by Andrew Kliman, author of Reclaiming Marx’s “Capital”: A Refutation of the Myth of Inconsistency
The bullshitter … does not reject the authority of the truth, as the liar does, and oppose himself to it. He pays no attention to it at all. By virtue of this, bullshit is a greater enemy of the truth than lies are. –– Harry G. Frankfurt (On Bullshit, p. 61)
Recently, in the comments thread following Part 13 of my 2016-17 series, “All Value-Form, No Value-Substance: Comments on Moseley’s New Book,” Fred Moseley made a bold and significant claim regarding the supposed anti-Sraffian implications of his interpretation of Marx’s value theory:
the different effects of a change in the distribution of capital on the rate of profit is another way in which my interpretation of Marx’s theory of the rate of profit is different from the Sraffian theory of the rate of profit, … :
Marx: change in the rate of profit
Sraffa: no change in the rate of profit.
That claim is of course false. As I noted on p. 174 of Reclaiming Marx’s “Capital,”
Moseley’s rate of profit is determined by the same technological and real wage coefficients that determine all other simultaneist theorists’ rate of profit, and in exactly the same manner. That he expresses his rate of profit as the ratio of surplus-value to capital value advanced, instead of as a ratio of physical coefficients, makes no difference. It is all value-form and no value-substance.
My purpose here has not been to expose Loranger and Moseley’s failures, but to show that their embrace of simultaneism makes failure inevitable. Simultaneous valuation necessarily leads to physicalist conclusions, not Marx’s conclusions.
Although his claim is false (and, indeed, preposterous), Moseley put it forward very proudly—as well as repeatedly and insistently. He first made the claim on August 3. Three days later, he complained that “Kliman did not respond” to it; and then he repeated the claim. And four days after that, he complained a second time that “Kliman’s latest comment … did not respond” to his claim, which he then reiterated yet again.
I finally decided that I had had enough of Moseley’s badgering. The time had come for him to put up or shut up.
I noted that “this claim keeps being made without EVER being demonstrated.” And I wrote that “I’ll believe it when I see it, i.e., when it’s demonstrated.” But I predicted that “I’m confident that I’ll never see such a demonstration.”
That prediction has proven to be correct. (At least thus far. Moseley may yet demonstrate it––ROFL.)
[At this point, Kliman falls off his chair and rolls on the floor, laughing.]
What a Demonstration Requires
I went on to note that an example that succeeds in demonstrating the claim—i.e., an example in which a change in the distribution of capital causes Moseley’s rate of profit to change—must satisfy certain conditions. The distribution of advanced capital must change, of course, and the value compositions of capital (i.e., the ratios of constant to variable capital) must vary across sectors.
In addition, “the physical techniques of production utilized in the different sectors, and the real wage per unit of living labor, [must be] shown to have remained constant.” This is a crucial requirement because Moseley is alleging that a change in the distribution of capital is a distinct, independent cause of changes in his rate of profit. In other words, he is claiming that his rate of profit changes when, and because, the distribution of capital changes, even if technology and the real wage rate do not change. A successful example must therefore keep technology and the real wage rate constant, “so that we can assess whether Moseley’s rate of profit changes when the distribution of capital—and it alone—changes.”
Finally, I noted that an example that succeeds in demonstrating Moseley’s claim must be one in which “THE PER-UNIT PRICES OF OUTPUTS EQUAL THE PER-UNIT PRICES OF INPUTS.” The reason this is a requirement is simple: the example has to show that Moseley’s rate of profit changes when, and because, the distribution of capital changes. So its prices of production and the associated rate of profit have to be determined in the manner that Moseley determines them—in other words, subject to the condition that input and output prices are equal.
Bait and Switch
Confronted with my reminder that he bears an ethical responsibility, as an intellectual—and indeed, as a human being—to substantiate what he says, Moseley’s response was both pathetic and deceitful. Although the claim he needs to demonstrate is quite clearly a claim about his interpretation—“my interpretation of Marx’s theory of the rate of profit is different from the Sraffian theory of the rate of profit”; “The effect of a change in the distribution of capital on the rate of profit is another difference between my interpretation of Marx’s theory and Sraffa’s theory” (emphases added)—Moseley carefully evaded any examination of the actual implications of his interpretation!
He did provide an example with some numbers in it, but the numbers don’t include any information about what the per-unit prices of inputs and outputs are, or whether they are equal to one another, even though that equality is a crucially important feature of Moseley’s interpretation. Nor do the numbers tell us anything about whether the change in the rate of profit is due to a change in the distribution of capital rather than to a change in technology or the real wage rate, because the numbers he provided include no information at all about the latter two factors. So the example does absolutely nothing to substantiate Moseley’s claim that, according to his interpretation, the rate of profit can change because the distribution of capital, and it alone, changes.
