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Bob Andrews wrote:

I'm with you Johnners. And well done Gnome. A delicious smorgasbord of everything that is wrong with the Socialist Party of Clapham and why, unless they apply for a drinks licence for number 52, they are doomed. Look at the history. The political emigrees of 1848 and 1871, after all the political hoo-ha died down, found themselves in drinking dens, boozing, playing cards, smoking, getting themselves recruited as police spies and having sterile political arguments until the emergence of socialist politics in the 1880's came along to spoil it all. We've had almost 130 years ( if you include Morris' Socialist League) of socialist propaganda that has produced nothing, since it is based on a number of false premises. What we need now are licenced premises ( with a nice big telly to watch the footy). As far as socialism is concerned it's: Time Gentlemen Please!

 I had somehow imagined you were a member or sympathiser of the Socialist Studies group , Bob Andrews, but it seems now that you are either a non-socialist, or even anti-socialist, cynic.  Thats OK but why dont you just come out and say it so we all know where you stand?

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alanjjohnstone wrote:

Is there any corresponding full moon economic theory?

 I think you would have to be a "lunar-tic" to propose such a thing

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robbo203 wrote:

 One way to test the theory would be to see if there is significant temporal correlation between sun spot events and economic events like crises.  Did Jevons ever do this or was it just speculation on his part that such a correlation  actually existed?

 Ah just spotted in your post , Adam, that Jevons did present such evidence but was the correlation "statistically significant"?

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ALB wrote:

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.

 To be fair, though, you could argue that the sunspot theory could serve as a "triggering" event that impacted upon capitalism/s tendency towards disproportionate growth which underlies the capitalist trade cycle.   So while on its own it cannot account for the trade cycle, it could be incorporated as part of a larger explanation.  So, for example, if good weather caused by changes in solar radiation resulted in a bumper harvest causing prices to drop,  this could have knock on consequences that exacerbate disproportionalities in the economy and so lead to crises. This is only in theory, mind you.  I suppose it would depend on how serious an impact changes in agricultural prices had on the economy.  Capitalism is capable of absorbing minor oscillations in prices without this resulting in crises – though, in the long run, the cumulative effect of these inter sectoral changes will assert itself in the form of the trade cycle. Specifically , in relation to sunspot theory, the impact would be mediated by others factors such as how much of an effect changes  solar radiation actually had on agricultural output itself – the argument that a change in quantity leads to a change a quality which implies there is some kind of threshold the former needs to reach before effecting qualitative change,  This in turn might depend on the kind of agricultural technology employed and whether it could use more of some kinds of inputs (e,g, articfical nitrogen fertilisers) to compensate for the decline of others.  It would also depend, I guess, on how important the agricultural sector is in the economy, generally. In a part of the world where agriculture comprises the majorty of paid empkyment, changes in incoming solar radiation could, in theory, I imagine have significant knock on economic repsercusions One way to test the theory would be to see if there is significant temporal correlation between sun spot events and economic events like crises.  Did Jevons ever do this or was it just speculation on his part that such a correlation  actually existed?

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  There is a related problem to do with the question of whether machines produce surplus value. We talk about the value of a product being determined in the long run by the amount of "socially necessary labour" it contains. This is not something that can be measured by a stopwatch so to speak, but constitutes a kind of "social average".  This is why labour intensive businesses using outmoded technologies cannot be said to produce more value than capital intensive businesses with high levels of labour productivity.    However, the value of a commodity depends on it being sold on the market.  No value is produced to the extent that there is an overproduction of commodities in relation to what the market can absorb and, of course, this makes the question of measuring "value" all the more problematic because we cannot know in advance whether a commodity that has been produced will actually be sold.  It is only in the process of exchange that value manifests itself so to speak.  It is then that the value of goods, the SNLT embodied in them, will express itself indirectly through the prices such goods command – which prices will tend to vary, in the long run, in accordance with the quantity of SNLT embodied in them.  In other words, the expression of value is mediated through money units – prices.  As Marx put it: "Social labour-time exists in these commodities in a latent state, so to speak, and becomes evident only in the course of their exchange…. Universal social labour is consequently not a ready-made prerequisite but an emerging result’ ( A Contribution to the Critique of Political Economy).  Indeed, it is for this very reason that Michel De Vroey has suggested that the creation of value seems to be located "not in production but at the articulation of production and circulation" ("Value, Production and Exchange" M de Vroey, The Value Controversy, NLB, London, 1981, p.173)  It is this kind of thinking that informs G A Cohen’s claim that the "relationship between the labour theory of value and the concept of exploitation is one of mutual irrelevance" (ibid, P202-223).  Cohen bases this claim on the argument that past labour – the amount of time actually spent on producing a commodity – is not strictly relevant as a guide to what is currently socially necessary labour time which is what constitutes that commodity's value in Marxian terms.   Since SNLT is itself a constantly shifting potentiality it cannot therefore be meaningfully be said to "embodied" in a commodity in the way that actual (past) labour may be said to be thus embodied (as in the case of the machine the worker is using to prpduce some product).  As mentioned earlier, what is socially necessary labour only becomes apparent a posteriori through market competition and is finally determined by conditions subsequent to the actual production of commodities themselves. Thus, commodities that cannot be sold do not possess value.    In effect, what that means is that workers in capitalism do not, and cannot logically, actually "produce" value as such and, hence, cannot be said to "produce" surplus value either.  What they produce are the commodities that contain value – a subtle but all-important difference.  It is because they, and not the capitalists, manifestly, produce what has value (rather than produce value as such) that the workers are exploited by the capitalists in the sense that the capitalists appropriate part of the value of what has been produced but without actually contributing to the production of what has been produced.  This, according to Cohen, makes the exploitation of the proletarian, "more similar to the exploitation of the serf than traditional Marxism says" (ibid p.222) Its an interesting argument.  Any thoughts?

