In Doctrines, Myth Industry, Pluralism, Theory of Value

Presented to the 8th annual conference of the Association for Heterodox Economics, London, July 2006. Available also on RepEc. This piece ias one of several in a developing critique of the claim, advanced by Mongiovi, Kurz, Moseley and others, that the simultaneist interpretation of Marx, along with simultaneous models of a real economy in general, can be rescued from the charge of unreality by means of the concept of ‘Centre of Gravity’. The problem these authors attempt to deal with is that if prices, or profit rates, or indeed any feature of a real economy, are held to be determined by a simultaneist (aka equilibrium) formalization, then reality cannot possibly correspond to the results of the calculation. This is because the simultaneist calculation yields magnitudes that can only hold if the economy is entirely static. One way out – the method of both neoclassical economics and simultaneist Marxism, is to say that even though the economy is changing, real prices are accurately calculated by supposing that, in each period, prices can be in some way approximated by supposing that the economy does not change during that period. The real economy then appears as a kind of flickerbook of a succession of static calculations, hence the term ‘comparative statics’.

There are many very serious objections to this procedure of which the most serious of all is, of course, that such critical phenomena as the course of the profit rate, or the divergence of national incomes, do not behave as the simultaneist calculation predicts they would – thus the profit rate falls when the the Okishio theorem predicts it must necessarily rise, national incomes diverge when the neoclassical growth theory predicts they must necessarily converge, and so on. Indeed, were economics to behave as a science, such objections would be decisive, since a theory whose predictions are falsified by reality is clearly a false theory.

The ‘centre of gravity’ concept attempts to evade this problem by saying that, although prices are not equal to those of simultaneist theory, and cannot possibly be, nevertheless the simultaneist prices (and profit rates) act as a ‘centre of gravity’ for real prices. The term ‘centre of gravity’ is, however, never precisely defined by these authors and amounts, in practice, to what mathematicians term a ‘hand-waving’ argument: the speaker gets to the point where a logical step is missing, and waves her or his hands in the air declaring ‘it’s like that’.

The purpose of this article is to dissect the precise error in logic that is involved in this fallacious and mendacious claim. It locates it in the substitution of metaphor for logic. What would actually be required, to make a sound claim that simultaneist prices form a centre of gravity for real prices, is a proof that this is the case – a precise definition of the term ‘centre of gravity’ and then a chain of reasoning that establishes why we ought to at least investigate the possibility that real prices in some sense oscillate around this centre, or that there is even some determinate relation between the ideal centre (defined by these authors as the simultaneist centre) and what is observed.

The paper argues that the ‘metaphor’ is incapable of supporting any such chain of reasoning. This is because gravity does not act in the same way as the ‘economic forces’ driving price movements. Indeed, if we study the meaning that physicists give to ‘centre of gravity’ the metaphor as applied by these authors is seen to be inapplicable.

In later works, I examine carefully what is meant by Marx’s (only!!!) use of this term, and show that it can be given a completely different meaning of a long-run statistical time average, which makes greatly more sense of Marx. This notion is compatible with the econophysics usage, but not with simultaneist usage. There are two documents below: the text of the presentation, and a text version of accompanying slide.

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