tag:blogger.com,1999:blog-26706564.post524658563911903728..comments2024-03-25T07:51:47.758-04:00Comments on Thoughts On Economics: Engels to Sombart in 1895Robert Vienneauhttp://www.blogger.com/profile/14748118392842775431noreply@blogger.comBlogger8125tag:blogger.com,1999:blog-26706564.post-414096798735389512024-01-23T14:56:06.286-05:002024-01-23T14:56:06.286-05:00To the commenter named Blissex,
I'm an editor...To the commenter named Blissex,<br /><br />I'm an editor at Strange Matters, a socialist journal friendly to the heterodox schools of economics and engaged in research on the origins of money where money is defined precisely as accounting. Your comments were supremely interesting, and I am very keen to discuss the possibility of publishing your writing on accounting (we pay quite competitive rates for a magazine of our size). Please be in touch at jmc[at]strangematters[dot]coop.John Michael Colonhttp://strangematters.coopnoreply@blogger.comtag:blogger.com,1999:blog-26706564.post-77085874904000616572021-06-19T10:05:34.024-04:002021-06-19T10:05:34.024-04:00«recommend to our blogger to take accounting and c...«<i>recommend to our blogger to take accounting and cost accounting much more seriously</i>»<br /><br />There aren't that many "history of accounting" books, and one of the most recent is pretty good, Jacob Soll's "The Reckoning: Financial Accountability and the Rise and Fall of Nations”:<br /><br />https://www.bloomberg.com/news/articles/2014-05-01/how-accounting-stop-groaning-will-save-the-world<br /><br />It however has some limitations to be kept in mind:<br /><br />* As the title says, focuses a bit too much on national accounts.<br /><br />* It focuses too much on the early history of accounting.<br /><br />* Therefore it makes a really big deal of double-entry accounting, and is light on the really big issues, which are multi-project and multi-period (cost) accounting.<br /><br />NB: My background includes living in countries where accounting is a creative, adventurous, swashbuckling activity, and has been for most of history, this perhaps has influenced me. When I read company accounts, which I do sometimes for entertainment, I can be riveted by their narrative creativity and the dazzling techniques displayed (even if almost always the "whodunit" bits are related to depreciation, that is to multi-project, multi-period cost accounting).Blissexnoreply@blogger.comtag:blogger.com,1999:blog-26706564.post-54937289724347426732021-06-19T09:50:29.048-04:002021-06-19T09:50:29.048-04:00«and cannot figure out if I am or am not a support...«and cannot figure out if I am or am not a supporter of Marx's law of value.»<br />«<i>and "joint production" also known as in some remote corners of the world as "production of commodities by means of commodities" is a very interesting topic.</i>»<br /><br />As to this, I am feeling as usual wistful, and wasteful, so I will wastefully and wistfully recommend to our blogger to take accounting and cost accounting much more seriously:<br /><br />* Accounting is the very basis of civilization, to the point that mathematics and writing were invented for that purpose.<br /><br />* An accounting focused is indispensable for understanding properly (if it is possible) the issues of "joint production", in particular cost accounting.<br /><br />* There are deep intellectual issues in accounting, in particular as to multi-project accounting and multi-period accounting (that is accounting beyond a single "venture" as it used to be called), in particular as to cost accounting (and even more specifically as to amortization aka depreciation), a truly intellectually challenging topic.<br /><br />A lot of Marx and Sraffa and much else besides are based on "reinventing" accounting and cost accounting, and a lot of "neoclassical" Economics is based on a determination to hand-wave away accounting issues, and in particular cost accounting issues. The legendary "Cambridges Capital Controversy" is perhaps best understood as a cost accounting controversy... I would say that, wouldn't I? :-).<br /><br />NB: I am not accountant, my academic background is both political economy and engineering, so I am naturally predisposed to have a multidimensional view of the political economy, including viewing it as a giant "factory", as well as than as a "market", and a "factory" that engages in multi-project, multi-period production, thus requiring accounting (and cost accounting) insights. Maybe I learned to take accounting vary seriously because my father was a certified accountant after studying political economy (a long, long time ago) and talking with him and reading the many books he had collected gave me valuable (or so I think) information. I am sad that I no longer have the ability to tell him how much I appreciated that.Blissexnoreply@blogger.comtag:blogger.com,1999:blog-26706564.post-74517960575469140022021-06-19T09:21:48.740-04:002021-06-19T09:21:48.740-04:00«Marx was not focused on relative prices»
My gues...«<i>Marx was not focused on relative prices</i>»<br /><br />My guess is that he was rather more focused on the quantification of plusvalue, by using cost accounting in terms of labor, and its distribution into wages for sellers of labor-power and surplus value for their employers.<br /><br />«<i>and cannot figure out if I am or am not a supporter of Marx's law of value.</i>»<br /><br />The point of using the "Labor Definition of Value" (rather than "Law" or "Theory") is the same as that of any other concept in insight: whether focusing on it to the exclusion of something else is fruitful of useful insights. As to that my guess is that cost accounting on the basis of the "Labor Definition of Value" does indeed lead to useful insights, as "Labor" is a much more relevant basis for that cost accounting than "beauty" or "fame" etc.