My concern is not primarily to understand Marx, but to understand
what he himself was trying to understand - the realities of capitalism.
The assumption of an equal rate of profit was an attempt to approach
a closer to these realities than the assumptions made in Vol 1.
But in the end, I think that it takes us further away from the realities,
and that the theory in Vol I, is actually more realistic.
What is scientifically interesting is to discover why the law of value,
in its vol I form, holds.
Paul C.
_____________________________
I think our discussion on this issue is winding down. But our differences
remain as far apart as ever. As a year or may be a couple of years ago I had
mentioned that an economic theorist's interest in prices is not similar to the
interest of a merchant. A merchant is certainly interested in no other price
than the "real" price that his/her commodity would fetch. But the economic
theorist is not selling any commodity and his/her livelihood does not depend on
what prices happen to be in the market. So the question is why one would be
interested in prices? Different theories get interested in the question of
prices for different reasons. The neo-classical theory is primarily interested
in a theory of resource allocation, where market prices play the role of
allocating the resources. In Ricardo the problem was to determine the
distribution of income among three classes and the law of its changes. A theory
of prices was needed to homogenise the heterogeneous goods in such a way that
price theory remains independent of distribution. In Marx a theory of prices is
needed to insure the reproduction of the system, which intails realization of
the surplus. Thus prices occupy different places and significance in different
theoretical structure, and so are 'abstract' concepts. You seem to be interested
in market prices per se, without specifying why should anybody be interested in
prices?
In a separate message you go on to take cheap shot at Sraffians by suggesting
that Sraffian prices come out to be the worst estimate of real prices or
something like that. I'm sure, in the same vain many engineers could go on
discrediting quantum theory or theory of relativity or any other sophisticated
theory in physics because they don't apply well in the engineers' real world.
As you must know, when the reswitching debate was won by the Sraffians then
many mediocre neo-classical economists went arround collecting real world data
to show that in the real world reswitching did not occur. Then it was pointed
out to them that the marginal productivity theory was not a generalisation from
the observed phenomena but a logical deduction from certain neo-classical
premises. It simply didn't matter what the real world data said. And to my
knowledge, the leaders of the school such as Samuelson or Frank Hahn did not
pic-up on such devastating "real world" critique of Sraffa's reswitching.
Cheers, ajit sinha
