No, Rakesh, I'm just slow and preoccupied with other things. And a little like Moses Herzog (Bellow's novel): I write letters to people all the time (sometimes just in my head) that never get sent. I'm glad you put this on the list (actually, I didn't realize it was originally sent only to me). I'd like to get more people involved in these fundamental questions.
>This time the conflict became manifest as Baran and Sweezy were criticized
>for having repudiated Marx's value theory in their analysis of the monopoly
>capitalism (less investment due to monopoly power and underconsumptionist
>considerations even as the surplus rises from continuing cost reductions
>=>reduced effective demand and thus a tendency towards stagnation<=only
>partially couteracted by increasing commercial and distributive
>expenditures, which though raising demand for individual monopolists and
>expanding consumption does so at the expense of growing waste and
>irrationality analyzed in terms of Frankfurt School Critical Theory).
>
>Yet neither Sweezy nor Mattick (or Cogoy) wanted to hold on to the law of
>value as a theory of price determination.
Minor point: there is no Marxian price theory that I am aware of (like all classicals, he wasn't interested in such topics). Only if you want to immerse yourself in the esoterica of the "transformation problem" can you even try to construct one. An unproductive road to say the least.
>Moreover, Sweezy's objections to
>a "quantitative" law of value, such as they were, were not on the basis of
>its redundancy, a la the neo Ricardians, but to its limited applicability
>to a particular stage of capitalism. Baran and Sweezy were always more
>interested in how monopolisation transformed the accumulation process than
>repudiating value theory, yet how their theory squared with Marx's value
>theory was hardly clarified.
I think B&S were pretty clear about how their analysis differed from Marx's value theories. They replaced Marx's falling profit rate tendency with the realization problems resulting from the new law of a rising surplus in the monopoly stage, which was based on directly observable exchange relations. In response to the claim they B&S had rejected value theory, Sweezy later addressed your question directly (see "Monopoly Capital and the Theory of Value" Monthly Review, Jan. 1974, "Some Problems in the Theory of Capital Accumulation, MR, May, 1974, and "Competition and Monopoly" MR, May, 1981) Briefly, Sweezy explains that not only are values transformed into prices of production, as Marx (imperfectly) explained, but in the monopoly stage monpoly prices replace competitive ones through firms' ability to manipulate them (market power). Monopoly and monopoly pricing doesn't change the amount of value produced, but it does change the distribution of it. In two ways: (1) from competitive (smaller scale) capitals to monopolistic (larger scale) capitals, and (2) from wages to surplus value through price manipulation (inflation)(wages have to exceed subsistence for this to happen, but they do).
Monpoly capital produces a hierarchy of profit rates, as monopoly capitalists restrict capital flows between sectors, not a tendency toward the average rate, as Marx and others assumed. An average rate exists only in a statistical sense--it does not govern the distribution of surplus value throughout the system as was assumed in the competitive stage. Thus s/v, not s/c+v, is the key ratio to study. B&S go on to find both a rising surplus as a share of output and a declining share of the surplus being made up of property income. This leads to a detailed analysis of the realization problems of absorbing a growing surplus, stagnation tendencies, etc., as you indicate.
[NOTE TO DOUG AND JAY HECHT: A few weeks you guys had an exchange in which you agreed that military spending was a drag on accumulation (a "pathology in accumulation", in Doug's phrase), and even perhaps incompatible with long term development. Jay said that B&S called it "wasting the surplus". Well, they did say that, but they didn't mean what you imply (and in fact disagree with your thesis, as I do). For them, "wasting" the surplus is essential to realizing it and avoiding stagnation. In Marx's day, most all of surplus value was accumulated. Today many other ways must be found (investment outlets being dwarfed by the size of the surplus). Most alternatives are not as reliable as accumulation. Except for military spending, which not only regularly eats up a nice chunk and provides profits to contractors, but paves the way for US capital's dominance and exploitation globally. Sweezy, in fact, argues the opposite of what you imply; military spending is essential to continued prosperity (arguable, of course).]
Back to B&S. A minor reason for the attack on them in the 70s: their theory led mostly to stagnation, not revolution; there was no room for the working class. It was profoundly undialectical. There was some truth to these charges, but in my opinion, they were greatly misused back then.
In making their case, however, B&S discarded way too much of Marx, I think. They replace surplus value with "surplus", but never clearly define the new term (there are at least three different definitions of it Monopoly Capital, and they never settle on one). They substituted wages for productive labor subsistence (v), and tried to measure "the surplus" directly, rather than treating it as a residual. None of this was necessary in my view, and fact led to a probable UNDERestimate of the growth of surplus value (because. e.g., they miss the share of wages paid out of realized surplus value--the difference between wages and subsistence--the movements of which tell us a lot about what is going on because this increment of wages substantially after WWII until recently, when capital has succeeded in rolling back some of labor's gains). There is much that can be gained by combining Marxian value categories with B&S's analysis
Moreover, B&S's argument basing a rising surplus pretty much entirely on the entrance of a new, qualitatively different, monopoly stage, is too undeveloped, and, indeed, undialectical. In my view, competition and monopoly can be best thought of as dialectical opposites--each tending toward the other. B&S's reliance on monopoly and large scale organization to explain the rise in s is unconvincing. There is a lot more to it. One thing Sweezy himself lamented later in MR was the lack of analysis in Monopoly Capital of the crucial effect of the rise in debt. Sweezy has written a lot about it since.
>I think this raises the fundamental question not only of the logical
>consistency and non redundancy of Marx's value theory (on which Marxist
>economics is presently focused in its continuing boxing with Samuelson and
>Steedman) but also the question of whether capitalist developments
>themselves invalidate the law of value (such that there are no immutable
>laws even within capitalism).
Tricky question that requires more thought. But I'm not yet willing to put it that way. Capitalist development doesn't invalidate the law of value. The new directions taken do tend to invalidate, I think, many analyses using that law. Or at least some rethinking is required. The enormous growth of surplus has shifted, or should have shifted, ALL analyses to topics beyond the simple production and exchange process analyzed by Marx. The debt explosion adds further complexity. But how could I really understand either, and the contradictions they create, without first understanding Marx, and using his value categories to ground my thoughts? BTW, to repeat from before, there is no such thing as an immutable economic law. Only "laws" or vehicles for understanding created out of specific material conditions.
>Here let me raise another concern.
>
>In The Value Controversy Sweezy identifies as the fundamental problem of
>neo Ricardianism its inability to disclose the rate of exploitation or
>surplus value (Mattick would have agreed as well). Yet the rate of
>exploitation in the popular imagination conjures up images of adjusting
>work rates to maximum output levels through the assembly line.
This is the reason B&S give for replacing surplus value with surplus. The former is too identified with s/v in the production process (the direct struggle between capital and labor in production). They wanted to expand the focus to the new struggle over s realization that involves many other forces. This is, in my opinion, the major contribution of their book (it obviously better describes the world in which we live), despite the fact that the change was inadequately explained by them.
I hope you can make sense out of these discursive meanderings, Rakesh, or anybody. BTW, the latest issue of MR contains a debate between JB Foster and David McNally on Brenner. I haven't read it yet.