<br /><br />However I find it less useful to investigate distributional issues, the purpose of marxian analysis, because his "exploitation" argument is a trivial consequence of the "Labor Definition of Value": if it is assumed by definition that the "value" of commodities is the "labor of free person", then it is immediately obvious that under that definition any "free person" who is consuming commodities without contributing "labor" is an exploiter. There is no need to write several hundred chapters, books, articles, to "prove" it with clever arguments and models; the conclusion is implicit in the definition.<br /><br />Also the argument can be easily reversed: if we define "value" as "capital contribution" it is immediately obvious that all workers that are paid more than subsistence wages are exploiting their employers. The argument that capital cannot exist without labor can be also exactly reversed, by pointing out that for example given capital in the form of a corn field, labor providers could not be alive without the produce of that capital.<br /><br />Of course the questions of "what comes first, labor, capital, land?" is not that interesting, and "joint production" also known as in some remote corners of the world as "production of commodities by means of commodities" is a very interesting topic.Blissexnoreply@blogger.comtag:blogger.com,1999:blog-26706564.post-34304076682984799542021-06-19T08:44:57.587-04:002021-06-19T08:44:57.587-04:00Just so you can click. This is, I guess, a history...Just so you can click. <a href="http://dx.doi.org/10.1177/0486613421997573" rel="nofollow">This</a> is, I guess, a history of how the transformation problem has been interpreted in China.<br /><br />I think that Marx was not focused on relative prices and cannot figure out if I am or am not a supporter of Marx's law of value.<br />Robert Vienneauhttps://www.blogger.com/profile/00872510108133281526noreply@blogger.comtag:blogger.com,1999:blog-26706564.post-72465679802050867202021-06-19T03:55:06.422-04:002021-06-19T03:55:06.422-04:00Also many thanks for quoting that letter, which is...Also many thanks for quoting that letter, which is quite interesting, because it shows that Marx had a clear notion of the concept of "emergent behcviour" in systems, which did not reduce to Adam Smith's earlier example of the "invisible hand".<br /><br />There are many lovely point, for example "<i>believe I have done my duty by presenting Marx in Marx's words, even at the risk of requiring the reader to do a bit more thinking for himself</i>", but in particular "<i>his way of viewing things is not a doctrine but a method. It does not provide ready-made dogmas, but criteria for further research and the method for this research.</i>" because it looks like a point I like to make, that betweeen "sciences" that study immutable (as far as we know...) natural laws, and "arts" that are about subjective expressions of taste, there are what I call "disciplines", like in different degrees medicine, political science, history, which are about systematic approaches to fuzzy and context dependent subjects, that change but slowly enough that systematic approaches are fruitful.<br /><br />As to that there is an interesting quote from JM Keynes about "disciplines":<br /><br />http://www.ecn.ulaval.ca/~pgon/hpe/documents/econometrie/Keynes1939.pdf<br />“Put broadly, the most important condition is that the environment in all relevant respects, other than the fluctuations in those factors of which we take particular account, should be uniform and homogeneous over a period of time. We cannot be sure that such conditions will persist in the future, even if we find them in the past.”Blissexnoreply@blogger.comtag:blogger.com,1999:blog-26706564.post-65535356729469214822021-06-19T03:28:57.103-04:002021-06-19T03:28:57.103-04:00«If somebody started going on about a theory of va...«<i>If somebody started going on about a theory of value, without context, [...] what things are or should be worth in some moral sense.</i>»<br /><br />That word "worth" is fairly critical here. In the history of political economy thinking there have been some core problems, and one of those has been the problem of what determines the *prices* of commodities, and the intuition of early political economists was that it was related to "intrinsic worth" of those commodities, so the two question arose: what is the "intrinsic worth" of commodities, and by what mechanisms "prices" settle around the "intrinsic worth" of commodities. At that time commodities were mainly made by farms, and by servants, so the obvious guesses were that "worth" was determined by the fertility of land ("physiocrats"), because more land means more commodities, or that it was determined by the labor of servants ("classicals"), because more servants more commodities.<br /><br />But while it appears that Marx follows the latter line, from the point of view of Marx "value" is simply *defined* as the labor of free people, because he is interested in the cost accounting of that labor, because he wants to investigate the distribution of that labor between employees and employers.<br /><br />One could similarly define "value" as "beauty" if one believes "beauty" is what matters as to "worth", or one was interested in cost accounting of "beauty" to investigate the distribution of "beauty" in society, and similarly for "fertility", "goodness" or "luck" or "taste" or "fame" or whatever.<br /><br />Put another way, the political economy and "worth" are a multidimensional phenomenons, and Marx was interested in their section/projection on the "labor of free men" axis because his purpose required that.<br /><br />The wider question of political economy is that if we must have models that are "stylized facts" as that guy said, of of the many dimensions in which it exists which ones are the most insightful to keep in the model, dropping all others, and in particular for example which are needed to account for prices. But I guess that is not what Marx mainly was about.Blissexnoreply@blogger.comtag:blogger.com,1999:blog-26706564.post-61467670602997031752021-06-14T11:43:04.083-04:002021-06-14T11:43:04.083-04:00A different historical transformation problem
htt...A different historical transformation problem<br /><br />http://dx.doi.org/10.1177/0486613421997573Anonymousnoreply@blogger.com