Sunday, July 10, 2011

Against The TSSI: Some Literature

The Temporal Single System Interpretation (TSSI) is a reading of Marx in which Marx's theory of value, including his approach to the transformation problem, is internally consistent. I think of Alan Freeman and Andrew Kliman, among the extensive community developing the TSSI, as the most prominent advocates. And, for me, Andrew Kliman's book, Reclaiming Marx's "Capital": A Refutation of the Myth of Inconsistency (Lexington Books, 2007) is the canonical statement, for now, of the TSSI. (I have already posted some initial reactions to Kilman's book.)

The purpose of this post is to list some literature criticizing the TSSI, often harshly. At least some of the articles in the bibliography have replies and responses. Despite the tone of some of this literature, I think the TSSI worth engaging with. On my lengthy to-do list is, some day, to carefully step through Kliman's refutation of the Okishio theorem and through refutations of Kliman's refutation. The Okishio theorem refutes Marx's law of the declining rate of profit.

If one were curious about what Marxists economists have to say today, one might browse recent back issues for some of these journals.

  • Simon Mohun and Roberto Veneziani (Summer 2007) "The Incoherence of the TSSI: A Reply to Kliman and Freeman", Capital and Class, V. 31: 139-145.
  • Gary Mongiovi (Fall 2002) "Vulgar Economy in Marxian Garb: A Critique of Temporal Single System Marxism", Review of Radical Political Economics, V. 34, N. 4: 393-416.
  • Ernesto Screpanti (Jan. 2005) "Guglielmo Carchedi's 'Art of Fudging' Explained to the People", Review of Political Economy, V. 17, N. 1: 115-126.
  • Ajit Sinha (Summer 2009) "Book Review: Reclaiming Marx's 'Capital'", Review of Radical Political Economics: 422-427
  • Roberto Veneziani (2004) "The Temporal Single-System Interpretation of Marx's Economics: A Critical Evaluation", Metroeconomica, V. 5, N.1: 96-114.
  • Roberto Veneziani (Fall 2005) "Dynamics, Disequilibrium, and Marxian Economics: A Formal Analysis of Temporal Single-System Marxism", Review of Radical Political Economics, V. 37, N. 4: 517-529.


Anonymous said...

This topic is of interest to me, but I can't understand how the transformation problem is even a problem, since it assumes the rate of profit to be equal across industries, when this isn't true. The way that it isn't true, however, tends to support the thesis that capital-intensive enterprises are the most profitable, not that labor-intensive enterprise are. Indeed, I strongly suspect that Marx introduces the whole thing as a tautology when he defines value as dependent on "the average number of socially necessary hours of work time."

Ian Wright said...

@Will: You get a transformation problem without the assumption of equal rates-of-profit. It's just particularly clear in this simple case.


Anonymous said...


Thanks for the clarification.

Robert Vienneau said...

I don't have any quarrel with Ian's statement that one can formulate a transformation problem without assuming equal rates of profit across industry. I am not sympathetic with the idea that one shouldn't explore mathematical relationships among states that are never established.

Cockshott and Cottrell have published an article in The Cambridge Journal of Economics arguing that, empirically, the rate of profit is higher in industries that are more labor-intensive. (Kliman responded to this article, and Cockshott and Cottrell had a rejoinder.)

I've looked as Sam William's blog before. He tends to write longer blog posts than I'm willing to read in this format.

E. Bakkum said...

@ Hello,
You could add "Die Aktualitaet der Arbeitswerttheorie" (The actuality of the labor value theory) of Nils Froehlich to the list (Metropolis Verlag, 2009). It is actually a thesis. The paragraph on TSSI criticizes the concept of the MELT, in the spirit of Mohun and Veneziani. It also condemns the average profit rate, instead of an equilibrium one, perhaps because without equilibrium the markets do not clear and the labour value will depend on demand. His objections are not yet clear to me, but do not seem to be the ultimate rebuttal. The tone of the argument is funny: "The usefulness of this attempt is dubious. It is too obvious that the aim is to construct a system that will literally confirm the marxist theory. On the basis of the expounded coherences it may safely be assumed, that this aim is not a fruitful start for scientific progress".

