All Value-Form, No Value-Substance: Comments on Moseley’s New Book, Part 6

by Andrew Kliman

Here is the sixth installment of “All Value-Form, No Value-Substance,” the series of comments I’m writing on Fred Moseley’s new book, Money and Totality: A Macro-Monetary Interpretation of Marx’s Logic in Capital and the End of the “Transformation Problem.” It responds to Moseley’s reply to the fifth installment. [Editor’s Note, July 26, 2016: This is the corrected version of the sixth installment, published today. The uncorrected version, published yesterday is available from MHI upon request.]

Here are the first installment, published on May 11,

the second installment, published on May 12,

the third installment, published on June 6,

the fourth installment, published on July 14, and

the fifth installment, published on July 23.

15 Comments

  1. Having two Top-Tier Marxist economists investing so much energy into this dispute is annoying. I don’t have the time to try to figure out which of you is actually right. But whichever one of you is able to change your mind by the greatest degree deserves the maximum respect. Judging by the language you two use to address each-other, and the time you’ve both now invested, your egos must be preventing that from happening. In a fantasy world, the two of you would release a joint statement clarifying the issue, with the lessons you have learned, and with the mistakes and pit-falls identified for the benefit of the rest us. You would then co-author a defense of the Law of the Tendency of the Rate of Profit to Fall. The one who most changed their mind would be the first author, of course.

  2. Dear Andrew Kliman

    I think you should put together all these installment making a paper more easily readable.

    Eleutério Prado

  3. James Coles,

    I’m sorry you’re annoyed, but my purpose here is to get to the truth, not to please an audience. It’s taking very long to get to the truth, for reasons that should be evident.

    Assume that the truth is not “somewhere in the middle,” but that one position is correct while the other is incorrect. Why should those who hold the correct position change their minds? And if they do change their minds, why should that deserve any respect?!

    You’re wrong about ego, at least in my case. As I said, my purpose is to get to the truth. To put it bluntly, I’m a truth fanatic; and the motives and drives of truth fanatics are poorly understood by others.

  4. Hi Eleutério,

    Good to hear from you. I like your suggestion of putting the installments together and publishing them. There’s much more thematic unity to them than I expected, because Fred Moseley is battling so hard to save his interpretation–everything except Part 2 is on a single theme.

    It would be good to publish the Moseley pieces, too. But I suppose that his permission would be needed, or at least that getting it would be good form.

  5. Andrew, I fully accept that one of you is right on this particular issue and that that truthful view should not be deviated from. I fully accept also that you feel your motive is to get to that truth, but I suspect that of Moseley too. I doubt either of you are capable of changing your minds on the issue, and that is my gripe. The way forward is for you both to understand that changing your minds is okay and is in fact highly commendable. If you, Andrew, are right and you seriously wanted to win Moseley to your truthful point of you on this particular issue, you would do well to allow him to save face (rather than to demand apologies, for example), and to enable him to come out of this dispute with more credit and respect than yourself.

  6. No, James, you really don’t know me well enough to doubt that I’m capable of changing my mind. And even if you knew me a lot better than you do, I suspect that you wouldn’t understand my motives well enough to draw such a conclusion. As I said before, “the motives and drives of truth fanatics are poorly understood by others.”

    The issue in dispute is whether Moseley’s equilibrium rate of profit is quantitatively identical to that of the (other) physicalists.

    FOR THE RECORD–if he could show that there’s a quantitative difference between them in the general case, I would certainly acknowledge that fact and retract my claim that the two rates of profit are quantitatively identical. That’s precisely what “changing my mind” would mean here.

    When I find that what I’ve said is factually incorrect, I’m not reluctant to change my mind. And I’m not reluctant to point out that I was incorrect before.

    1. This is what I wrote on p. xiv of my book “Reclaiming Marx’s ‘Capital'” (2007):

    “Ted McGlone … asked me to explain why Marx’s account of the transformation of values into prices of production was internally inconsistent. … I faithfully repeated what he and I had been taught––’Marx forgot to transform the input prices.’ McGlone asked why Marx needed to transform the input prices. I found that I could not satisfactorily explain why. So I urged him to just accept the fact––after all, everyone agreed that Marx had made an error, including Marxist economists such as our professors––and I noted that it didn’t make any difference, because the error had since been corrected.

    “Ah, but I was so much older then / I’m younger than that now.”

    The whole book, and a big chunk of my research over the last 3 decades, is a demonstration that I had been incorrect.

