Freeman, Alan (1999): Between Two World Systems: A Response to David Laibman. Published in: Research in Political Economy No. 17 (April 1999): pp. 241-248.
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Prepublication version of article that appeared as Zarembka, P (ed) Economic Theory of Capitalism and its Crises, Research in Political Economy 17, pp241-48. Stanford, CT: JAI Press. http://www.elsevier.com/wps/find/bookdescription.cws_home/621298/description#description This article formed part of a four-way exchange on the rate of profit which appeared in Research in Political Economy in 1999 and 2000, between David Laibman, Duncan Foley, Andrew Kliman and Alan Freeman. This piece constituted Freeman’s response to an initial critique by Laibman of the Temporal Single System Interpretation (TSSI) of Marx’s value theory. Applying an alternative valuation to the TSSI, he shows that a rising rate of profit can be deduced where the TSSI finds a falling one; and concludes that temporalism cannot be responsible for TSS results. This is of course true: a falling value profit rate arises from the specific combination of temporalism and valuation by the magnitude of labour time. However Laibman accepts the most important conclusion of TSSI research, namely, it refutes Okishio’s theorem, according to which under no circumstances can the rate of profit fall with cost-saving technical change. Since SSI results exhibit such a circumstance, the theorem is false. My response goes further to establish the precise conditions under which the value rate of profit falls: The maximum profit rate falls if the value invested, as a proportion of the value of accumulated capital, is greater than the rate of increase in living labour. The response also demonstrates that simultaneous valuation results in a violation of the principle that value can arise only from production, a principle preserved in the TSSI derivation of value.
|Item Type:||MPRA Paper|
|Institution:||The University of Greenwich|
|Original Title:||Between Two World Systems: A Response to David Laibman|
|Keywords:||TSSI; MELT; value; Marx; price; profit rate; Okishio; non-equilibrium; equilibrium; money; sraffa|
|Subjects:||B - History of Economic Thought, Methodology, and Heterodox Approaches > B5 - Current Heterodox Approaches > B51 - Socialist; Marxian; Sraffian
B - History of Economic Thought, Methodology, and Heterodox Approaches > B4 - Economic Methodology > B40 - General
B - History of Economic Thought, Methodology, and Heterodox Approaches > B1 - History of Economic Thought through 1925 > B12 - Classical (includes Adam Smith)
B - History of Economic Thought, Methodology, and Heterodox Approaches > B0 - General
B - History of Economic Thought, Methodology, and Heterodox Approaches > B1 - History of Economic Thought through 1925 > B14 - Socialist; Marxist
A - General Economics and Teaching > A1 - General Economics
B - History of Economic Thought, Methodology, and Heterodox Approaches > B5 - Current Heterodox Approaches > B50 - General
B - History of Economic Thought, Methodology, and Heterodox Approaches > B2 - History of Economic Thought since 1925 > B24 - Socialist; Marxist; Sraffian
|Depositing User:||Alan Freeman|
|Date Deposited:||13. Jan 2008 05:20|
|Last Modified:||20. Feb 2013 07:55|
Foley, D. (1982). ‘Realization and accumulation in a Marxian model of the circuit of capital’. Journal of Economic Theory 28(2): 300-319. Foley, D. (1986). Money, Accumulation and Crisis. New York: Harwood Academic. Foley, D (1997) Review of Freeman, A and Carchedi, G (1995), Eastern Economic Journal 23:4, 493–96. Foley, D. (1999). Response to David Laibman, Research in Political Economy 17, 229–33. JAI Press Foley, D.. (2000). Response to Freeman and Kliman, Research in Political Economy 18, 279–83. JAI Press Freeman, A. (1996) “Price, value and profit – a continuous, general, treatment” in Freeman and Carchedi (1996) (eds) Marx and Non-Equilibrium Economics Freeman, A. (1999). Between Two World Systems: A response to David Laibman, Research in Political Economy 17, 241–48. Freeman, A (1998) “An endogenous profit rate cycle”, presented to the 1998 conference of the International Working Group on Value Theory, New York, February 1998 Freeman, A and Carchedi, G (1995) (eds) Marx and non-equilibrium Economics, Aldershot: Edward Elgar Freeman, Alan and Andrew Kliman. (2000). Two Concepts of Value, Two Rates of Profit, Two Laws of Motion, Research in Political Economy 18, 243–67. Kliman, Andrew and Alan Freeman. 2000. Rejoinder to Duncan Foley and David Laibman, Research in Political Economy 18, 285–93. Marx (1972), Theories of Surplus Value Volume III. London:Lawrence and Wishart Okishio, Nobuo (1961) “Technical Change and the Rate of Profit”, Kobe University Economic Review, 7, 86-89.