Personally I find intriguing, that TSSI with several departments has a progressive redistribution of surplus value among the departments, namely each time that the production process is repeated. The conventional marxist interpretation seemed to be a one-time redistribution. I still have hopes about the TSSI.

The book of Kliman is useful, even if TSSI should not become the definite interpretation. It gives a clear overview of the present state of the art with the various models/exegeses. In fact a major problem for me is the lack of access to publications in papers and magazines. Some of the important ones can be accessed without cost on

Concerning the Okishio Theorem, since centuries there is the conviction that the marginal product of fixed capital should decrease due to the growing shortage of labour and floating (circulating) capital like raw materials. Marx was not a rebel and adhered to the economic main stream of his days.

Anonymous said...

i think it's a great idea to engage in this discussion, because i think that it boils down to a very fundamental question in economis: equilibrium (i would even go so far to say that there are certain strong connections with the cambridge capital controversy).
and if you think marx was an equilibrium-economist, than you'll probably find arguments against the TSSI.
my engagement with the TSSI led me though to the conclusion that traditional (simultaneist) equilibrium economics is just plain ridiculous.
have fun ^^ said...

@ Hello,
I am confused by the debate between Veneziani and Kliman, which unfortunately is increased further by the absence of Veneziani's papers on (free) internet. The only paper that in my view really makes sense is "The Recent Controversy on Marx’s Value Theory" (2010), by Changkeun Kim, Institute for Social Science, Gyeongsang National University (Korea). For instance, Veneziani contends that in a steady state the TSSI prices and values are equal - which he dislikes. Since a steady state in Veneziani's definition implies a constant Monetary Expression of Value (MELT), this statement seems trivial. For the TSSI implies a single system (SS) in which prices and values are simply coupled by the MELT. The MELT is the net added price value divided by the new incorporated labour time.

Apparently Veneziani has introduced the vector value equation h = p A / MELT + L, where h expresses the labour values of the commodities. This is the SS assumption or hypothesis that constant capital c = p A / MELT, that is, prices influence values. However, Veneziani also introduces a vector price equation p = p A + L MELT + d MELT. Here the MELT is assumed constant and d is apparently the deviation between values and prices, so d = p/MELT - h. Veneziani seems to be indignant that in TSSI d=0. Although this second equation is commonly accepted, this part of his argument is unclear. It seems to me, that in TSSI actually there is only one equation, namely p/MELT = p A / MELT + L, or in the formulation of Changkeun Kim p = (p A + (p b) L) (1+r), where as usual b is the physical basket of wage goods and r is the profit rate.

A further point of concern is Veneziani's assumption of a steady state, since in TSSI this is impossible. It seems that here Veneziani is adressing Simultaneous SSI and not TSSI. Actually the vector value equation should have been h(t+1) = p(t) A / MELT(t) + L(t), where t is the time variable, and this is indeed the expression reported in Froehlichs thesis. This was already clear for instance from Kliman and McGlones paper "The transformation
non-problem and the non-transformation problem" (1998), which on p.73 contains a concrete example of simple reproduction. Changkeun Kim criticizes Kliman and Freeman's paper (2009) "The Truthiness of Veneziani’s Critique of Marx and the TSSI", because on p.10 they derive a changing MELT that is supposed to keep the prices steady. This seems indeed nonsense, since in TSSI prices can usually not be steady. Changkeun Kim on his p.21 doesn't understand these remarks of Kliman and Freeman and neither do I.

