From: "jurriaan bendien" <Jbendien-AT-globalxs.nl>
Subject: Re: M-TH: surplus value and Doug's utility criterion
Date: Wed, 26 Nov 1997 02:31:41 +0100


>Doug writes: 

> Ok, then maybe you specify for me an example or two of these "subtle
> conceptual distinctions," or an application of "this very powerful tool"
> that explains reality.
> 
> Well I can give you are very practical example from my Phd work in 1989
about "subtle distinctions".  One thing I was trying to measure - in a
moment of folly perhaps - was the rate of return on capital for the
productive sector of the New Zealand economy, to get an idea of the trend,
using SNA-type data.  There were heaps of conceptual issues with it, e.g.
(I am just taking a handful at random):

1. What do you do with the "increase in stocks" item, is this part of
surplus value or not ?
2. How do I estimate the stock of variable capital, having made
distinctions between productive and unproductive labour where possible and
so on - how do I relate variable capital advanced/tied up to circulating
constant capital stock rotation cycles (e.g. intermediate
consumptions/average stock levels) ?
3. How do I estimate the stock of circulating constant capital given that
the information on stock levels was very patchy, except for manufacturing ?

3. How can I split out the profits of owner-operated businesses included in
operating surplus ?
4. How do I deal with stocks in forestry (standing timber being a fixed
capital, but cut timber being a circulating capital). 
5. Problems of capital expenditure and producer input price indexes that
weren't very satisfactory.
6. How do I deal with revisions of the official SNA figures while I am
making my analysis ? 
7. How do I deal with the farm sector, and what effect has this on the data
(for example, some cows and sheep are fixed capital, some circulating
capital, depending on the rotation time). 

It was a big job sorting it all out. I tried a lot of different procedures
with the available data but from memory I concluded at one point that
striking a rather crude ratio of operating surplus in current values to
fixed capital stock in current values (measured using the perpetual
inventory method) actually seemed to give a reasonable picture of the trend
1971-88, and that if it was just the trend I wanted that was probably
sufficient. I could adjust it this way and that way but it did not make so
much difference. I could compare it also to some other sources of
profitability indicators (balance sheet type data) and circumstantial
evidence, and I felt it stood up quite well even though from a purist point
of view it was a pretty shitty and crude measurement.   
	Among others the size of fixed capital stocks outweighed almost all the
difference that circulating stocks could make to the trendline.  Because of
some unsurmountable technical reasons to do with data availability at the
time, I think I just decided to ditch the farm and the forestry sector from
the analysis meantime. That was not my intention, but okay, there were
problems with it.
	Maybe Bill Cochrane has done a better analysis than I did, by now, using
similar or different sources, I don't know.  I would be interested to know
of his results.
	Anyway in performing this apparently slightly ludicrous scholastic
exercise over a few months I learnt a lot about the New Zealand economy, I
can tell you that. (Among other things you learn to count sheep, literally.
 I suppose that is a bit quaint, dry and boring).  It was like the thing I
mentioned in an earlier contribution about bringing use-values back into
the analysis, i.e. talking about the specific outputs of a specific
economy.  
	But I also learnt that many subtle distinctions in the pure theory of
capitalism really didn't make so much much difference to the overall
results of the data analysis.  Of course you can always argue that at a
certain level of abstraction subtle differences do become important.  But
my idea at that time was to stop abstracting speculatively in the realm of
pure theory and be guided by the data of a real economy.
> 
> Concerning Marxism as a powerful tool for analysing social reality, refer
to any of the works of the valid Marxist economic literature (some of which
has been mentioned in this discussion) and ask yourself, who in the
non-Marxist camp has made better and more accurate forecasts/ predictions,
and provided more insight over the last 30 years about the dynamics of
capitalism ?  For instance, put side by side what Mandel wrote and what
contemporary bourgeois economists wrote, and  ask yourself who is making
better predictions, who is explaining better what is really happening ?  
	Andre Gunder Frank wrote an article once comparing neoclassical economic
forecasts with astrological forecasts (I think published maybe in Critique
or one of those journals) and there seemed to be a good case for saying you
were better off with astrology.  
	I don't think that is the same today though, given modern means for
communication and analysing data sources, which is why I say that you can
go a long way with a pragmatic/eclectic approach these days. Even so at a
certain point your analysis and your life must come together, and this is
more what James is talking about. 

Bedtime for all good boys and girls in this neck of the woods.  I feel
neckered.
> 
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