Date: Fri, 05 Aug 1994 14:15:49 -0500 (EST)
From: eugeneh <eugeneh-AT-HUMANITIES1.COHUMS.OHIO-STATE.EDU>
Subject: reply to Steve Keen



I agree completely with Steve Keen when he argues that value 
theories 

"[aren't] just supposed to supply a set of numbers.... They are 
also supposed to provide a philosophical foundation for the 
extension of the theory." 

He then concedes that 

>in sociology, history, philosophy and cultural studies, Marx's 
>legacy continues to provide the main opposition to conservative 
>thought,

but still argues that 

>neoclassical economics'... theory of value has been manifestly 
>more successful than the [Marxian] LTV! 

This is not the blatant self-contradiction it may at first appear 
to be, partly because of what apparently doesn't count as 
"extensions of the theory" (i.e. sociology, history, etc.) and 
partly because of the way Keen defines "successful" -- i.e. 
"construct(ing) an enormous theoretical edifice": 

>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." 

That was clearly *not* the aim of Marx's critique of political 
economy.

Here is how Keen's comparison unfolds: 

>How does the LTV shape up in comparison [with neoclassical value 
>theory]? 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... " 

Here Keen confuses the purview of neoclassical economics with 
that of Marx's historical and materialist critique of bourgeois 
*political economy* and capitalist society.  What the LTV 
predicts, in fact, are tendencies such as the perpetual drive for 
expanded markets, the concentration of capital, periodic crises 
of overproduction/underconsumption, etc.  And because the LTV is 
*further* linked via the concepts of exploitation, class, and 
ideology to Marx's systematic critique of capitalism and 
bourgeois society as a whole, it is no wonder that, as Keen says, 

>in sociology, history, philosophy and cultural studies, Marx's 
>legacy continues to provide the main opposition to conservative 
>thought.

How does all that compare with the "immense theoretical edifice" 
of conservative economic theory?!? 

If "Marxism long ago lost the mantle of the main *theoretical* 
opponent to convervative economic theory" (emphases added), as 
Keen claims, it is largely due to the stranglehold bourgeois 
apologetics exercise on most ecomomics departments and the self-
limitation of neoclassical theory to the *discipline* of 
"economics" itself (whereas Marxism's broader interests and 
ambitions beyond "economic theory" tend to get excluded by 
disciplinary boundaries).

In this light, what is significant about Paul's empirical 
evidence in support of its ability to predict prices (which 
ability is in my view a strictly secondary but nonetheless 
interesting use of the LTV) is that it now can challenge 
discplinary economics "where it lives" (as do the recent 
successful applications of non-linear mathematics to formalizing 
the short- and long- wave cycles). 

Far from being the cause of a "travesty," as Keen suggests, the 
Marxian LTV is one of the cornerstones of Marxist critique.  For 
on BOTH counts -- as a basis for mathematical formalization of 
price trends and business cycles *and* (more importantly) for the 
radical critique of capitalism and bourgeois society -- the LTV 
is one of the root causes of Marxism's continuing success and 
promise. 

          Gene Holland