In short, the example is far too general and incomplete to count as an example of Moseley’s interpretation or to test the truth-value of his recent claim. The numbers he provides are compatible with scenarios in which, contrary to his interpretation, input and output prices aren’t equal, and in which, contrary to his claim, technology and/or the real wage rate are changing and producing the change in the rate of profit.
Moseley himself seems to be well aware the example isn’t specifically about his interpretation and its implications. He copies an example of Marx’s. And pretending to “‘Let Marx speak for himself’” (emphases added), he chooses to discuss Marx’s example rather than his own interpretation and its implications. Moseley then tells us how “Marx summarized his discussion” (emphases added). Next, in what appears to be an effort to justify the example’s failure to satisfy the most important requirements (unchanged technology and real wages, equality of input and output prices), Moseley informs us that “physical quantities and unit prices have nothing to do with the determination of the rate of profit in Marx’s theory” (emphasis added).
So up to this point, what Moseley has provided—in response to a request to substantiate a claim he has made about an implication of his interpretation—is nothing of the kind. It is 100% about Marx’s theory and 0% about Moseley’s interpretation.
But then, suddenly, Moseley executes an unobtrusive bait and switch:
Thus there is a clear difference between my interpretation of Marx’s theory and Sraffian theory [… regarding] the effect of a change in the distribution of capital on the rate of profit. [emphasis added]
Ok, ok, this bait and switch isn’t at all unobtrusive—to you and me. But if you’re in a coma or can’t read English, then it probably is unobtrusive.
In any case, it should be obvious that it’s totally illogical to draw a conclusion about Moseley’s interpretation from a set of premises that are not about that interpretation, but instead about Marx’s own theory. Thus, it should be obvious that Moseley has failed to demonstrate his claim, exactly as I predicted.
Turning Marx into a Sock Puppet
But the most reprehensible and nauseating aspect of Moseley’s response is his claim that he is letting Marx speak for himself when he is actually doing the very opposite. He is forcibly equating Marx and himself, pretending that there is no difference between Marx’s original theory and his own interpretation of that theory.
For proof that this is exactly what Moseley is doing, one needs only to reflect on his bait and switch. His passing directly and seamlessly from premises about Marx to a conclusion about himself is completely illogical unless there is no difference between Marx and Moseley. So that is what Moseley is effectively alleging. Thus, far from letting Marx speak for himself, Moseley has turned him into a sock puppet.
Marx puppet, from the Unemployed Philosophers Guild
Occupy “Marxian Economics”
I repeat: Moseley bears an ethical responsibility, as an intellectual and as a human being, to substantiate what he says, to tell the truth, to refrain from bullshit and lies. So do the rest of the “Marxian economists” and other left intellectuals. But I by myself lack the power to make them behave in accordance with these norms of decency and scientificity.
I could try to shame them onto a truth-pursuing path. But as the case of Donald J. Trump, liar-in chief and bullshitter-in-chief, has made clear, trying to shame people into behaving properly doesn’t work when the people in question are shameless.
And it clearly isn’t in the interest of the “Marxian economists” and other left intellectuals to behave properly. They have fans and followers who tolerate their continual violation of the norms of decency and scientificity. They have fans and followers who find it cute to observe how they get away with murder, or exhilarating and empowering to be able to say and “believe” whatever they find appealing, irrespective of its factual accuracy. They have fans and followers who look to their perceived interests and desires, instead of evidence and reasoning, when deciding what to “believe.” As long as this situation continues unchecked, the “Marxian economists” and other left intellectuals will continue to have strong incentives to behave improperly and insufficient incentives to behave properly.
What is needed is thus a mass movement that struggles, continually and without wavering, against all this, a mass movement that champions the pursuit of truth and that is prepared to enforce truth-seeking behaviors. Of course, the determination to set things straight, by means of such struggle, will arise only when truth-seeking behavior is recognized to be a concern of the highest priority. But the facts on the ground are helping to induce that recognition.
It is becoming ever-increasingly clear that Trumpism is a mortal threat and that a key reason it continues to threaten us is that Trump and his lackeys are able to bullshit and lie with impunity. Just imagine how hard it would be for Trump to “control the narrative,” and how weak he would be shown to be, if he were compelled to retract his false statements and to suffer consequences for having made them!
But Trumpism is not some aberration that sprang up suddenly from out of nowhere. One of the factors that helped pave the way for it is the “post-truth” ethos, an ethos that is much too tolerant of bullshit, lies, and “alternative facts.” This ethos is not the exclusive property of the far right by any means. It pervades society as a whole, including the left, as I have noted above.
