Last week, Nick Rogers replied in the Weekly Worker - Rooted In Capitalism – to my article Stuck In The Neo-Classical World. That in turn was a response to his earlier article, which reviewed Andrew Kliman's book, “The Failure of Capitalist Production”, and used some of its postulates to support Nick's view of the US and global economy. The Weekly Worker have kindly agreed to me writing another article responding to the points Nick raises. I have written that response, but the WW are taking their two week Summer break, and I am writing this blog post to expand on or deal with, those items there is not space in that article to cover, of which there are many. For several months now, I have been working on a comprehensive critique of Kliman's book, and the Temporal Single System Interpretation (TSSI) in general. That is having to take second place to my project of working through Marx's Capital. Consequently, neither here nor in my previous response to Nick is it intended to duplicate that. In fact, several months ago on Michael Roberts' blog I debated the deficiencies of the TSSI, directly with Kliman - Andrew Kliman and the Failure of Capitalist Production - so once again there is no point simply repeating those arguments. I would, however, recommend comrades to read that debate, because it is instructive on several levels. Rather, the intention in my earlier response to Nick, and here, is to deal with the arguments that Nick presents, and in the process to deal with those arguments on their own merits.
Most importantly, I want to begin by addressing the question of time. Hence the title of this post. In Note 4 of his response, Nick writes,
“I must admit that I fail to grasp Arthur’s point in his philosophical digression on the impossibility of fixing a single point in time. Surely Arthur does not believe that time is an irrelevance in Marxist political economy? What is volume 2 of Capital if not an extended treatise on the multitude of ways in which capital in its various manifestations interact over time?”
The whole point is that what I wrote was not a “philosophical digression”, but is central to the discussion over the TSSI, precisely for the reason Nick states! What I wrote in my original article was, in response to the claim by two TSSI theorists, Carchedi & De Haan. They wrote,
“In fact, given (t1-t2), the producer of A can sell it at t2at its transformed price and buy it at t1at its untransformed price only if t1and t2coincide: ie, only if time is abolished.”
(G Carchedi, W De Haan, ‘From production prices to reproduction prices’ Capital and Class autumn 1995.”
I argued that this perspective is syllogistic not dialectical.
“In this syllogistic view t1 and t2 are two distinct points in time - singularities - and t1 cannot be t2. However, t1 does not exist as a point in time, but itself has duration. No matter how infinitely small t1is made, it has a beginning and end. It is itself divisible into a t1 and t2.Consequently for any t1, it is logical from a dialectical perspective to have an input produced at the beginning of that period, also appearing as an output later during that period. t1is merely an artificial construct to overcome our inability to comprehend the infinite. So t1 can logically, from a dialectical perspective, as easily represent a period of six months as a millisecond. If t1 begins on January 1, and t2does not begin until July 1, who would deny, looking at the reality of capitalist production, that an output produced on January 1 is clearly capable of appearing as an input on January 2?”
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| Aristotle developed the syllogism A = A, and If A then not, not A. (-A) |
It is this point (no pun intended) that Nick cannot understand, but which is crucial. For a Marxist there is no such thing as a point in time, precisely because time is a continuum. Any point, be it of time or space, that exists in reality, i.e. in the material world, has dimension, that is it has size, a beginning and end, a start and finish. But, a point, in the sense that Carchedi and De Haan use it here, to argue that an output cannot also be an input, at the same point in time, has to be a point with zero dimension – otherwise an output produced at the beginning of that point, COULD be an input by the end of that point in time! However, the only point in time, that has zero dimension, is one that does not exist in the material world, it is one which is an abstraction from the real world i.e. one which exists purely in the realm of ideas. It is anti-dialectical and anti-materialist.
Trotsky deals with this in his demolition of the ideas of the Third Camp, as presented by Burnham and Schactman. Burnham explicitly rejected dialectics and Historical Materialism, and Shachtman as his attorney accepted that rejection, and put it into words. Trotsky focussed his attention on Shachtman, as the front man, in order to force Burnham out in the open, which he did with the publication of Burnham's - Science and Style.
Trotsky, wrote in A Petit-Bourgeois Opposition in The Socialist Workers Party,
“I will here attempt to sketch the substance of the problem in a very concise form. The Aristotelian logic of the simple syllogism starts from the proposition that “A” is equal to “A.” This postulate is accepted as an axiom for a multitude of practical human actions and elementary generalizations. But in reality “A” is not equal to “A.” This is easy to prove if we observe these two letters under a lens – they are quite different from each other. But, one can object, the question is not of the size or the form of the letters, since they are only symbols for equal quantities, for instance, a pound of sugar. The objection is beside the point; in reality a pound of sugar is never equal to a pound of sugar – a more delicate scale always discloses a difference. Again one can object: but a pound of sugar is equal to itself. Neither is this true – all bodies change uninterruptedly in size, weight, color, etc. They are never equal to themselves. A sophist will respond that a pound of sugar is equal to itself “at any given moment.” Aside from the extremely dubious practical value of this “axiom,” it does not withstand theoretical criticism either. How should we really conceive the word “moment”? If it is an infinitesimal interval of time, then a pound of sugar is subjected during the course of that “moment” to inevitable changes. Or is the “moment” a purely mathematical abstraction, that is, a zero of time? But everything exists in time; and existence itself is an uninterrupted process of transformation; time is consequently a fundamental element of existence. Thus the axiom “A” is equal to “A” signifies that a thing is equal to itself if it does not change, that is, if it does not exist...