Finally Veneziani complains about the possibility that in TSSI the MELT at the start of history is assumed to be positive. He thinks that may well have been negative. Frohlich follows Veneziani in this objection (although neither of them objects to the New Interpretation, which also defines the MELT in an arbitrary way). Again Changkeun Kim appeals to reason, and states that a negative MELT is inconceivable. Therefore the burden of the evidence should be with Veneziani. Changkeun Kim makes the inviting suggestion to derive the original MELT simply from the money commodity (i.e. gold).

In my perspective the TSSI is actually a price theory and not a value theory. The TSSI guarantees that the economic system is governed by a uniform average profit rate, because of p(t+1) = (p(t) A + w(t) L) (1+r(t)). The only remnant of the value theory seems to be the uniform surplus rate (rate of exploitation) in the economic system, which unlike the profit rate r(t) is independent of time. However, I am perfectly willing to be lectured.

Emil Bakkum said...

@ Hello again,
My previous message is somewhat inaccurate. The simple relation p/MELT = p A / MELT + L is only valid on the aggregate level. Of course value is redistributed between deparments, and as such TSSI prices and values differ. In other words, prices should conform to the mean profit rate. And although the surplus rate remains uniform in the whole economy, it is of course time-dependent. I found two free recent papers of Mohun on the website of the University of Muenchen (Munich). Here Mohun and Veneziani acknowledge the temporal (sequential) character of TSSI. Considering the reactions on the Veneziani 2004 paper, my tentative impression is that it has clouded the debate.

Robert Vienneau said...

Thanks for the references. I have downloaded the Changkeun Kim paper to read.

Anonymous said...

Another criticism of TSSI theory:

Emil Bakkum said...

It is my impression, that the definition of the MELT is not the most interesting aspect. In my own modest writings I assumed that the MELT of the TSSI was derived from the net product, just like in the NI. Some people object to this definition, because the MELT becomes negative in the rare cases where the monetary net product is negative. Therefore the TSSI adherents have opted for an alternative, which is not available for the NI. The TSSI is recursive, which allows to express the MELT in a recursive expression. The problem here is that the value of the MELT can only be fixed with a starting point, which theoretically is hard to find. In the past decade there was a fierce debate whether the start-MELT is necessarily positive. Apparently the scholars are searching for the exceptions where the TSSI becomes invalid. In addition it elicits endless philosophical discussions about the true marxist meaning of labour value. In my opinion this work should not have the highest priority. I am more interested in the dynamical behaviour, that is the consequence of the recursive nature of the TSSI. The results in this fields are scarce, but it seems that the dynamics of the TSSI are not purely chaotic. For instance, according to Rieu (much work is done in South-Korea, perhaps due to its Leninist neighbours) Dumenil and Levy have in the paper "The conservation of value" (2000) constructed a case where the labour value of a single commodity rises (to an upper boundary) for the case where the organic composition increases with time. They call this the productivity paradox. And in the case of multiple commodities in several departments there now exist various numerical examples where the labour value in one department rises to infinity, at the same time pushing the profit rate to zero. This is caused by the progressive redistribution of surplus value due to the different organic compositions. To me it seems imperative to analyse and classify these dynamic characteristics. Unfortunately, in the past decades the scholars preferred to concentrate their debate on textual dissections of the Marx works, with a biblical zeal that astounds and bores me. To put it mildly, this is not the most attractive side of marxist economics. On the other hand, these debates do increase the public conversance of the TSSI.

Emil Bakkum said...

