My response to Gil continues...
Gil:
>Ajit continues:
>
>>Gil Claims:
>>>the claim that "[i]ncomes are determined by...socio-historical
>>>factors (including class struggle" can be expressed with equal legitimacy in
>>>the Walrasian framework. Reason: in that framework, income distribution
>>>depends ultimately and primarily on the distribution of "endowments" of
>>>private property, which is exogenous, or to use Ajit's words, " determined
>>>from outside the market." So let us agree that such property endowments are
>>>determined by "socio-historical factors (including class struggle)" (as they
>>>surely are in real-world capitalism), and Ajit's claims about the
>>>determination of income distribution emerge with at least equal force from
>>>the Walrasian framework.
>>_________________
>>
>>One of the axioms of Arrow-Debreu model is that agents begin with initial
>>endowments, and these initial endowments are large enough so that the agents
>>could survive even if they could be deprived of all trading opportunities.
>>This is an essential axiom to the GE model, explicitly or implicitly,
>>because if it was not the case, then the agents would be *forced* to trade,
>>and the whole idea of trade as a voluntary activity cannot be upheld.
>
>I think this criticism is fundamentally misconceived, again for a number of
>reasons. To begin with, it is not true that the Arrow-Debreu framework
>includes any such axiom, and appropriately so, since the connection between
>endowments and the (in)voluntary status of trade is more tenuous than Ajit
>suggests. First, an individual may not be able to survive *either* on her
>endowment *or* on the market basket
________________
Ajit:
My guess is that Gil has not read Arrow-Deberue, all his bravado
notwithstanding. Let me quote from Arrow-Debreue's most influencial paper
'Existence of an Equilibrium for a Competitive Economy', Econometrica, 1954,
#22.
"II. The set of consumption vector Xi available to individual i (= 1,....,m)
is a closed convex subset of R(L) which is bounded from below, i.e., there
is a vector Ei such that Ei<(=) xi for all xi belonging to Xi.
The set Xi includes all consumption vectors among which the individual could
conceivably choose if there were no budgetary restrainsts. Impossible
combinations of commodities, such as the supplying of several types of labor
to a total amount of more than 24 hours a day or THE CONSUMPTION OF A BUNDLE
OF COMMODITIES INSUFFICIENT TO MAINTAIN LIFE, ARE REGARDED AS EXCLUDED FROM
Xi." (pp. 268-69).
So what do you say Gil? Isn't it a good idea to check the references before
saying other is wrong! wrong! wrong! all the time? This is an important
assumption, as I explained above. Without it the idea of voluntary exchange
cannot be maintain.
____________
Gil:
>this endowment enables her to purchase; thus the presence or absence of
>"force" is beside the point in this case. Second, "force" is unavoidably a
>matter of context (context which, of course, the Sraffian framework
>necessarily omits as well). On one hand, most people will not starve even
>if they fail to earn labor income for a week--even if that means they have
>to steal. On the other, someone may feel "forced" to enter the labor market
>to fund certain compulsive behaviors, even if all one's physiological needs
>are met. Third, and perhaps most to the point, there is no necessary
>contradiction between "utility-maximizing exchange" and "necessary
>exchange"--think of the latter as "utility-maximizing with an exclamation
>point"--and it is thus a distinction without a difference as far as the
>formal analysis goes.
____________________
Ajit:
Gil thinks that "stuff happens" is bad theory, but "exclamation mark" is a
good solution to a theoretical problem. Now, we can characterize laying as
standing with a note of exclamation! Note of exclamation is the hotest
formula for solving theoretical problem going folks! The point I have been
making is much too serious for a note of exclamation to solve it. Survival
is an INSTINCT which all life forms has including bacteria. Once you
incorporate the instinct to survival as "utility maximization", then the
whole concept becomes vacuous. Would you say bacterias are also "utility
maximizers"? Of course, not. Then human subjectivity must be separated from
sheer instinct for survival. And once you do that my critique comes back
with full force.
______________
Gil:
>
>>This is in total contradiction to capitalist reality where the proletariat
does
>>not have the initial endowments big enough for its survival. The so-called
>>exchange between the capital and labor is a *forced* exchange. Is the
>>Sraffian system built on such axiom too, Gil?
>
>This is another obvious case in which Ajit claims an advantage for the
>Sraffian system on the basis of what it leaves out, since the Sraffian
>framework says *nothing whatsoever* one way or another as to whether "the
>proletariat [has] initial endowments big enough for its survival." Of
>course, *exponents* of the system may *presume* the relevant condition in
>their analysis, but so can exponents of the Walrasian system. This has
>nothing whatsoever to do with the intrinsic properties of the competing
>frameworks.
__________________
Ajit:
The income categories in Sraffa are wages and profits, and not prices of
endowments. The wage labor, by definition cannot survive without getting in
a wage relation with the capitalist. The point is very simple, if you try to
understand it.