Dialectical thinking is related to vulgar thinking in the same way that a motion picture is related to a still photograph. The motion picture does not outlaw the still photograph but combines a series of them according to the laws of motion...
We call our dialectic, materialist, since its roots are neither in heaven nor in the depths of our “free will,” but in objective reality, in nature.”
What Trotsky demonstrates is that not only were what he called “The Third Camp of the Petit-Bourgeoisie”, anti-Trotsky Trotskyists, but they were also anti-Marx Marxists! As Trotsky argues, it is possible with a false method still to arrive at correct conclusions, just as its is possible with the correct method to arrive at false conclusions. But, that is no reason to believe that method is not important! In fact, the debate over method and philosophy is far more important here than the conclusions, because it goes to the heart of the survival of Marxism. The position, the concept of time, adopted by the TSSI, is precisely that of Burnham and Shachtman criticised by Trotsky here. It is syllogistic and non-materialist. It treats time as though it were “a purely mathematical abstraction, that is, a zero of time”, as a “still photograph”, rather than a “motion picture”.
This may not be a coincidence. Several advocates of the Temporal Single System Interpretation (TSSI) have some kind of connection with the Third Camp. The acknowledgements on pp xii-iii, of Kliman's book referencing for example, “The Commune”, “International Socialism”, “Marxist-Humanist Initiative”, and “Workers Liberty”, are indicative of those links. Given that the philosophical basis of the Third Camp was provided by Burnham, it is not surprising then that its modern adherents methodology demonstrates the same kind of subjectivism and idealism. I'll refer to these links again later.
Why is this concept of time important? Because, a central plank of the TSSI is that outputs are not simultaneously – i.e. at the same point in time – inputs, and their prices are not simultaneously determined. That means that output prices are determined at one point in time, and input prices at a different point in time. For, the TSSI, what is important is money prices paid by individual capitalists, so even if, as Marx argues, the Values of outputs change between the point they were produced, and the point they enter as inputs into other commodities, the money advanced by the Capitalist has not changed. If the prices have risen, the capitalist will benefit, because the price of the final product will rise, if prices have fallen, the capitalist will similarly lose out. Moreover, when the capitalist considers the rate of profit, he will calculate it on the actual money he has laid out, not the actual Value of the Capital involved in the production process.
From the late 1970's until the mid 1990's I was a member of the Conference of Socialist Economists, and followed the development, and debate, on the TSSI, from its inception, with interest, mainly because it began as a discussion around the question of the so called “Transformation Problem”. That is the way Marx sets out, in Capital Vol. III, the process by which Exchange Values are transformed into Prices of Production at the level of Capital in General. Most of the discussion on the Transformation Problem, following on from Von Bortkiewitzc, adopted a mathematical model. That is the discussions sought to demonstrate that the supposed deficiencies in Marx's approach – he did not transform input prices simultaneously with output prices, and this according to the TSSI is supposed to be the logical deficiency, which their approach resolves – were solvable mathematically. (I should add here that the main debate in relation to the TSSI moved on to concern the so called Okishio Theorem, and a supposed contradiction it entails in relation to the Law of the Tendency for the Rate of Profit To Fall. LTRPF. I don't beleive this contradiction exists, nor do I beleive the LTRPF plays the central role in Marx's crisis theory that many have attributed to it. ) Various mathematical solutions such as that by Francis Seton were put forward to make this point, as well as Neo-Ricardian solutions such as that put forward by Pierro Sraffa. In the 1980's and 90's further such solutions were advanced, which divided essentially into the Sraffian model, most notably advanced by Ian Steedman, and the Marxian model advanced by a range of economists.
The latter solutions divided into those which took an iterative approach, that is they saw the resolution of the equations as being a matter of several intermediate stages or approximations, until a stable situation was arrived at, or those which adopted a simultaneous equation solution, whereby all prices were established in one process. I have always believed that the mathematical emphasis in these solutions is alien to Marx's method. Throughout, Capital, Marx provides a step by step analysis and explication grounded in historical reality. That is consistent with his Historical Materialist method, and with the dialectic.
