"Volume III of Capital addresses the distribution of surplus value but not in the simple sense of who gets how much. Note, however, that even this superficial interpretation presupposes, correctly in line with Marx's method, that the surplus value has to be produced before it is distributed. If, though, the distribution is simply interpreted as a cake-division exercise, as in the (neo-)Ricardian (or Sraffian) interpretations, then the concepts of surplus value and profit collapse and the former simply servers as a superfluous accounting exercise. In contrast, Marx deals with distribution of surplus value as a refinement of value. The results of the previous Volumes are brought together and used to develop more complex and concrete categories in terms of the economic processes by which production and exchange are integrated." -- Ben Fine (2001)I am amused by Alan Freeman (who is the co-inventor of a new mathematical economics interpretation of Marx):
"Variant b of step 7: the Value System is primaryThis is one Sraffian view:
We know values are primary because of all Marx's qualitative arguments concerning the nature of exchange, because of a wealth of empirical evidence, and because of many philosophical and socio-political arguments on the role of human labour. Let us therefore take the 'primary causal' role of value as an axiom. Let us postulate that, against substantial evidence from the texts, Marx unconditionally asserted that the value of every commodity is determined without the mediation of money.
This leads to a veritable garden of forking paths. We can discern at least the following variants
Variant 7b.I: philosophico-mystical
The determination of price by value takes place behind our backs. It is part of the internal workings of the capitalist system which are ever so mysterious and can only be understood by reciting das Kapital six times before breakfast and joining my group. There is no such thing as the transformation problem and it doesn't matter that the figures don't add up, but you wouldn't understand that because you are a bourgeois revisionist.
Variant 7b.II: pseudo-dialectical
The determination of prices takes place as the Sraffians describe it, and the determination of values takes place as Marx describes it. This can only be understood by reciting das Kapital twelve times before breakfast and joining my study circle. It is true that the figures don't add up, but that is because capital is inherently contradictory, and you should learn to live with it. You can't understand that because you haven't read Hegel.
Variant 7b.III: fake materialist
As Marx explains, the forces of production determine everything. This as Plekhanov explains is the basis of historical materialism. What Marx meant by the determination of value by labour time was the determination of value by technology as you will realize if you read Sraffa and buy my newspaper. The figures do add up. You do not understand this because you are not a worker." -- Alan Freeman (1996)
"Therefore, to grasp the essence of the Sraffian revolution it is necessary to define more clearly Sraffa's position in regard to the classical and Marxian approach. The point is that a 'classical-Marxian approach' does not exist, if it is true that Marx considered himself to be a critic of Ricardo and Smith. In other words, was Sraffa a 'neo-Ricardian', as some orthodox Marxists and some orthodox neoclassical economists have argued? Or was he a Marxist, as many of his followers maintained?References
The level of abstraction of Sraffa's model is defined, albeit with the usual cryptic conciseness, by Sraffa himself, in the subtitle of his book: Prelude to a Critique of Economic Theory. It is the same as the first chapter of Capital, which is entitled 'The commodity', and which is the real prelude to the Critique of Political Economy. In that chapter, Marx tackled the analysis of the commodity and its value, and laid down the theoretical bases of all his successive work; he attacked the 'vulgar economists', whom he accused of looking for the explanation of the value of goods in exchange relations; and he linked himself explicitly to Ricardo in looking for it, instead in the production sphere.
However, even though Marx had clearly pointed out that value is a social phenomenon, Ricardo's influence induced him to determine the value of goods by ignoring the capitalist form in which they are produced. Value, according to the theory set out in the chapter on 'Commodities', depends solely on the quantity of labour employed in its production, its social determination being reduced to the way in which society allocates working activity among the various industries. In other words, value is not influenced by the way in which production is socially structured, nor by the way in which the social classes face each other in the production sphere. Thus, for example, the value of the social product does not depend on the way in which the product is distributed - a clear reminder of the Ricardian claim to measure value by making it independent from the variations in distribution. It is obvious that, in order to reach such a result, Marx had to rely on a high level of abstraction, and it is almost paradoxical that a book on 'capital' opens with a chapter in which capital is ignored. Now, it is almost as if Sraffa had rewritten that chapter, trying to reach the maximum level of abstraction, from returns to scale, growth, disequilibrium adjustments, even from the specific institutional structure to which the type of capitalist set-up may conform historically - exactly as in the chapter on 'Commodities'. However, he made it clear once and for all that the only thing which it is impossible to ignore in determining the value of commodities produced in a capitalist economy, is the fact that they are produced in capitalist conditions: that it is meaningless to abstract from the wage, as Marx did in that chapter. In other words, Sraffa took Marx seriously in his treatment of value as a social phenomenon - so seriously that he distanced himself from Ricardo more than Marx did himself.
