This is surely a time of year when we can take a step back to ponder any crazy thought that might enter our heads. Nothing – in the theoretical realm – should be considered unthinkable. Some may be tempted to disagree, a few paragraphs along, but that could only add to the fun. Hopefully I will not be permanently banished from the internet for expressing such idle curiosities. If this is the price that must be paid, it won’t be pleasant, but so be it.
It has been pretty serious around here of late. Perhaps that is excuse enough to let our proverbial hair down for a week or so. That hair may be more proverbial for some than others. But who’s really counting at this time of year? It’s not clear, exactly, what Heteconomist might actually have done to deserve credit for the holiday amusement, other than to slap together a few YouTube videos featuring the comic and/or musical talents of others. But here, too, who’s really going to notice? It’s the festive season.
In recent parts of the series, we have been considering the temporal single-system interpretation (TSSI) of Marx’s theory of value. We have considered how, in the TSSI, the values of constant capital and variable capital depend upon the prices that prevail when inputs and labor power enter production. In contrast, the values and prices of output are only determined once production is complete and the commodities are ready for sale on the market. This conception of value and price determination requires a more general formula for the MELT (or ‘monetary expression of labor time’). The basic meaning of the MELT remains the same. It is still the amount of monetary value attributable to an hour of socially necessary labor or, conversely, the amount of labor, represented in commodities, that a unit of the currency can command. But there is now a need to account not only for the rate at which living labor creates monetary value but also the rate at which monetary value is transferred from the means of production to final output. In the TSSI, the method for calculating the MELT needs to be modified under most circumstances.
The previous post introduced the temporal single-system interpretation (TSSI) of Marx. It was seen that, under this interpretation, Marx’s three aggregate equalities all hold. It was noted that the same can be said for other single-system interpretations. As long as constant capital and variable capital are defined as the amounts paid for the means of production and labor power, the equalities are logically valid. In this post, a possible rationale is offered for defining constant and variable capital in this way. Attention then turns to Marx’s own writings on the matter to consider whether the single-system understanding accords at all with his view.
GUEST POST by jrbarch: To recap what was said about Mind, previously:
- Proper use of the mind is just as important as a healthy body and emotions
- The fourth noble truth of the Buddha embraced this in his eight-fold path
- There are great conditioning ideas that influence mankind
- Mind has a regressive tendency to crystallise, compartmentalise, and build walls between compartments
- Mind progressively, is essentially a light-bearer (the light of understanding)
- Mind receives impressions from the three worlds (physical emotional mental) and is rapidly thrown into thought-forms in response; but it also receives impressions from higher sources
- Mind and intellect are picture-makers; the real intelligence is the Observer or Self
- Mind is a screen on which is reflected an ‘interpretation’ by the persona of
- an impression the senses have generated or pattern the intellect has woven
- an impression thrown down by the Observer
- an impression from the formless world (abstract mind)
- Universal truths such as the existential material psychological and spiritual brotherhood of man and fatherhood of the Divine taught by the Christ, and four noble truths taught by the Buddha, resonate in every human heart – and are handed down to humanity, to germinate as does a seed; branching and descending further downwards into human nature, clothing themselves in the best of human thought possible, awaiting revelation as fact
- When mind fails, it fails altogether as fantasy and illusion, sociopathy and psychopathy; lying becomes the norm
- Without the heart, mind leads to darkness, bondage, oblivion
- In this sense, mind is the slayer of the Real
- The journey from the periphery of mind to the centrality of the human heart is human reality: – whether we know it or not, whether we are caught up in the affairs of the world or not
- Mind desires many things: – the heart is singular. Mind lives on vapour – the heart lives on substance
- Steps back to the center are recognisable in humanity and are the subject of this post
Within the last century, quite a number of lost ancient religious texts have been found. Sadly, few of these, even when of an eschatological nature, have turned their attention in any detail to the work of economists. Especially lacking has been a consideration of the history of economic thought. Happily, this oversight can now be put partly right. I believe this could be the first finding of its kind ever published in the economics blogosphere. The discovery was certainly fortuitous, hidden as it was behind a dusty edition of Milton Friedman’s A Monetary History of the United States, which had somehow found its way into the lost books section of the local library. If it had not been for my insistence that the library clerk mount a step ladder to remove it from the area, the lost Book of Noah’s Wife might have fallen into the hands of the monetarists.
Differences in interpreting Marx, as we have seen, tend to come down to three key questions. The first concerns how the value of labor power is understood. This will affect the treatment of variable capital. Is its value determined by the labor embodied in wage goods or the prices of those goods? The second question concerns the value of the means of production. This pertains to constant capital. Is the value of constant capital determined by the labor embodied in inputs or the amounts paid for them? The third question concerns whether value and price determination should be considered simultaneous or temporal. It was pointed out in the previous post that Marx’s aggregate equalities stand or fall with our answers to the first two questions. His equalities hold provided constant and variable capital are assumed to depend upon the prices of inputs and wage goods rather than the labor embodied in them. This approach is taken by all single-system interpretations, whether temporal or simultaneist. For the purposes of this post, adopting any of these interpretations would have been fine. However, the choice between temporality and simultaneity will sometimes be relevant later in the series. By way of background, the present post specifically introduces the temporal single-system interpretation (TSSI).
So far, the intention has been to give a sense of the relevance and accessibility of Marx’s macroeconomic ideas. Rather than jump straight into his theory, with what might appear to be strangely named variables and foreign concepts, it seemed desirable to spell out simple connections between Marx’s categories and those of non-Marxist economics. Doing so meant glossing over some of the finer points of Marx’s definitions and categories. The first task of this post is to address a few of these. Attention then turns to distinguishing value from price and introducing Marx’s three aggregate equalities. The implications of Marx’s equalities are powerful, but their validity depends on how his theory is interpreted. The final section of the post will highlight the major points of contention. This will provide context for two upcoming posts, which consider the temporal-single system interpretation (TSSI) and a possible rationale for its adoption in this series.
The first post in this series distinguished between three types of macro measures: ‘monetary’, ‘real use-value’ and ‘real labor-time’ magnitudes. Under simplifying assumptions, the post spelled out basic connections between these different kinds of variables. The same assumptions are retained in this post to highlight a connection between the aggregate markup (Kalecki), the rate of surplus value (Marx), value of the currency (MMT) and the monetary expression of labor time (MELT).
I am interested in exploring what seems to be a basic compatibility between MMT (Modern Monetary Theory) and Marx. Compatibility of two theories, of course, does not require agreement, and there is no suggestion that either MMT proponents or Marxists will find a synthesis between the two approaches fruitful. Compatibility simply means that the two approaches are mutually consistent and that, if desired, the insights of both could be integrated into a unified understanding of the capitalist economy. At the same time, there is no claim that the idea of a connection is new. I have linked in the past to work by MMTers Randall Wray and Mathew Forstater concerned with various aspects of Marx’s theory, and Bill Mitchell has often noted in posts at billy blog an influence on his work of Marx. Suffice to say that, personally, I think a synthesis could prove worthwhile. Some MMTers may agree, some not, and likewise for Marxists.