be replaced.It is also shared by national accounts statisticians with their concept of "value added" (their actual term). Here's their definition of Gross Value Added:
Quote:Gross value added is the value of output less the value of intermediate consumption; it is a measure of the contribution to GDP made by an individual producer, industry or sector; gross value added is the source from which the primary incomes of the SNA [System of National Accounts] are generated and is therefore carried forward into the primary distribution of income account. ( https://stats.oecd.org/glossary/detail.asp?ID=1184 )and of Net Value Added:
Quote:Net value added is the value of output less the values of both intermediate consumption and consumption of fixed capital ( https://stats.oecd.org/glossary/detail.asp?ID=176 )In other words, GVA less depreciation, though "consumption of fixed capital" conveys the meaning better. NVA is the nearest that can be got to Marxian s (surplus value) + v (variable capital)..So accountants and startisticians (also opposed to professors of bourgeois economics) accept that machinery, etc transfer a part of their value to the product. When this is excluded, what is left — net value added — is a measure of the new value created. Marxian economics says that this (which in fact is calculated as profits + wages) has been created by the exercise of productive labour-power (which the statisticians don't accept of course).What is Steve Keen's objection? Has it something to do with the averaging of the rate of profit meaning that constant capital "attracts" more profit than the value its transfers?
You must be thinking of Hal Draper and this 1962 article of his:https://www.marxists.org/archive/draper/1962/xx/dictprolet.html