________
Gil:
>
>>Before, I get to Gil's weired critique, that the human beings are not
>>"automaton". Let me ask Gil one more question. This question came to my mind
>>only yesterday, and though it may turn out to be a stupid question I'm gonna
>>ask it anyway, since I'm at it, so why not. In the GE model, all exchanges
>>take place instantaneously. I wonder how a proletariat could exchange eight
>>hours of labor instantaneously? I think, it's gonna take eight hours to take
>>eight hours of labor from anybody.
>
>True. But as indicated above, the Sraffian framework addresses this problem
>solely by ignoring it. This omission is hardly the basis for claiming an
>advantage for the Sraffian system. On the other hand, by Ajit's own
>argument above, one could in fact account for time expended in production
>within the Walrasian framework, if that accounting were demanded by the
>problem being analyzed. To put it another way, it is not necessary to the
>Walrasian system that "all exchanges take place simultaneously." Obviously
>not, since there are explicitly intertemporal Walrasian models, as Ajit
>acknowledges above.
___________________
Ajit:
I think Gil is wrong on all counts here. First of all Sraffa's equations are
all production equations, and not exchange equations as in the GE case,
which has labor-time as an essential ingredeient in it. And the whole of
Sraffa's equations can be reduced to dated labor-terms, as Sraffa himself
did it in his chapter 6. Only someone who has not even seen Sraffa's book
can make this repeated claim that there is no time in Sraffa's equations.
Second, the time we are talking about in the intertemporal model is not the
time of production, but it is moment of time. A moment of time and a
duration of time are two different things altogether. For example, you will
get this post on your computer at certain time. Your computer will give you
exact time and date of the arrival of this post. However, it will not tell
you how much time it took to write this post. The Arrow-Debreu commodities
gives you the computer time. My question relates to the duration of time.
Now, why can't somebody understand this simple difference? Gil says that
time can be taken into account in the Walrasian framework without any
problem. So let me quote McKenzie here, and who could be a greater authority
on the GE theory than McKenzie?
"The next step in developing the general equilibrium of an economy is to
introduce production under the condition that the OUTPUT MATURES WITHOUT A
LAPSE OF TIME. This step was taken by Walras who introduced linear
activities which list the quantities of productive services required to
produce one unit of a good." ('General Equilibrium' in New Palgrave, pp. 3-4)
Arrow-Debreu model tries to get over Walras delima of production by
organizing production in small firms. Even mcKenzie thinks that "The
Arrow-Debreu approach to the production sector involves a major difficulty.
It is not well adapted to handle the formation of new firms and the
dissolution of old once." And as Garegnani has suggested, once you allow
time for production, then the A-D model in particular cannot assume that
input and output prices would be the same, creating serious problem with
their notion of equilibrium. Moreover, equilibrium in Arrow-Debreu model
comes about thorugh great mobility in firms output levels, which implies
shuting down of old or creation of new firms, and as McKenzie says above,
the model is not well equiped to deal with this situation. So the problem I
have raised is not that nonsensical, as Gil would like you to believe.
________________________
Gil:
>
>> My guess is that the answer would lie in
>>the divisibility assumption. However, no small amount of labor can be
>>"instantaneous".
>
>That guess would be incorrect. See above.
______________
Ajit:
And now, you see above.
________
Gil:
>
>> It is a commodity which is meaningless without a time dimention attached
>to it.
>
>I agree. Now please refer to Ajit's opening argument above, in which he
>states that "Arrow-Debreu commodities have many properties attached to them
>[unlike Sraffian commodities, presumably]. One of them is time." From this
>it is clear that, *on Ajit's own representation* his present argument favors
>the Walrasian over the Sraffian framework.
________________
Ajit:
As I explained above. A moment of time and a duration of time are two
different things. Moreover, Sraffian input and output prices do not diverge
because it takes the long-term view and deals with prices as the
grvitational points-they are different from market prices. The whole
Sraffian theoretical structure is rooted in time.
___________
Gil:
>
>> In general the GE framework has problem dealing
>>with time.
>
>Necessarily it has less of a problem than the Sraffian framework, which
>formally *ignores* time.
__________
Ajit:
Now, it must be quite clear how wrong Gil is on all these issues.
_________
Gil:
>
>>That's why it was easy to deal with zero savings case, because if
>>you have savings then the return on savings, ie. rate of interest, has
>>essentially a time dimention.
>
>Of course it does. That's why the Walrasian system is preferable to the
>Sraffian if only on descriptive grounds, since unlike the Sraffian approach
>it can incorporate markets which "essentially [have] a time dimension."
__________________
Ajit:
All this suggest only one thing. Gil does not understand the nature of time
in GE model.
_______
>
>> Hicks baled them out by creating the future
>>markets on this score. But how is it done for labor Gil? It is a question of
>>a student at this moment. But if you can't come up with a good answer, it
>>turns into a critique.
>
>For reasons given above, this can *only* turn into a critique of the
>Sraffian framework, which formally ignores the issue.
