Is Marx's Theory of Profit Right?: The Simultaneist-Temporalist Debate (Heterodox Studies in the Critique of Political Economy)
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This collection focuses on a long-running debate over the logical validity of Karl Marx’s theory that exploitation is the exclusive source of capitalists’ profits. The “Fundamental Marxian Theorem” was long thought to have shown that orthodox Marxian economics succeeds in replicating Marx’s conclusion. The debate begins with Andrew Kliman’s disproof of that claim.
On one side of the debate, representing orthodox Marxian economics, are contributions by Simon Mohun and Roberto Veneziani. Although they concede that their simultaneist models cannot replicate Marx’s theory of profit in all cases, they insist that this is as good as it gets. On the other side, representing the temporal single-system interpretation of Marx’s theory (TSSI), are contributions by Kliman and Alan Freeman. They argue that his theory is logically valid, since it can indeed be replicated when it is understood in accordance with the TSSI.
While the debate initially focused on logical concerns, issues of pluralism, truth, and scientificity increasingly assumed center stage. In his introduction to the volume, Nick Potts situates the debate in its historical context and argues forcefully that the arguments of the orthodox Marxist economists, and the manner in which those arguments were couched, were “suppressive and contrary to scientific norms.”
The volume concludes with a 2014 debate, in which many of the same issues re-surfaced, between the philosopher Robert Paul Wolff and proponents of the TSSI.
identical goods (586 computers).5 Yet, as was noted above, simultaneist theorems that surplus labor is sufficient for positive profit do require the postulate that all net products are positive. Since this postulate is violated in every actual economy, it follows that the theorems do not apply to the real world.6 It is impossible, moreover, for simultaneists to construct comparable theorems to cover real-world situations, because simultaneous valuation is impossible when some inputs are not
units of good 2, per unit of living labor, a11 = a22 = 0.1, a12 = a21 = 0.89, and ℓ1 = ℓ 2 = 0.01. Capitalists maximize internal rates of return (IRR), and the IRRs are continually equalized. During the daytime, X1 = 1 and X2 = 99; during the nighttime, X1 = 99 and X2 = 1. (The alternating output levels result from profit-maximizing choices.) It is expensive and unprofitable to hire workers at night, so both sectors produce during their daytime only. But almost all of sector 2 is located twelve
central claim put forward in Kliman’s (2001) original contribution: that all simultaneist interpretations fail to replicate Marx’s theory of profit in a logically robust manner. Our previous contributions have also demonstrated that: 6.Mohun’s (2003: 99) claim that the temporalist monetary expression of labor-time (MELT) is negative whenever the PNP is negative is not correct (Kliman and Freeman 2006: 120–21). 7.Even if the PNP were always positive, surplus labor would still not be the
combinations of the variables such that Πt > 0 while St < 0, and vice versa” (Veneziani 2004: 105–06). But this means precisely that it is possible that profit is positive (Πt > 0) while surplus labor is negative (St < 0), and vice versa. Thus, surplus labor is neither necessary nor sufficient for profit under simultaneism. Why does Veneziani fail to acknowledge this in a forthright way, and without obfuscating phrases like “trivially true,” “uninteresting,” and “arbitrary”? Indeed, these are,
(10.3), after multiplying through by xt, to derive the difference equation And that is all. In fact, TSSI adherents do argue that the TSSI MELT should be “determined” dynamically, and equation (10.9) is all that matters in deriving the main conclusions of the TSSI.6 Kliman and Freeman write “the magnitude of the MELT is always determined inter-temporally, since the amount of labour commanded, and the price and value of output, depend in part upon prior events” (Kliman and Freeman 2008: 113,