    2. Here’s what I wrote on pages 8-9 of “The Failure of Capitalist Production” (2012):

    “Prior to analyzing the data, I had no prior belief that actual rates of profit had failed to rebound since the early 1980s, and I even wrote that ‘profitability has been propped up by means of a decline in real wages for most [US] workers’ (Kliman 2009: 51), which I believed to be an unambiguous fact.”

    In the book, and in much of my research since then, I have shown that this belief is incorrect.

    3. Here’s what I wrote to the philosopher Paul Robert Wolff a couple of years ago, which you can find on p. 153 of “Is Marx’s Theory of Profit Right?: The Simultaneist-Temporalist Debate” (2015):

    “Last night, I finally guessed that you had a semi-positive vector of physical surpluses (or net outputs) in mind, so that when you specified that the surplus of X didn’t have to be positive, you didn’t mean that it could be negative. You meant only that it could be either positive or zero. That eliminates the apparent self-contradiction in your premises; I was wrong about that.”

  7. Okay, Andrew, but that doesn’t really repudiate my general point, as I suspect Moseley feels he is equally able to change his mind. So the last point in my previous post is what matters. “If you, Andrew, are right and you seriously wanted to win Moseley to your truthful point of you on this particular issue, you would do well to allow him to save face (rather than to demand apologies, for example), and to enable him to come out of this dispute with more credit and respect than yourself.”

  8. In my previous comment, I postulated labor-saving technological change: a reduction of labor in both sectors and holding constant the physical material inputs and the two outputs. So by assumption, the input-output coefficients a1 and a2 remain constant and b1 and b2 are reduced. With these assumptions, the Okishio theorem tells us that the Sraffian physical rate of profit *will never fall*.

    Kliman has instead calculated a different set of “input-output coefficients”; for example, a1 is calculated by dividing constant capital in Sector 1 by the new lower price of Good 1: a1 = C1 / P1. However, this calculation assumes that *Good 1 is an input to its own production* (in fact is the only non-material input to its production in Kliman’s two-sector model). Therefore, if the constant capital remains the same, then the quantity of Good 1 that could be purchased with this constant capital will increase and thus Kliman’s a1 increases – i.e. the quantity of Good 1 used as input to produce a unit of Good 1 as output supposedly increases.

    However, it is *almost never true in the real economy that a good is used as an input to produce itself* (except seeds in agriculture). Therefore, a reduction in the price of a good as output (due to labor-saving technological change) will in general *have no effect on the price of its inputs* (since it is not an input for itself) and will have no effect on the quantity of inputs purchased and used, and thus Kliman’s alternative calculation of a1 makes no sense.

    In other industries that use the cheaper good as an input, the constant capital advanced in those industries to purchase this cheaper input will decline correspondingly to the cheaper price. In Kliman’s example, C2 will decline proportional to p1 and thus
    a2 would remain the same, not increase: a2 = (C2/P2) (p2/p1).

    In any case, my main point is that *beyond this specific example*, the Okishio theorem establishes the general point that, according to Sraffian theory, labor-saving technological change will *never reduce* the rate of profit. And the reason for this non-negative effect of labor-saving technological change on the rate of profit in Sraffian theory, is that *labor is only a COST* in Sraffian theory, so that a reduction in cost will never reduce the rate of profit. On the other hand, in (my interpretation of) Marx’s theory, *labor is also a producer of value*, and therefore labor-saving technological change not only reduces costs, but also reduces the value and surplus-value produced, and therefore the net effect on the rate of profit depends on the relative strength of these two opposing intermediate effects.

    Therefore, in the general case, my interpretation of Marx’s theory comes to a different conclusion regarding the all-important question of the effect of labor-saving technological change on the rate of profit. The Okishio theorem does not apply to my interpretation of Marx’s theory. Labor is not only a cost, but is also a producer of value.

    In Kliman’s argument concerning “full automation”, he again calculates a1 = C1/P1. In this case, a1 = 10/10 = 1; that is, it takes one unit of Good 1 to produce a unit of Good 1, and thus there is no physical surplus. However, this argument is again based on the assumption that *Good 1 is an input to its own production* and thus makes no sense.

    In any case, my argument about full automation in my previous comments was not based on Kliman’s numerical example. It was based instead on the well-known general result in Sraffian theory that, if there is a physical surplus, then there will be a positive rate of profit, even though there is no labor (indeed the rate of profit will be a maximum) (see Steedman, “Robots and Capitalism”, New Left Review, 1985).