There are also essentially two variants of the iterative approach. One is that of Anwar Shaikh, who put forward a mathematical solution, that arrives at a transformation of Exchange Values into Prices of Production within a single production cycle. So, there are only Prices of Production ruling in this model because Exchange Values are subsumed. The other is that which was put forward by Andrew Kliman and Ted McGlone, in their paper “The Transformation non-problem and the non-transformation problem”, in Capital & Class 35, Summer 1988. In it, they argue that Marx had not made an error in failing to transform input prices alongside output prices. The reason being essentially that set out above. That is, Output prices are transformed in one production cycle, and do not appear as inputs until the next production cycle. In the article, they write of the view that Marx was aware of the error of not transforming input prices but didn't have the time or tools to correct it,
“... it implies incompetence or even disingenuousness on Marx's part, since he relied on the specific conclusions of his transformation procedure to develop further his views of price of production and profit as forms of appearance of value and surplus value.” (Note2)
This seems an odd argument, because Marx knew from the beginning that commodities do not sell at their Exchange Values, but it did not stop him arguing up until he provides the solution for the Transformation Problem, towards the end of Vol III, as though they did. Capital was an unfinished piece of work, and so it is quite easy to accept that Marx's completed work, would have resolved this contradiction and brought it into alignment with the actual reality, just as he had done in his explication throughout Capital. Moreover, Marx and Engels clearly DID know that this contradiction existed, and hinted at its later resolution. So, for example Marx writes,
“The foregoing statements have at any rate modified the original assumption concerning the determination of the cost-price of commodities. We had originally assumed that the cost-price of a commodity equalled the value of the commodities consumed in its production. But for the buyer the price of production of a specific commodity is its cost-price, and may thus pass as cost-price into the prices of other commodities. Since the price of production may differ from the value of a commodity, it follows that the cost-price of a commodity containing this price of production of another commodity may also stand above or below that portion of its total value derived from the value of the means of production consumed by it. It is necessary to remember this modified significance of the cost-price, and to bear in mind that there is always the possibility of an error if the cost-price of a commodity in any particular sphere is identified with the value of the means of production consumed by it. Our present analysis does not necessitate a closer examination of this point.” (emphasis added
In other words they are stating openly the recognition that once you get to a situation where commodities are selling at prices of production rather than Exchange Values – and like everything else Marx has demonstrated in Capital, this is an historical development – then clearly where one commodity enters as an input into some other commodity, the relevant cost of that input is its transformed Exchange Value, not the exchange Value itself. The question is, what is the process by which this transformation of Exchange Values into Prices of Production occurs? I agree with Kliman and McGlone that this process has to be viewed historically, but that is about all, and again it comes back to the concept of time.
Kliman and McGlone put forward a 2 Dept. model (p 73) in the C&C article whereby output prices are transformed from Exchange Values in accordance with the model Marx sets out in Capital Vol. III. That is they derive a general rate of profit, and alter output prices so as to ensure that each Capital receives this same general rate of profit. They then use these output prices to form the basis of input prices in the next production cycle. The consequence then is that some Capitals will once again make above or below the average rate of profit. Output prices are modified again, so as to ensure each capital receives the average rate. After five iterations, a stable solution is arrived at with all Capitals making the average rate of profit, and no need for further modification of output prices.
But, there is an obvious flaw with this methodology. The reality of capitalist production is that Capital does not wait until the end of the production Cycle, typically a year, to calculate the average rate of profit, and does not then adjust prices so that each industry makes average profits. Capitalist production is like a “motion picture” not a “still photograph”. In other words, it is a continuous process, and the adjustment of prices, and reallocation of Capital, whereby that is achieved is happening minute by minute i.e. within the same moment of time viewed in terms of Capitalist production. But, there is a further problem with Kliman and McGlone's model. In it, they transform output prices, and then utilise these prices to Value Capital in the next cycle. But a little thought demonstrates that this is not possible.
Suppose we start at a position where commodities sell at their Exchange Values. At this point demand and supply for all commodities is in equilibrium. Now, Exchange Values are transformed. The price of commodity A, which forms a large element of Constant Capital, let's say Cotton, rises by 50% as a consequence. But, the consequence of this increase in price must be that demand and supply are no longer in balance for cotton. With the price now 50% higher demand will sink considerably, whilst the now higher prices will attract large amounts of additional Capital, increasing Supply!
As Marx comments,
“It would seem, then, that there is on the side of demand a certain magnitude of definite social wants which require for their satisfaction a definite quantity of a commodity on the market. But quantitatively, the definite social wants are very elastic and changing. Their fixedness is only apparent. If the means of subsistence were cheaper, or money-wages higher, the labourers would buy more of them, and a greater social need would arise for them, leaving aside the paupers, etc., whose demand is even below the narrowest limits of their physical wants. On the other hand, if cotton were cheaper, for example, the capitalists' demand for it would increase, more additional capital would be thrown into the cotton industry, etc.” (Capital Vol III p188)
Forward To Part 2
Forward To Part 2
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