Lack of A Formal Proof
Marx's critics interpreting his models often argue he keeps assuming what he needs to explain, because rather than really "transforming values into prices" by some quantitative mapping procedure, such that prices are truly deduced from labour-values, he either (1) equates values and prices, or else (2) he combines both values and prices in one equation.
Thus, for example, either Marx infers a rate of profit from a given capital composition and a given quantity of surplus-value, or else he assumes a rate of profit in order to find the amount of surplus-value applying to a given quantity of capital invested. That might be fine if the aim is to just investigate what profit an enterprise or sector would receive on average, having produced a certain output value with a certain capital composition. But this manoeuvre of itself cannot contain any formal proof of a necessary quantitative relationship between values and prices, nor a formal proof that capitals of the same size but different compositions (and consequently different expenditures of labour-time) must obtain the same rate of profit. It remains only a theory.
Marx insists both that output prices obtained will necessarily deviate from values produced, but also that the sum of prices would equal to the sum of values in the pure case, yet, critics claim, he fails to show quantitatively how a distribution process could then occur such that price magnitudes map onto value magnitudes, and such that a uniform profit rate returns equal profits to capitals of equal sizes (a mapping relation is used here in the mathematical sense of a bijective morphism, involving one-to-one correspondence between value quantities and price quantities via mathematical equations). In that case, there is again no formal proof of any necessary relationship between values and prices, and Marx's manuscript really seems an endless, pointless theoretical detour leading nowhere. In modelling, simple logical paradoxes appear of the type that:
- in a static model, it is impossible to uphold the postulate of a uniform rate of profit and the postulate of total values=total prices at the same time;
- to find production-prices, a uniform rate of profit must be assumed, while at the same time to find a uniform rate of profit, production-prices must already be assumed;
- a price level must be assumed, rather than be deduced from labour-values.
All these conceptual and logical issues mentioned become crucial when attempts are made to model value and price aggregates mathematically to study capitalist competition. Different kinds of theoretical assumptions or interpretations will obviously lead to very different results.
Read more about this topic: Prices Of Production, Facts and Logic
Famous quotes containing the words lack of, lack, formal and/or proof:
“Poverty is relative, and the lack of food and of the necessities of life is not necessarily a hardship. Spiritual and social ostracism, the invasion of your privacy, are what constitute the pain of poverty.”
—Alice Foote MacDougall (1867–1945)
“What chiefly distinguishes the daily press of the United States from the press of all other countries is not its lack of truthfulness or even its lack of dignity and honor, for these deficiencies are common to the newspapers everywhere, but its incurable fear of ideas, its constant effort to evade the discussion of fundamentals by translating all issues into a few elemental fears, its incessant reduction of all reflection to mere emotion. It is, in the true sense, never well-informed.”
—H.L. (Henry Lewis)
“Good gentlemen, look fresh and merrily.
Let not our looks put on our purposes,
But bear it as our Roman actors do,
With untired spirits and formal constancy.”
—William Shakespeare (1564–1616)
“The thing with Catholicism, the same as all religions, is that it teaches what should be, which seems rather incorrect. This is “what should be.” Now, if you’re taught to live up to a “what should be” that never existed—only an occult superstition, no proof of this “should be”Mthen you can sit on a jury and indict easily, you can cast the first stone, you can burn Adolf Eichmann, like that!”
—Lenny Bruce (1925–1966)