    On the other hand, according to my interpretation of Marx’s theory, the amount of profit depends on the amount of surplus labor (see Chapter 2 of my book for details), and in the case of full automation, labor and surplus labor = 0 and thus the amount and rate of profit are also = 0 (I discuss the case of full automation on pp. 234-36 of my book). Steedman himself emphasizes this difference between Sraffa’s theory and Marx’s theory as evidence that Marx’s theory is false. I argue the opposite conclusion in my book, but at least it is clear that these two theories are *different*.

    Kliman ignores my interpretation of Marx’s theory of the determination of profit by surplus labor and instead calculates “my” amount of profit in his Sector 1 by the equation:
    π1 = P1 – C1 – V1. And he assumes that C1 = (a1)(P1), a1 = 0.8, and V1 = 0, so that π1 = P1 – 0.8P1, which is of course positive, not = 0. But again the equation C1 = (a1)(P1) assumes that *Good 1 is an input to its own production* which is almost never the case.

    Therefore, Kliman’s about argument not only ignores my interpretation of Marx’s theory, but is also based on the unrealistic assumption that Good 1 is an input to its own production. In my interpretation, profit is determined by surplus labor and in the case of full automation there is no surplus labor and therefore no profit, contrary to Sraffa’s theory.

    Fred Moseley

  9. James, you’re moving the target. It’s hard to carry on a discussion like this.

    Earlier, you said “my gripe” is that “I doubt either of you are capable of changing your minds on the issue …. The way forward is for you both to understand that changing your minds is okay and is in fact highly commendable.”

    My reply and the evidence I provided should be sufficient to demonstrate that I’m capable of changing my mind and that I think it’s highly commendable–when warranted.

    But now, you ignore all that, except to say “Okay, Andrew, but ….” Now, your “general point” is different, and “what matters” is different.

    You are (or were) annoyed. Am I entitled to be annoyed, too? And am I entitled to be annoyed at Moseley’s continually moving target? Guess not.

    Now, “what matters” to you is “If you, Andrew, are right and you seriously wanted to win Moseley to your truthful point of you [view?] on this particular issue, you would do well to allow him to save face (rather than to demand apologies, for example), and to enable him to come out of this dispute with more credit and respect than yourself.”

    First, I could care less about winning Moseley over. My concern is to get to the truth. You and I are never going to see eye-to-eye here, because of that difference in orientation.

    Second, your phrase “truthful point of you [view?]” is very revealing of the same thing (persuasion orientation). You supposedly support truth, yet it’s just another point of view to you!

    Actually, there’s no such thing as a truthful point of view. (There are different points of view as to what’s true, but that’s another matter entirely). There are only truthful claims, statements, and so on.

    That’s quite relevant here because you seem to think either that I’m debating points of view with Moseley, or that the claims being made are somehow relative to a point of view. Not so. We’re debating what I said we are debating, “whether Moseley’s equilibrium rate of profit is quantitatively identical to that of the (other) physicalists.” There is just no room for points of view here. It’s either quantitatively identical or it isn’t.

    Third, I didn’t ask him to apologize, much less “demand” that he do so. I wrote, “Marxian economics means never having to say you’re sorry.” I was invoking a well-known catch phrase, for god’s sake: “Love means never having to say you’re sorry.” (You might not know it, but people of his generation and my generation remember it.) I guess I could have written “Marxian economics means never having to retract false claims,” but that would be like writing “Consider my spouse, if you will.” I think my meaning was clear enough to those who know the catch phrase.

    Fourth, I’m all for being respectful of various points of view, but since points of view aren’t at issue here, as I explained above, I frankly don’t know what the stuff about saving face is all about.

    Does saving face mean that false claims don’t get retracted? If so, I’m NEVER going to agree with you. What you’re proposing, if it’s indeed what you’re proposing, is a great threat to the progress of human thought and our ability to solve the problems we face. These things require unwavering commitment to truth (e.g., not allowing young-earth creationism or climate change denialism to be accepted, either as correct or as “points of view”).

    What kind of thinking regards retraction of false claims as a loss of face? Frege responded clearly and forthrightly to Russell’s paradox, stating correctly, in print, that it had shaken one of the foundations of his theoretical edifice. That wasn’t regarded as a loss of face. To the contrary, it was and continues to be recognized as THE model of scholarly integrity.

    So I have NO interest in Moseley losing face. I merely want him to retract his false claims. That’s what Russell wanted from Frege. That’s what Frege himself wanted. The problem here, to put it as mildly as I can, is that Moseley is not receptive to being shown that his claims are false or to retracting them.

