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/leftypol/ - Leftist Politically Incorrect

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File: b838acfe0120de9⋯.png (318.94 KB, 500x500, 1:1, cheeki-breeki3.png)

 No.2930357

Thoughts on marginalism? Is it true that William S. Jevons, one of the founders of marginalisim, created it to prove the LTV and to build upon it?

What about people who claim (within reason) of Cockshott incorrectly using regression analysis in one of his works? I dont have a super high amount of confidence in Marxism considering im a hasbin liberal. I do know however that the neoclassical model cant really determine value, but it can determine price.

 No.2930430

>>2930357

>. I do know however that the neoclassical model cant really determine value, but it can determine price.

How can you determine one without the other? People primarily price things based off their value, even if you hold this value to be a subjective thing dependent on the particularities of each individual, don't they?


 No.2930462

>>2930357

>What about people who claim (within reason) of Cockshott incorrectly using regression analysis in one of his works?

yeah ive seen that thread, the persons claim is basically decontextualizing cockshott's argument. The reason Cockshott addresses other possible 'objective' sources of value other than labor is that hes responding to left-sraffian critics of Marxism like Ian steedman who said the LTV was flawed because any commodity could be substituted for Labor (ex: 'corn theory of value') and still have an internally consistent theory of value. cockshott doesn't deny this but says that empirically/statistically, labor has the highest correlation and therefore is the most correct.

Again, none of this has any relevance, the persons gripe that cockshott 'misuses regression analysis' is basically because cockshott was not even arguing against neoclassical economics in that, he was arguing against left neo-sraffian economics.

>Is it true that William S. Jevons, one of the founders of marginalisim, created it to prove the LTV and to build upon it?

All 19th century economists were probably familiar with the LTV, however i dont know anything about jevons creating marginalism to prove the ltv.

> I do know however that the neoclassical model cant really determine value, but it can determine price.

It can't determine price. That's because at any moment we can only make one observation in an economic exchange, an neoclassical economics explains price as the intersection of demand and supply curves which are essentially invented by the neoclassical economists. The supply and demand curves aren't observable

see cockshott's criticism of neoclassical economics here:

https://paulcockshott.wordpress.com/2016/07/23/not-even-wrong/

https://paulcockshott.wordpress.com/2018/09/30/from-the-sublime-to-the-ridiculous/


 No.2930603

File: e6a683df5e77089⋯.png (178.26 KB, 631x919, 631:919, labortheory.PNG)

>>2930430

>How can you determine one without the other? People primarily price things based off their value, even if you hold this value to be a subjective thing dependent on the particularities of each individual, don't they?

I worded that horribly, price is based on value but it is not value itself. correct?

>>2930462

>All 19th century economists were probably familiar with the LTV, however i dont know anything about jevons creating marginalism to prove the ltv.

https://mises.org/sites/default/files/The%20Theory%20of%20Political%20Economy_2.pdf

(pic related)

>It can't determine price. That's because at any moment we can only make one observation in an economic exchange, an neoclassical economics explains price as the intersection of demand and supply curves which are essentially invented by the neoclassical economists. The supply and demand curves aren't observable

Dosent that mean that neo-classical econ is basically useless because the whole "price = value" conundrum?


 No.2930624

>>2930462

>yeah ive seen that thread

was it this one?

https://www.reddit.com/r/AskEconomics/comments/9kjuys/does_cockshott_prove_the_labor_theory_of_value/

>The reason Cockshott addresses other possible 'objective' sources of value other than labor is that hes responding to left-sraffian critics of Marxism like Ian steedman who said the LTV was flawed because any commodity could be substituted for Labor (ex: 'corn theory of value') and still have an internally consistent theory of value. cockshott doesn't deny this but says that empirically/statistically, labor has the highest correlation and therefore is the most correct.

What about this?

http://bnarchives.yorku.ca/308/2/20101200_cockshott_nitzan_bichler_testing_the_ltv_exchange_web.htm


 No.2930728

File: b745a44d1a86093⋯.png (310.78 KB, 600x400, 3:2, ClipboardImage.png)

>>2930462

>corn theory of value


 No.2930789

>>2930603

>Dosent that mean that neo-classical econ is basically useless because the whole "price = value" conundrum?