It seems possible to conclude that, while on the subject of the determination of profit, Sraffa's theory does not bring to light any basic analytical differences between Ricardo and Marx, on the subject of value his work can be read in only one way: the Prelude to a Critique of Economic Theory seems to us just like a first chapter of Capital which Marx would have written if he had been a little less Ricardian and a little more Marxist." -- Ernesto Screpanti and Stefano Zamagni (2005, p. 445-446)
“Socrates: I imagine, Gorgias, that you, too, have taken part in many discussions and have discovered in the course of them this peculiar situation arising: people do not find it easy by an exchange of views to arise at a mutually satisfactory definition for the subjects under discussion, and in this way bring the argument to an agreeable end. Rather, when they disagree on any point, and one declares the other to be guilty of incorrect or vague statements, they grow angry and imagine that everything that is said proceeds from ill will, not from any concern about the matters under discussion. Some of these arguments end most disgracefully, breaking up in mutual vituperation to such an extent that the bystanders are annoyed at themselves for having become auditors of such people. Now why do I say this? Because at the moment you seem to me to be making statements which do not follow from, and are not consistent with, what you first said about rhetoric. I hesitate, therefore, to embark on a refutation in the fear that you may imagine that I am speaking, not with a view to illuminating our subject, but to discredit you. Now if you are the sort of person I am, I shall gladly continue the questions and answers; if not I shall let them go. And what sort of person am I? One of those who are happy to be refuted if they make a false statement, happy also to refute anyone else who may do the same, yet not less happy to be refuted than to refute. For I think the former a greater benefit, in proportion it is of greater benefit to be oneself delivered from the greatest harm than to deliver another. No worse harm, it is true, can befall a man than to hold wrong opinions on the matters now under discussion between us. If, then, you declare yourself to be such a person as I am, let us continue the discussion; but if you think we ought to let it go, let us at once dismiss it and close the interview.” -- Plato, Gorgias (457-458)
"Convincing conditions of sufficient generality which ensure a well-behaved technology have not been proposed. We therefore should not seek for those special assumptions under which neoclassical theory might work but for a different theory of distribution and employment altogether. Keynesian modifications of neoclassical full employment theory are still being discussed by the mainstream economists. I am reminded here of the Ptolemaic world system: if planets do not move in circles although circles are thought to describe their behaviour, epicycles are invented. Why do we not turn to the ellipses straightaway, as Kepler did, forgetting about the circles and the harmonies of spheres, which would mean in our context: why do we not turn to a theory of value which does not presuppose full employment as the natural state?" --Bertram Schefold (1990, p. 383)
"...since both groups of versions of marginalist equilibrium theory - the long-period versions and the neo-Walrasian versions - encounter what appear to be radical and insurmountable difficulties, one must conclude that at present there is no defensible neoclassical theory (in the sense of explanation) of prices and distribution. The onus is on the neoclassicals to show that this is not so. Unless and until they succeed, it seems reasonable to turn to different, non-neoclassical approaches to value and distribution (and employment and growth)." --Fabio Petri (1999, p. 55-56)
"A growing number of contemporary economists recognizes the need to overcome the cowardly protectionism through which the academy endeavors to defend itself from criticism deriving from the facts as well as from the innovations that originate from other social sciences." --Ernesto Screpanti and Stefano Zamagni (2005, p. 513)
"Sraffa ... provided a logically self-consistent solution to the problem of exchange values to which Ricardo - and, following him, Marx - had given an insufficient answer, constituting one of the causes that led to the abandonment of the classical framework and the rise of the marginalist approach; and he showed that to this problem the marginalist approach offered a solution that was only apparently more 'scientific', but that in reality was vitiated in its foundations in so far as the theory of value and distribution is concerned." --Alessandro Roncaglia (2006, p. 460)References
"What I complain of is not only that this theory [Fisher's monetarism] in its various forms has unduly usurped the central place in monetary theory, but that the point of view from which it springs is a positive hindrance to further progress. Not the least harmful effect of this particular theory is the present isolation of the theory of money from the main body of general economic theory.Here's Keynes:
For so long as we use different methods for the explanation of values as they are supposed to exist irrespective of any influence of money, and for the influence of money on prices, it can never be otherwise." (Hayek 1935, p. 2-3)
"So long as economists are concerned with what is called the Theory of Value, they have been accustomed to teach that prices are governed by the conditions of supply and demand; and, in particular, changes in marginal cost and the elasticity of short-period supply have played a prominent part. But when they pass in volume II, or more often in a separate treatise, to the Theory of Money and Prices, we hear no more of these homely but intelligible concepts and move into a world where prices are governed by the quantity of money, by its income-velocity, by the velocity of circulation relative to the volume of transactions, by hoarding, by forced saving, by inflation and deflation et hoc genus omne; and little or no attempt is made to relate these vague phrases to our former notions of the elasticities of supply and demand. If we reflect on what we are being taught and try to rationalize it, in the simpler discussions it seems that the elasticity of supply must have become zero and demand proportional to the quantity of money; whilst in the more sophisticated we are lost in a haze where nothing is clear and everything is possible. We have all of us become used to finding ourselves sometimes on the one side of the moon and sometimes on the other, without knowing what route or journey connects them, related, apparently, after the fashion of our waking and our dreaming lives.And here's Myrdal:
One of the objects of the foregoing chapters has been to escape from this double life and to bring the theory of prices as a whole back to close contact with the theory of value. The division of Economics between the Theory of Value and Distribution on the one hand and the Theory of Money on the other hand is, I think, a false division..." (Keynes 1936, p. 292-293)
"It is a peculiarity of all systematic treatises on orthodox economic theory that there is no inner connexion and integration of monetary theory with the central theory of prices. Usually the monetary theory is only a rather loose appendix to the theory of price formation. The central economic problems - according to the classical theory, those of production, of barter-exchange and of distribution - are treated, without exception, as problems of exchange value, or, in other words as problems of relative prices. Obviously, by regarding the central economic problems in this way one entirely detaches their fundamental treatment from any monetary considerations." (Myrdal 1939, p. 10)
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