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The limits of Ricardian value: law, contingency and motion in economics

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  • Freeman, Alan

Abstract

This paper discusses the relation between law and contingency in the formation of value. It begins from a much-ignored assertion of Marx, repeated throughout his works, that the equality of supply and demand is contingent and their non-equality constitutes their law. This highly complex and original idea leads us to the idea of capitalism, and a market, as an entity which perpetuates itself by failing to perpetuate itself: it is the fact that supply diverges from demand which causes the system to continue, not the fact that supply equals demand, which is only the case as a statistical average and never exactly holds. This fundamental and unrecognised difference between Marx’s approach and that of the classicals also distinguishes Marx from most modern economics, which has focussed on equilibrium as the de facto defining principle from which value may be deduced. The problem is exactly the opposite: it is to define a conception of value which does not require equilibrium and makes no presupposition that supply equals demand, that goods are sold, that profits equalise, or that any of the ‘lawlike’ properties of an ideal market actually hold. The ‘lawlike’ properties of a market must then be deduced as an outcome of the dynamic, that is temporal, behaviour of the market, expressed in terms of the interaction between value so defined and use value. In order that such a concept of value may have universal applicability, price has to be reformulated as a form of value, and money theorised on this foundation. This article, presented to the EEA mini-conference on value in 1999, sets out the general principles involved.

Suggested Citation

  • Freeman, Alan, 1999. "The limits of Ricardian value: law, contingency and motion in economics," MPRA Paper 2574, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:2574
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    File URL: https://mpra.ub.uni-muenchen.de/2574/1/MPRA_paper_2574.pdf
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    References listed on IDEAS

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    1. Richard D. Wolff & Bruce Roberts & Antonino Callari, 1982. "Marx's (not Ricardo's) ‘Transformation Problem’: A Radical Reconceptualization," History of Political Economy, Duke University Press, vol. 14(4), pages 564-582, Winter.
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Das Kapital vol.3 Chapter 9: Formation of a General Rate of Profit (Average Rate of Profit) and Transformation of the Values of Commodities into Prices of Production
      by kapitalism101 in Kapitalism101 on 2009-12-14 10:12:15

    Citations

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    Cited by:

    1. Freeman, Alan, 2006. "An Invasive Metaphor: the Concept of Centre of Gravity in Economics," MPRA Paper 6812, University Library of Munich, Germany.
    2. Alan Freeman, 2011. "Crisis, Marxism, and Economic Laws: A Response to Gary Mongiovi," Research in Political Economy, in: Revitalizing Marxist Theory for Today's Capitalism, pages 285-296, Emerald Group Publishing Limited.
    3. Freeman, Alan, 2009. "Marxism without Marx: a note towards a critique," MPRA Paper 48618, University Library of Munich, Germany, revised 17 Nov 2009.
    4. Freeman, Alan, 2001. "Two Concepts of ‘Centre Of Gravity’: Commentary on Contributions by Gary Mongiovi and Fred Moseley," MPRA Paper 52819, University Library of Munich, Germany, revised 21 Feb 2001.

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    More about this item

    Keywords

    Crisis; inequality; market failure; TSSI; Temporalism; Marx; Value; Marshall; Walras; equilibrium; non-equilibrium; history of thought; Keynes; Austrian Economics; Post-Keynesian economics; Ricardo;
    All these keywords.

    JEL classification:

    • B5 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches
    • B51 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Socialist; Marxian; Sraffian
    • B14 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Socialist; Marxist
    • B4 - Schools of Economic Thought and Methodology - - Economic Methodology
    • B31 - Schools of Economic Thought and Methodology - - History of Economic Thought: Individuals - - - Individuals
    • B12 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Classical (includes Adam Smith)

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