  10. There are better and worse ways to encourage people to change their minds and to retract false claims. I think a good way is to assume that they also want to get to the truth, or at least to treat them as such, and perhaps not to accuse them of throwing spaghetti, for another example (I wasn’t familiar with the never having to apologize quote). I simply share your goal to persuade others to become truth-seekers, as you put it, so that more of the truth may then be uncovered.

  11. Also I’m no longer annoyed. I’m hopeful that you and Moseley converge on the truth about Marx’s Theory of the Rate of Profit to Fall..

  12. James Coles,

    “There are better and worse ways to encourage people to change their minds and to retract false claims. I think a good way is to assume that they also want to get to the truth, or at least to treat them as such ….”

    Gee, why didn’t I ever think of that?

    Actually, I did.

    Assuming that “they also want to get to the truth” and treating them as such is an excellent starting point, I agree. I agreed with it and behaved accordingly when I entered into this controversy 30 years ago. And I continued to do so 25 years ago, and 20 years ago, and ….

    But I’m perfectly capable of changing my mind in the face of very strong evidence that my belief is incorrect, as you know. So eventually, I had to accept that my assumption was incorrect.

    Other people are beginning to catch on, too. See the excellent review of a book I co-edited, just published in Marx & Philosophy Review of Books: http://marxandphilosophy.org.uk/reviewofbooks/reviews/2016/2389.

    I think that THIS kind of response–by disinterested people acting in good faith–is the only way forward. There need to be norms and rules of debate, and only disinterested people acting in good faith can ensure adherence to these norms and rules. I cannot.

  13. To James Coles:

    IMO, the worst part of your discussion in these comments was your initial attitude. Although you deny it, you implied that the truth must be somewhere in the middle of the two views (or maybe that truth is variable). As Kliman responds, only he or Moseley can be correct on these particular issues, which are not matters of opinion. You seem to reflect the po-mo view that all answers are equally good and we don’t need to seek the truth.

    The next worst part of your comments lies in your blaming Kliman for not being conciliatory, when he has been debating Moseley for years over these issues without any movement on Moseley’s part, just continual variations on points that have already been thoroughly rebutted. Then you say that it up to Kliman to figure out a way to let Moseley change his position while saving face. Please suggest how Moseley can change his position without repudiating his prior position, so that he can “save face.” If you can figure that out, I expect Kliman would be interested in trying it.

    The third worst thing you do is blame Kliman for being blunt and exasperated. Meanwhile, there are comments on the Marx and Philosophy book review site’s review of Moseley’s book http://marxandphilosophy.org.uk/reviewofbooks/reviews/2016/2375 that attack Kliman viciously, and you ought to criticize the author of those.

    But the saddest part of your comments is, “I don’t have the time to try to figure out which of you is actually right” (in your first comment). Yes, this is hard stuff and I’m sure you are a busy person, but that’s no excuse for allowing Marx to continue to be grossly misrepresented on issues that are crucial to the integrity of his theories. You could be an asset to Marxist thought if you educated yourself and then supported the interpretation you found to be correct. You can get a good grounding in these matters by reading Kliman’s book “Reclaiming Marx’s ‘Capital,’” which explains the issues in detail and in English (you don’t have to understand the mathematical equations).

  14. Hello, Anne

    I’ve read reclaiming Marx’s Capital and thought it excellent. But that’s not really enough to be an expert, as I’ve not read much of the literature that’s referenced in that work, nor that which has been referenced in the current debate, as my particular focus is elsewhere.

    I want this debate to be resolved, with a common recognition of the objective truth in this matter, and for these two excellent Marxists to continue their great work beyond its current scope.

    I don’t think I’m hypocrite for not calling out the abuse Kliman has no doubt received, but which I’ve not myself read. Of Kliman’s work that I have read, I simply want it to be as effective as possible in changing minds, if indeed his detractors are wrong, as my instinct tells me.

    My fault might be that I’m always harsher on people whom I admire, because I have higher expectations of those I respect.

  15. James Coles:

    1. Since you agree that only one of their interpretations can be correct, and you want the debate to be resolved in favor of the correct one, and you won’t acquire the expertise needed to know which one that is and then advocate for it, then what will you do? And what can anyone do to settle this matter in favor of the truth?

    2. I wasn’t calling you a hypocrite for not objecting *here* to the abuse heaped on Kliman by some of the internet left. I was urging you to take constructive action against the abuse by commenting on it elsewhere, because that’s the way to stop it, to try to make sure others are not disinclined to read Kliman because they’re heard terrible things about him. That is something you can do to help *right now,* by commenting on other sites. Your words of praise for his work here accomplish nothing towards bringing about the environment of respect, honesty and logic that is needed to resolve the contested issues.

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