_____________
Ajit:
Is there any point in going on with this?
________
Gil:
>
>>Now to the automaton question: Gil's substantial critique of my point that
>>Sraffian theory is not rooted in human subjectivity is that equalization of
>>rate of profit and wages etc. come about through human action and therefore,
>>must be rooted in human subjectivity since humans are not automatons. I
>>think Gil has not thought through this issue well. Only ideoits could put
>>forward this notion that humans are automatons, since by definition human's
>>are not automatons.
>
>Happily, I'm not putting forward the notion that humans are automatons.
>Just the reverse: I'm saying that since humans are *not* automatons, the
>laws of capitalist competition must be expressed via self-conscious human
>actions. Thus there is no necessary sense in which the Arrow-Debreu model
>is at odds with Ajit's representation of capitalist competition.
_______________________
Ajit:
Here is an example of the whole nature of Gil's response. He has no patience
to hear my arguments. He is determined to close his eyes and swing his bat.
I never said, and you can read that, that Gil put forward the argument that
humans are automatons. On the contrary, I said that Gil put forward the
argument that since humans are NOT automatons, the human activities which
brings about the tendency for the equalization of profit must be rooted in
"self-conscious human actions". My argument below was designed to suggest
that this position tries to persuade the reader that this has to be beyond
dispute. However, it is a cleaver but illegitimate claim. The idea that
humans have 'free will', which we all find closely attached to, is quite
different and in contradiction to the neoclassical idea of a rational man
making self-conscious decissions in the best of his interest. I tried to
point out that this is nothing but an epistemological position, and as a
matter of fact for last about 40 years such humanist epistemological
positions are under severe attack. What is most surprising is that it is not
that Gil disagrees with let's say Foucault etc. but he completely fails to
even realize that there is an argument there which needs to be dealt with.
He says things like, "there we go where?".
____________
>
>> The point here is of serious epistimological
>>differences. When people find themselves attached to the idea that human
>>subjectivities matter, and our actions are dependent on our subjectivity,
>>they really are talking about "free will" with which they are closely
>>attached to, and they should, I, for one is sure. "free will" is the most
>>poetic idea we have and we should never give it up. However, there is no
>>theory of society or whatever that could be built on the idea of "free
>>will", because "free will" by definition opposes generality. Gil's own
>>theory, ie. the GE theory, rules out "free will" taut court. Human beings
>>are assumed to be *rational* that is utility maximizer. I'm not allowed to
>>not maximize my utility out of my free will. So what kind of freedom it
>>gives me, freedom of the sheep? So I have to behave in certain manner to
>>stay as an agent in Gil's economic world, no "free will" allowed here. So
>>what this "human subjectivity" is all about? It basically means that
>>theoreticians generalize about human nature and impose that human nature (as
>>axioms) on all of us, and then build an ahistorical theory, since "human
>>nature" is eternal- an ahistorical concept. Any theory rooted in human
>>nature then essentially be ahistorical--and so goes Marx out of the window,
>>taut court. People who consciously build their theory of society and social
>>reproduction by not rooting it in human subjectivity are showing the
>>consciousness of historicity of any theory. When peoples behavior and
>>actions that are rutine and essential for the reproduction of a given
>>society are explained by the forces generated by the logic of the social
>>relations itself, then it means human subjectivity is contextualized. It
>>does not mean that humans are not allowed free will. Of course, they have
>>free will. And they assert their free will when they smash the system.
>>Revolutions and rebellions are the manifestation and testimony to human free
>>will. But this can be allowed in a 'non-subjective' theory because the
>>system and the theoretical problem with which the theory is concerned with
>>is not rooted in human nature. What you can't have is a theory of
>>revolution, because a theory of revolution must necessarily generalize and
>>negate free will. So there you go!
___________________
Gil:
>
>There we go where? So far as I can tell the preceding long paragraph has
>absolutely nothing to do with anything I've argued. In particular, it has
>nothing whatsoever to do with the comparative features of the Walrasian and
>Sraffian frameworks, understood as distinct from the specific political
>economic concerns of their respective exponents.
____________
Ajit:
It has everything to do with your argument. You think that a superior theory
must explain human action from a subjective point of
view--"self-consciousness". I'm saying that a scientific, i.e. historical in
Althusserian sense, theory of society must explain the human actions that
sustains the reproduction of the society from within the structuralist
constraints of the society itself, and not from individual subjectivity.
This is the fundamental difference between your understanding of *history*
and mine. For you history is nothing but a clock time. A date will do for
the history of French Revolution, another date will do for the history of
Russian Revolution, etc. In my understanding of history, it is all about
contextualizing of an event. Marx's concept of mode of production or social
formation is nothing but a theoretical structure for contextualizing any
social event. That's why a GE-Marxism is an oximoron. My above brief speech
was also aimed at some humanist Marxists on the list.
If I have missed any of your "specific points", let me know. Cheers, ajit sinha