Neo-classical econ IS useless if your goal is to actually apply it and get a predicted result. However, it is very useful for mystifying econ and making up bullshit explanations for policy that mask underlying motives.


 No.2931218

Bumping the thread since I'm interested in seeing a response to the 'capital as power' theorists.


 No.2931284

>>2930789

>Neo-classical econ IS useless if your goal is to actually apply it and get a predicted result.

In the thread I was mentioning earler, some neolibs basically claimed that you can get the same results as cockshott by applying marginal utlility which didnt really make any logical sense because the ltv looks at total value vs labor output as compared to "satisfaction units" within marginalism


 No.2931478

Marginalism wasn't created by Jevons, the subjective value theorists just combined marginalism with value theory and use value. Marginalism originated with Ricardo's theory of rent, which showed that the price of corn was always identical to the cost of growing in the least productive plot of land.


 No.2931491

>>2930603

>>2930430

Maybe this will help clear things up.

https://bunkermundo.wordpress.com/2019/06/27/value-theory-classical-vs-neo-classical-thought/

Value theory is and always has been a theory of price, but its a theory of the "natural price", the long term average equilibrium. The neoclassical model can predict short term price well, that's basically a tautology, but its not good at predicting the equilibrium, the ratio between prices created when supply moves to meet demand. this is when price becomes totally determined by social relations of production.


 No.2931496

>>2930789

This. Neo-classical economics isn't used for actual capitalist decision making, it's just ideology.


 No.2931575

File: d5255794694fa15⋯.png (3.7 MB, 1400x2225, 56:89, 27a42b023f635fd46ebc7093c3….png)

so capitalism was created using the LTV yet we use a pure ideological framework (STV) today to analyze it?


 No.2931580

I live near George Mason University in Fairfax Virginia. I'm pretty sure it's a hyper capitalist College.


 No.2931585

>>2931575

Shaikh makes a very good point about this kind of thing in one of his lectures on international trade. He points out that the European economies got rich during CENTURIES of protectionism, and then embraced Ricardo's (completely disproven) theory that trade deficits and surpluses would naturally balance out through trade. Then they pressure all 3rd world countries to stop protectionist policies, using comparative advantage as a justification! So these countries didn't practice what they preach of course, but the ideology is useful to them.

Even though Smith and Ricardo were the leading theorists of political economy, even before Marx, capitalists saw the danger of economic science (such as LTV, LTRPF, etc). Worker's movements had already caught on. That's why Marx spends so much of Capital Volume 1 attacking the "vulgar economists" who have wildly distorted and covered up classical econ even in his time. It's wrong to say that either LTV or STV actually informs the practice of investors/businessmen very much, since they just focus on costs and profits and other basics like that (Marx gets into this in Vol 3). Their practical viewpoint results in a loose theory that is not wrong, but is really narrow and limited. It could be viewed as a subset of classical econ, but classical econ is really based on scientific investigation of this practice.


 No.2931696

>>2931585

>Even though Smith and Ricardo were the leading theorists of political economy, even before Marx, capitalists saw the danger of economic science (such as LTV, LTRPF, etc). Worker's movements had already caught on. That's why Marx spends so much of Capital Volume 1 attacking the "vulgar economists" who have wildly distorted and covered up classical econ even in his time.

Tell me more, now you got my full attention

>It's wrong to say that either LTV or STV actually informs the practice of investors/businessmen very much, since they just focus on costs and profits and other basics like that (Marx gets into this in Vol 3).

Can you expand on this? I also want some info to rub into neolibs faces when they get cocky about muh basic econ and muh marginalism.

I feel like the reason why marginalism is taught is because its a pretty vague concept that allows for people to worm their way out of the tougher questions like "where does value actually come from?" or "even if supply and demand was a thing, how can you get a starting price to base your equation off of?".


