Marx in volume II shows that capitalist equilibrium with growth is possible,
but that it is unlikely because of the co-ordination problems between the
sectors of the economy.
Arrow and Debreu using neo-classical modeling techniques show something
similar. That static equilibrium is possible. But that the conditions are so
onerous as to be unlikely.
Leontiev was correct to connect his research with Marx. There is a continuous
development of the input-output model from Quesnay to Marx to Leontiev,
although each of them put it to a different use than the others. Leontiev was
familiar with the efforts in the Soviet Union during the 1920s to develop a
model of the economy that could be used for planning purposes, and those
planners drew their inspiration from Marx.
Rational choice models has a long pre-history, they go back possibly to John
Duns Scottus and certainly to Marcellus of Padua. The Bernoulli's were involved
and Condilliac should also be consulted. Smith's contribution was actually
quite small on this particular question.
Rod
Jim Devine wrote:
>
> I think that a market environment encourages individualism, but the
> application of rat choice came first with Smith, not Marx. And Marx, unlike
> the rat choice types, saw "preferences" as endogenous. He also clearly
> rejected methodological individualism, though he saw that something like it
> was the ordinary consciousness of many people within the system, shaped,
> constrained, and mystified by commodity fetishism and the illusions created
> by competition.
>
>
> Leontief was wrong to credit Marx with this. Marx's volume II is a
> non-equilibrium system, while the equilibrium interpretation has hobbled
> Marxian political economy (showing up in absurd ways in the "transformation
> problem" lit, seen for example in Sweezy's THEORY OF CAPITALIST
> DEVELOPMENT). Marx did present "equilibrium conditions" for the
> proportional relationship between sectors, but he did not think equilibrium
> could be achieved easily. To the extent that equilibrium was achieved, it
> was the result of crisis, which involved _forcible_ equilibration, which
> was often quite destructive (small businesses going broke, working people
> losing their livelihood, etc.) Instead of seeing the results of his
> reproduction schemes as continually met -- as in input-output analysis --
> Marx saw them as regularly being broken and then violently reestablished.
> An extreme crisis --- like the Great Depression -- might require an extreme
> solution -- like World War II, though of course the solution's rise is not
> predetermined.
>
> I'm afraid that Leontief wanted to link Marx to his own research, which
> helped create IO theory. Back then, being associated with Marx was
> prestigious, at least in some circles.
>
> I think we should eschew them because they weren't Marx's accomplishments.
>
> Jim Devine [EMAIL PROTECTED] & http://bellarmine.lmu.edu/~JDevine
--
Rod Hay
[EMAIL PROTECTED]
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