Hello, The work of Nils Froehlich mentioned above is also relevant for the remark of Robert Vienneau concerning Cockshott/Cottrell. Froehlich has tested the statistical data of the German economy in 2004 against the labour theory of value (LTV). As usual the unproductive branches were removed from the empirical data. This is a clear procedure, although in my view rather arbitrary. He discovers that prices can be reasonably well explained by means of simple labour values. The agreement is even better, when a variable surplus rate among different branches is included. The empirical prices can also be explained in terms of the Sraffian model. In addition he calculated the Sraffian profit rate r (0.14+-0.09, median 0.11), the capital intensity q (12+-15, median 7), and the uniform surplus rate e (1.2+-1.0, median 0.8). His conclusions are twofold: (1) in a scatter plot of all branches there is a slightly negative correlation between the profit rate r and the capital intensity q; (2) There is a slightly positive correlation between the surplus rate e and the capital intensity q. The first conclusion negates the Sraffian model, which predicts a uniform profit rate r. And it agrees with the simple LTV (Volume one of Capital), which equates the profit and the surplus value. The second conclusion negates the simple theory of value, which assumes a uniform surplus rate e. Apparently the more capital-intensive branches compensate by means of a higher surplus rate. Therefore there is a certain transformation between values and prices, and the distribution of the profit rate r is narrower than the surplus rate e distribution. Since both the LTV and the Sraffa model explain prices with a similar precision, Froehlich prefers the LTV because of its simplicity. The work of Froehlich is in agreement with the results of Cockshott/Cottrell and Tsoufidis/Mariolis (Greece). It is worth mentioning that he also tested a distributional model of Farjoun and Machover. Frankly I don't know what to do with all these results. Can we still use labour values? Are the neoricardian and neoclassical models only mathematical playthings? Should theoreticians practise humbleness?

JDC said...


A development that may bear watching: Kliman responded to both of the CoCT posts on the TSSI I linked in the second comment (anonymously; I'll go by this nick henceforth).

Now the question is, will Jon or Sam deign respond in the comment boxes, or will we have to wait a month for a rejoinder in mammoth essay form?

Ian Wright said...

For those interested in a fully specified dynamic model of gravitation of prices and production (and its relation to labor-values) allow me to plug my own working paper here:

Although there's a lot to say, one problem with TSSI models is that they don't specify a coherent or believable dynamic adjustment process.


Ian Wright said...

Looks like the site mangled the URL. Trying again:

Robert Vienneau said...

Thanks for all the comments. Here is a clickable link to Ian's paper.

JDC said...


Just came across some additional background info focusing on Sinha's review of Reclaiming.

Here's Cockshott posting Kliman's response to several posts defending his book against some of the review's charges (both linked at the beginning).

Here is the Marxist Humanist Initiative site providing an overview of the claim that some of the review's content is misrepresentative to the point of being libelous and calling for retraction. At the bottom is a list of scholars chiming in to agree.

Finally, International Working Group on Value Theory has a page with links to a variety of pieces on the controversy, including an open letter calling for retraction, the response of the RRPE editorial board, and other related documents.

Figured you might find some interest to be had.

JDC said...

Oh, and just for the punchline:

Sinha appears to accidentally post what was supposed to be a private correspondence to a mailing list. Said post contains an extremely brief email from Kliman.

Apparently, Kliman is a real peach.

escaiguolquer said...

While there are a lot more literature about TSSI, both supporting and criticizing it, and i haven't been able to read it all, i am trying, and i already know rather well the issue.
Maybe the 2005's piece from Veneziani is the clearest attempt to discredit that point of view by means of distorting and juggling with it.
R Veneziani (2005): "Dynamics, disequilibrium, and Marxian economics: A formal analysis of temporal single-system Marxism", _Review of Radical Political Economics_ 37 (4), 517-529
I said that because in the same article you can see the arguments to answer Veneziani's claims: he is wrong not because of his misunderstandings, as long as he demonstrates that he understands TSSI quite well.

An (already old) article from Kliman-Freeman answer Veneziani and those who clap, edit and publish his tricks: (2009): The Truthiness of Veneziani’s Critique of Marx and the TSSI, Marxism 21 6:2, 335-366. There's also a reply to a non-answer from Mohun-Veneziani in Freeman & Kliman (2009) "No longer a question or truth?"
Up to date, Kliman's 2007 book _Reclaiming Marx's Capital: A refutation of the myth of inconsistency_ is the definitive work on the matter.