 No.2931717

>>2931696

>Tell me more, now you got my full attention

You could just read Capital Vol 1 to know what I'm talking about, but here's a bit from, I think, the Soviet encyclopedia:

"The first industrial crisis (1825) and the first few armed uprisings of the proletariat during the 1830’s revealed the contradictory, transitory character of bourgeois relations. As a result, the tasks which bourgeois political economy had set itself were radically altered. “It was henceforth,” wrote K. Marx, “no longer a question whether this theorem or that was true, but whether it was useful to capital or harmful, expedient or inexpedient, politically dangerous or not. Pure, selfless research gave way to battles between hired scribblers, and genuine scientific research was replaced by the bad conscience and the evil intent of apologetic” (K. Marx and F. Engels, Soch., 2nd ed., vol. 23, p. 17).

"Vulgar political economy replaced classical bourgeois political economy, which within certain bounds had provided scientific analysis of capitalism but which by virtue of its class-based bourgeois narrow-mindedness was not able to overcome the vulgarizing element in its theories, an element which was later used by the vulgarizing theoreticians. The establishment of the dominance of vulgar political economy marked the beginning of the crisis in bourgeois political economy.

"The development of vulgar political economy is characterized by four basic stages: its origin in the form of a separate trend at the turn of the 19th century (T. R. Malthus and J. B. Say); its conquest of the dominant positions in bourgeois political economy and evolution during the period of free competition from the 1830’s to the 1870’s (J. Mill, N. W. Senior, F. Bastiat, W. Roscher, B. Hildebrand, and H. C. Carey); its continuation during the period of imperialism, from the 1870’s to the 1920’s (the subjective-psychological school including E. Boehm-Bawerk of Austria, A. Marshall of Great Britain, and J. B. Clark of the USA); the Newer (Younger) Historical School of K. Bücher and G. Schmoller of Germany; and the legal school represented by R. Stolzmann of Germany; and finally its development during the period of the general crisis of capitalism (J. Schumpeter, F. Hayek, L. Mises, W. Rostow, P. Samuelson, and others)."

https://encyclopedia2.thefreedictionary.com/Vulgar+Political+Economy

As for the worker's movements, I don't have a citation or anything, but the LTV was regularly used by them to argue for workers getting the "full value of their labor," prior to Marx's writing. He was deliberately trying to revive that kind of agitation and also enhance it with his own theory and more rigor.

>Can you expand on this? I also want some info to rub into neolibs faces when they get cocky about muh basic econ and muh marginalism.

Businesses don't obey mainstream econ theory at all. Shaikh talks at length about this, but Wolf (a much weaker theorist) also mentions this a lot. What they teach in business school is directly contradictory to what's taught in the econ departments! For example:

- businesses compete with each other by reducing their costs and then cutting prices to beat the competition. neo-classical theory says that the markets GIVE businesses their prices, and then they just optimize costs and output to make the most profit at the given price.

- businesses do not include PROFIT as a COST, as they understand that it is possible to make no profits and go out of business. On the other hand, the neo-classical model holds that a standard rate of profit (opportunity cost) is actually part of the costs!

- businesses do not have U-shaped cost curves. I honestly do not really know or care why the neo-classical cost curve model is U-shaped, but the important thing is that real cost curves are based on actual working conditions, shifts specifically. Costs per unit output are higher at the beginning of a shift (warmup), lower in the middle, lower near the end, and then approach infinity (theoretically) during the chaos of shift change or shutdown. The costs may also be higher depending on time of day and things like that.


 No.2931816

File: 6b1a236b3bafe05⋯.jpg (54.65 KB, 600x450, 4:3, slav.jpg)

>>2931717

all these things you responed with to >>Can you expand on this? I also want some info to rub into neolibs faces when they get cocky about muh basic econ and muh marginalism.

are actually fully helping me understand my confusion. I never really thought about why there was different classes for business and economics. That fact has really been on my nerves for a while. Also, can you link me some of Shaikhs lectures?