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"Unless it changes, capitalism will starve humanity by 2050"   http://www.forbes.com/sites/drewhansen/2016/02/09/unless-it-changes-capitalism-will-starve-humanity-by-2050/#2296bf074a36Yet another example of the kind of deceitful "Trojan horse" strategy that, deliberately or otherwise, seeks to steer criticism away from capitalism by engaging in the rhetoric of anti-capitalism.  I despair when I read articles like this with its glib talk  of a "new generation of companies showing the way forward" and "infusing capitalism with fresh ideas".  Its just so much timewasting superficial BS.  Never mind how you get from the highly concentrated and increasingly concentrated and centralised pattern of ownership we have today to one in which we have distributed ownership – how is this going to alter the basics of capitalism and its driving force of capital accumulation or economic growth? There is a fundamental contradiction involved in attributing the  problem of environmental crises to capitalism and then proposing to tackle  these crises  while keeping capitalism intact albeit supposedly modified.  I notice that one of solutions proposed is that of "holacracy" which was being enthusiastically promoted on this forum not so long ago

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twc wrote:

Bortkiewicz recognised that Marx didn’t do this, and yet Sweezy accepts Bortkiewicz’s dual-system correction of Marx, thereby “improving” Marx against Marx, but in the name of Marx [Kliman p. 46].

 And yet Sweezy seems to go along with the labour theory of value in the article I mentioned….Could it be that 1) Sweezy changed his mind (is Kliman referring here to the view expressed by Sweezy in 1942 which may be different to what he wrote in 1980?)  or 2) Sweezy is unaware of the basic contradiction involved in adhering to a Marxian labour theory of value and adopting a simultaneist physical approach a la Sraffa?

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twc wrote:

 It is instructive to watch carefully as Kliman analyses the entrails of Dimtriev’s argument, and by extension subsequent physicalist [anti-value] “improvements” by Bortkiewicz, Sweezy, Sraffia, Samuelson, Steedman, Okishio, et tutti frutti.  Keen, as commentator, sits off in the salad bowl. 

 I am not so sure you can include Sweezy in this list.  He may have given publicity to Bortkiewicz's argument but I have just been reading his contribution in the book "The Value Controversy" (1981, ed Ian Steedman,  NLB)  in which he very clearly endorses the labour theory of value He argues (p.26) that an analysis of reality cannot effectively be made in terms of prices since this precludes what for him is a key variable in the hstory of capitalism – the rate of surplus value/exploitation  He regards the rate of profit as a secondary variable by comparison.  And contrary to Steedman, he argues that there are "general ways" to surmount the transformation problem – that is to get from the value/surplus value  prong in Steedman's diagram to the price/profit prong.  In other words, prices are ultimately regulated by, and explicable in terms of, labour values It is possible that Sweezy might have had a change of heart since 1942 when he wrote "Theory of Capitalist Development" – I havent read that book so I dont know what his position was  then on the LTV.  But in this article he seems to endorse it

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robbo203 wrote:

From Wikipedia Steve Keen[1] argues that "Essentially, Marx reached the result that the means of production cannot generate surplus value by confusing depreciation, or the loss of value by a machine, with value creation" . His argument is, that a machine can add a value to new output in excess of the value of economic depreciation charged[2] https://en.wikipedia.org/wiki/Constant_capital#Variable_capital

It seems to me that the confusion is Keen’s, not Marx’s, in this case.  He (Keen) maintains that machines add value to a product in excess of the value of the economic depreciation incurred.  But if that were the case then why might not pristine raw materials do the same?    But here’s the rub; pristine raw materials, by definition, don’t have labour time embodied in them – even if machines do – and if you argue that they contribute value to a product, then you are not defining value any more in terms of socially necessary labour time. You are employing a different definition of value and are thus not dealing with the Marxian theory on its own terms.  Unless you deal with the Marxian theory on its own terms and follow its inner logic to its own ultimate conclusion, you cannot claim to have refuted the theory.

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From Wikipedia Steve Keen[1] argues that "Essentially, Marx reached the result that the means of production cannot generate surplus value by confusing depreciation, or the loss of value by a machine, with value creation" . His argument is, that a machine can add a value to new output in excess of the value of economic depreciation charged[2] https://en.wikipedia.org/wiki/Constant_capital#Variable_capital

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Capitalist Pig wrote:

ah so you have an anarchist view. interestingI think there would need to be a constitution explaining everyones' rights pertaining to property, speech, privacy, y'know.by the way don't mean to be patronizing I am really curious to what you think

 You refer to everyone' rights pertaining to property.  It is important to understand what is meant by "property".  In its economic sense the term refers to "means of production".  It does not mean possessions In a socialist society there is common ownership of the means of production from which it axiomatically follows that there is no more economic exchange or exchange-related institutions such as wage labour, profits, markets , banks, tax departments  and so on. Logically, the "rights"  that  arise out of common ownership of the means of production are those of full and unrestricted free access to the products of industry.  The flip side of the coin of free access , is volunteer labour and the sense of obligation that goes with to contribute to society  according to your abilities.. Common ownership  however does not extend to possessions.  I have no more desire to share your toothbrush than you have, mine.

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twc wrote:

 .On the other hand, it is remotely possible that his Sraffian economy may treat pristine inputs in the same way as it treats all other inputs—as variable capital.Variable-capital inputs may continue to be productively consumed/used [even long] after they have reproduced their own maintenance cost.  Consequently, pristine raw materials (considered as variable capital) will always contribute toward profit since they take absolutely no time to reproduce their own [zero] maintenance.Again, you’d have to check if he treats them as such, i.e. as actual inputs, on equal par with machinery and possibly working animals.If he doesn’t you’d consider asking him why not, since these homeopathic inputs contribute miraculously to profit?

 As long as Keen treats machinery as variable capital, then whether or not he treats pristine raw materials as variable capital too, his theory will run into insurmountable conceptual problems.   This is why I mentioned pristine raw materials which are different from machinery inasmuch as the latter obviolusly has embodied labour content. Its a way of calling into question his treatment of machinery as varable capital

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twc wrote:

 In the Sraffian context, Keen raises the issue of machinery and animal labour as variable capital rather than constant capital.  Read Keen’s Debunking Economics. 

 How does he classify pristine raw materials in that case?

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Lew wrote:

robbo203 wrote:

His book Debunking Economics is a must-read (and I haven't read it yet)

 I have read it and it's a waste of time:http://www.worldsocialism.org/spgb/socialist-standard/2000s/2003/no-1182-february-2003/book-reviewsLew

 Lew, What I mean is it is a "must-read" if you are going to debate with the guy.  Its his main book, innit?  I can't comment on its worth, mind you , as I haven't read it but I am to at some point …..

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ALB wrote:

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?

 Hmm.  You might find a title like that for a debate a little too dry and abstract to attract any but the most hardened enthusiasts although I could be wrong.  Keen is quite well known in certain circles ,  I even have a work acquaintance here in Spain who installed my solar panel who is quite ..er.. keen on him (sorry, couldn't resist that). Maybe a more generalised title like "The Economics of Capitalism – is Marxism still relevant?  Just a thought. I would advise, though, to gem up on where he specifically stands within the spectrum of heterodox economic theory. I don't know enough about his writings to quite place him except to say that he regards himself as a post Keynesian sympathetic to some aspects of Marx's thought and critical of neoclassical economics. . His book Debunking Economics is a must-read (and I haven't read it yet) and of course there is ton of stuff you can get on the internet by googling Keen

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