Currently, much of the left is helping to normalize Trumpism through its own equivocations regarding the importance of truth and its failure to induce and enforce truth-seeking behaviors in its forums and institutions. This makes the unacceptable seem acceptable because “everyone does it” and, supposedly, “there is no alternative.” To help turn this situation around, to show that another world is possible, the left needs to put its own house in order.
 This statement applies to Moseley’s interpretation, even though he delights in denying that his interpretation of Marx’s value theory is simultaneist, i.e., that it employs simultaneous valuation. These terms were used in Reclaiming Marx’s “Capital” to refer to the condition that per-unit prices of inputs to production must equal the per-unit prices of the outputs that are later produced by means of these inputs, and Moseley certainly does impose that condition. So the statement is obviously applicable to him, all semantic product differentiation notwithstanding.
 My comment and Moseley’s response to it are both reproduced in full at the end of this article.
August 11, 2019 at 2:42 am
Fred Moseley has now alleged three times (Aug. 3, Aug. 6, and Aug. 10) that “[t]he effect of a change in the distribution of capital on the rate of profit is another difference between my interpretation of Marx’s theory and Sraffa’s theory (Marx: no change in the rate of profit vs. Sraffa: change in the rate of profit).”
I note that this claim keeps being made without EVER being demonstrated.
I’ll believe it when I see it, i.e., when it’s demonstrated.
I’m confident that I’ll never see such a demonstration.
To demonstrate it, Moseley “merely” needs to produce a numerical example in which:
(1) the distribution of advanced capital varies across sectors;
(2) the compositions of capital differ across sectors (so that we can distinguish between what happens to prices of production and what happens to values);
(3) the physical techniques of production utilized in the different sectors, and the real wage per unit of living labor, are shown to have remained constant (so that we can assess whether Moseley’s rate of profit changes when the distribution of capital–and it alone–changes);
and, MOST IMPORTANTLY,
(4) THE PER-UNIT PRICES OF OUTPUTS EQUAL THE PER-UNIT PRICES OF INPUTS.
I am confident that he cannot produce such an example. But let’s see. Hic Rhodus, Hic Salta, Fred.
“Once” he produces such an example, I’ll be happy to return to other issues raised in this discussion. 😉
August 13, 2019 at 11:19 am
“Let Marx speak for himself”
Marx’s own example of the effect of the distribution of capital on the general rate of profit is given on pp. 261-63 of Volume 3, which I referred to in a previous comment. His example has four capitals (A, B, C, D) with different compositions of capital, and with the initial distribution of capital, the rate of profit is 22.5%.
C V C+V S
A 75 25 100 25
B 60 40 100 40
C 85 15 100 15
D 90 10 100 10
Total 310 90 400 90
Rate of profit: 90 / 400 = 22.5%
Then with a different proportional distribution of capital, the rate of profit falls to 13.1%.
C V C+V S
A 150 50 200 50
B 180 120 300 120
C 850 150 1000 150
D 3600 400 4000 400
Total 4780 720 5500 720
Rate of profit: 720 / 5500 = 13.1%
The change in the distribution of capital results in a higher proportion of the total capital having a higher composition of capital (e.g. C and D) and thus the total capital has a lower rate of profit.
Marx summarized his discussion as follows:
“The general rate of profit is determined therefore by two factors:
(1) the *organic composition of the capitals* in the various spheres of production, i.e. the different rates of profit in the particular spheres;
(2) the *distribution of the total social capital between these different spheres*, i.e. the relative magnitudes of the capitals invested in each particular sphere, and hence at a particular rate of profit; i.e. the relative share of the total social capital swallowed up by each particular sphere of production.”
Physical quantities and unit prices have nothing to do with the determination of the rate of profit in Marx’s theory. The rate of profit is determined at the macro level of abstraction by the rate of surplus-value, the composition of capital in each industry, and the distribution of capital across industries with different compositions of capital. The rate of profit is determined prior to and independent of unit prices.
In Sraffian theory, on the other hand, *the rate of profit does not depend on the distribution of capital*, as Kliman’s example in Part 2 illustrates (the rate of profit remains at 20%). The rate of profit in Sraffian theory does not depend on the rate of surplus-value and the composition of capital but instead depends on the physical input-output coefficients, which remain the same when the distribution of capital changes. The rate of profit in Sraffian theory is determined simultaneously with unit prices.
Thus there is a clear difference between my interpretation of Marx’s theory and Sraffian theory in the case the distribution of capital and the effect of a change in the distribution of capital on the rate of profit. And also a clear difference on the relation between the rate of profit and unit prices. The basic reason for these differences is that Marx’s theory is based on the labor theory of value and surplus-value and Sraffian theory is not.
I’ve long thought that this classic cartoon by Roz Chast captures the essence of the difference between Moseley’s interpretation and the standard physicalist interpretation of Marx’s value theory.
I would like to read all these comments in a book form. I’ve lost the overview completely and I missed some…