>“It was henceforth,” wrote K. Marx, “no longer a question whether this theorem or that was true, but whether it was useful to capital or harmful, expedient or inexpedient, politically dangerous or not. Pure, selfless research gave way to battles between hired scribblers, and genuine scientific research was replaced by the bad conscience and the evil intent of apologetic”

Marx was one of the most based people in existence, hopefully with the coming capitalist bubble, we can see the law of value actually being used in the mainstream again


 No.2931831

A+ thread, good shit /leftypol


 No.2931846

>>2931717

>businesses do not have U-shaped cost curves. I honestly do not really know or care why the neo-classical cost curve model is U-shaped,

Suppose a fixed ratio of inputs to make a unit of whatever thing you want to produce. Suppose you don't have perfect knowledge of how many units you will try to produce at this or that time in the future. Some inputs are easy to get on short notice, some are hard or impossible to get quickly. Some costs you have like renting a place are decisions that tie you up in long-term contracts, others are more ad hoc. So you have big fixed costs just for renting the place and so on, and you have variable costs that rise proportionally with how frequently you put out a unit of the thing you make, together that makes falling per-unit costs, but that only works within some range, increasing the frequency more and more above that makes you run into spatial etc. issues, so beyond some point you have rising costs per unit. U-curve.

>but the important thing is that real cost curves are based on actual working conditions, shifts specifically. Costs per unit output are higher at the beginning of a shift (warmup), lower in the middle, lower near the end, and then approach infinity (theoretically) during the chaos of shift change or shutdown.

That's describing a U-shaped cost curve, it just isn't symmetric and looks more like the Nike swoosh.


 No.2932179

bump


 No.2932197

Any economists on here that want to talk about marginalism or responding to the capital as power theorists?


 No.2932246

File: 9862a1c5abb9aea⋯.jpg (70.14 KB, 690x505, 138:101, 9862a1c5abb9aeaa6be32a4a70….jpg)

File: 76af3a7fafb8276⋯.png (32.85 KB, 645x367, 645:367, not u shaped.png)

>>2931816

Absolutely, here's Shaikh's full lectures for his book:

https://www.youtube.com/playlist?list=PLB1uqxcCESK6B1juh_wnKoxftZCcqA1go

And his book (PDF):

http://booksdescr.org/item/index.php?md5=DD0B27231F6E7CABEF184B616A59DAFE

Keep in mind it is a grad level course and it's easier to approach if you have read Capital already.

>>2931846

See 2nd pic, it is the actual cost curve from a study of auto factories. There's no way you can construe that as U-shaped, even for a single shift. This is a screenshot from Shaikh's book, chapter 4.III, which you can read to see how it contrasts with the neo-classical U-shaped curve which is derived from totally fictional theory.


 No.2932375

Why did no-one talk about the 'capital as power' theorists mentioned in >>2930624 ? I'm still interested in that. I personally feel that it's a broader approach on sociological terms than the usual focus on a specific aspect of economics, and Zizek talks about how what Marx's innovations in economics can be found as far afield as psychoanalysis and stuff like that. I want to know what responses there might be to these alternative theorists who claim to be arguing against 'Marxism'.


 No.2932379

>>2932375

The capital as power theorists think that both labor theory and subjective theory are wrong because theyre both dogmatic. They think that value isnt an actual thing because for some reason it cant be measured in socially necessary labor time or something and that utils are made up bullshit because they cant be measured. They also tried to make it very clear that they think that cockshott is full of shit in that paper I linked.


 No.2932460

>>2932246

>See 2nd pic, it is the actual cost curve from a study of auto factories. There's no way you can construe that as U-shaped

Shaikh seems to be talking there about the unit costs changing over the working day. The neoclassical U-curve isn't supposed to be a path that you fully trace over time, it's more like this: Given these fixed costs you have, if you produce this or that amount this day, you will have these or those unit costs.

>>2932375

>the 'capital as power' theorists

I read those guys years ago because they had promised $$$ to anybody disproving them. But there was nothing in there that could be tested. Pomo garbage.


