Date: Fri, 05 Aug 1994 10:17:13 +1000
From: Steve.Keen-AT-unsw.EDU.AU
Subject: Re: Sutures and Mac trucks


Dear Paul,
I am quite willing to concede that the arithmetical suture may
be small, but on the theoretical side I stick with Andy's
mac truck analogy.

A theory of value isn't just supposed to supply a set of
numbers (which the theories of value of marxian and
neoclassical economics both purport to do). They are also
supposed to provide a philosophical foundation for the
extension of the theory. On this front, while neoclassical
economics has its problems (that I of course feel should
be terminal), its theory of value has been manifestly
more successful than the LTV.

While Marx and other critics were sniping at its theoretical
foundations from the outset, it took something
as complicated as the Cambridge controversies to dent its
theoretical foundations. In the meantime, their
subjective, utility-maximisation theory of value allowed
them to construct an enormous theoretical edifice.

How does the LTV shape up in comparison? It was under attack
for an obvious anomaly (the conversion of values into prices)
right from day one. Now you tell us that over a century
later, an arithmetic reply has been found; great. What
theoretical edifice does it defend? Compared to the
neoclassical, almost nothing. Predictions of the
inevitability of socialism, of final crises of capitalism...

While I presume that in sociology, history, philosophy
and cultural studies, Marx's legacy continues to provide
the main opposition to conservative thought,
Marxism long ago lost the mantle of the main
theoretical opponent to convervative economic theory.
That is held--rightly--by post-keynesians and
sraffians.

Given that Marx saw his holistic analysis as being firmly
footed in the material and economic, this is a travesty
of his legacy. And I'm afraid that the travesty will 
continue as long as marxists cling to its root cause: the
labor theory of value.

Cheers,
Steve Keen