 No.2932521

Soviet critique of marginalism:

>According to the marginal utility theory, the value (exchange value) of any material good is determined by its marginal, i.e. its minimum utility. By the utility of things the authors of this theory understood not the objective property of commodities to satisfy some particular social need in the actual conditions of commodity production, but their subjective psychological evaluation by people in the unusual circumstances in which they possessed a certain stock of some material goods and could not freely reproduce or exchange them for other goods. The subjective theory of value ignores the social character of production, denies the existence of objective economic laws and depicts each producer of material goods as a man living in complete isolation from society. Thus Bohm-Bawerk, for example, put his "economic man" in a hut, standing alone in a primitive forest. This settler had at his disposal five sacks of corn, one of which he needed in order not to starve to death, another to improve his diet, a third to feed his domestic animals, a fourth to make schnapps, and the fifth to feed parrots for amusement. It was this last, fifth sack, that gave its owner the lowest utility, that supposedly determined the exchange value, or value, of corn. "The magnitude of the value of a material good" Bohm-Bawerk concluded, "is determined by the importance of the actual need (or partial need) which occupies the last place in the series of needs, satisfied by all available stocks of material goods for the given type… The value of a thing is measured by the magnitude of the marginal utility of the thing. This is the central point in our theory of value. Everything else is connected with it and is concluded from it" Consequently, the more commodities there are, the lower their supposed utility, and the lower their value; conversely, the fewer commodities there are, the greater their utility and value. Trying to "improve" the marginal utility theory, the American bourgeois economist J. B. Clark and his followers began to assert that the value of a good was determined by society as a whole and that its utility for individuals was a reflection of its social utility. The modern American economist Paul A. Samuelson has his own way of trying to develop the marginal utility theory. Taking it as indisputable that the utilities of things, or their use values, are incomparable, he deduced mathematically, from an infinite series of the marginal utilities of individual commodities, a certain average marginal utility per -dollar of income, or what has been called the law of equal marginal utilities per dollar. This law supposedly serves as the basis for comparing the useful properties of different goods as exactly proportional to their prices. Engels showed the marginal utility theory to be unconvincing as soon as it appeared, calling it the "theory of unlimited disutility". Its fundamental methodological weakness is that it is obviously idealistic in nature, since it deduces the objective economic category of commodity production-value from he consciousness and psychological feelings of people, taken in isolation from concrete social relations and real life. Price formation under the actual conditions of commodity production is in fact subjected, in the final analysis, to economic laws that operate irrespective of human will and consciousness. The subjective evaluations of material goods by people of different social background cannot be the same: what seems cheap to the capitalist is considered dear by the worker, and unattainable by the unemployed.

Source: https://archive.org/details/PoliticalEconomyCapitalism


 No.2932562

>>2932460

just go ahead and read the chapter I cited


 No.2933572

>>2932379

I don't yet understand the statistical wizardry they used to claim that which is why I'm asking about it.

>>2932460

To me it seems like they're recycling banalities which can themselves be more-or-less quantified in the context of a capitalist economy and also can follow directly from Marx's political assertions about capital.


 No.2933579

>>2932562

Had done that before writing the answer.


 No.2937861

>step guide for how to test marginal productivity theory and guarantee that the theory succeeds:

>1. Find an income-accounting equation that is true by definition.

>2. Forget that you are dealing with an accounting equation.

>3. Pick a form of income (in your equation) that you want to explain.

>4. Given your choice, look at the opposite side of your accounting equation.

>5. Convince yourself that this opposite side no longer measures income. It now measure output.

>6. Regress the two sides of your accounting equation.

>7. Celebrate when you find a strong correlation.

>8. Claim you that have found evidence that productivity explains income.

>9. Never tell anyone that your results were guaranteed because they followed from an income-accounting equation. (This step is unnecessary if Step 2 is successful).

https://economicsfromthetopdown.wordpress.com/2019/07/08/no-productivity-does-not-explain-income/


 No.2937866

File: 1a4b5188c0a0934⋯.jpg (20.86 KB, 480x360, 4:3, hqdefault[1].jpg)

>>2930357

>I do know however that the neoclassical model cant really determine value, but it can determine price.


 No.2937950

File: 8e56abeb2364f34⋯.jpg (58.19 KB, 435x601, 435:601, 8e56abeb2364f34b83fe52852e….jpg)

>>2937866

Chill man, I was once a lib. I'm still a basic bitch econ student though.




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