An immortal fumble by William B Vogt (7-Apr-1998)

A slew of mathematical economics...
>>>>> Robinson and Friday are ideal types. We can add many workers and
>>>>> capitalists, and assume perfect competition.


>>>> Yes, we can do that. Of course, doing that changes the results.

>>> [ Unmotivated bargaining story deleted ]


>> Except it was neither unmotivated nor a bargaining story.
>> It was a description of competitive equilibrium in your
>> model with 2 capitalists and 1 worker (with lots of
>> implicit assumptions about preferences and technologies,
>> but what else can one do, given such a poorly specified
>> model?)

>  If one wants to add unneeded assumptions, one should state them clearly.


The issue, of course, is your underspecification of the model.
It was, you, after all who claimed that competitive equilibrium
with different numbers of buyers and sellers from your initial
model did not change the result.

>>> Tastes impose hardly any restrictions on equilibrium outcomes.


>> Huh? I can't see what you can possibly mean by this.

> [ not this ]


>> If you mean that merely assuming convex preferences
>> provides few restrictions, then that's true. But merely
>> assuming convex production technologies similarly provides
>> few restrictions. General equilibrium theory in general
>> provides few restrictions, without restrictions on
>> underlying preferences and technologies.

> Given any shapes of aggregate excess demand functions
> that satisfy Walras' law and perhaps some continuity
> condition which I forget, there exists some assumptions
> on tastes which will yield those demand functions.


Right. And you claim this is an excuse not to bother
specifying preferences when making claims about the
behavior of a particular model under competitive equilibrium?
How does this follow?

>> There is no general definition of exploitation or
>> appropriation in your parable which distinguishes
>> these terms from the failure of voluntary exchange.

>> It seems to me that the burden you bear to establish
>> exploitation may be coherently defined is to provide a
>> definition which is tolerably general and which one might
>> imagine applying to observed reality.

> I don't know why I have a burden to prove conclusively that the
> well-established concept of a derivative is coherent when
> speaking to an audience that includes many that are probably
> uncomfortable with algebra.


No, the burden in that case would be to talk about tangent
lines. Anyone who understood algebra, would then understand
that derivatives were well-defined for lots and lots of
interesting functions. Similarly, the burden here is to produce
a tolerably general definition of exploitation that one might
imagine applying to observed reality.

> But, if you want greek ... [...]


So, in response to requests to define exploitation, you have provided:
  1. A parable in which exploitation is not defined.
  2. A slew of mathematical economics which is readily accessible to, perhaps, 100
     people in the world, and which seems likely to be accessible to an unusually
     well-trained and mathematically-minded economist after perhaps several days of
     continuous effort.
  3. Insults to the effect that, anyone who does not share your fixation for a tiny
     and highly specialized sub-discipline of economics is stupid, humorless,
     thoughtless, ignorant, and unserious.

I can't think of a single object of general interest in standard neoclassical econonomics
which is anywhere near this difficult to define.

>> Why don't you just exhibit your definition of exploitation
>> and be done with it? How does your the parable serve a purpose?

>    Communication. It also happended to expose those who argue
> against it as being either anti-intellectual or uninformed.
> 
>    The collection response of libertarians here to the charge that
> capitalism is exploitative seems to be:
> 
>    o An english language explanation is vague and meaningless
> 
>    o A simple parable which anybody can understand is too
>      unrealistic to be believable. (Somehow those asserting
>      this do not note that it shares this characteristic
>      with economic models they apparently accept)
> 
>    o Exploitation can only be discussed in sophisticated
>      mathematic models that very fw are likely to understand.


Yes, I agree that is a reasonable summary of a subset of the
replies.

Your attempts to define exploitation alternate between
incomprehensibility due to the limited domain in which
they are offered and incomprehensibility due to the highly
specialized and expensive-to-become-familiar-with jargon
in which they are couched. That you think this is a defect
either of the replies or the people making them is odd, to say
the least.
 
> (I prefer John's relativism to William's dismissal of
> calculations drwing on over a century's worth of debate as
> "arbitrary.')
>  
> Meanwhile, it's also apparent that the libertarians are not
> familiar with either Marxist literature or the relevant works
> of mathematical economics. Is it any wonder those a lot less
> bourgeois than me are not changing their minds? I continue to
> think Marx's comments about vulgar political economy have a
> lot to recommend them.


Nasty, evil, closed-minded bourgoise thinkers! How dare they
request minimally comprehensible definitions! How dare they
refuse to invest vast quantities of time to become familiar
with a tiny subdiscipline of economics in response to my demands!

>>>> For, with voluntary exchange, Friday lives a long life of toil
>>>> and Robinson lives a long life of leisure. With revolutionary
>>>> overthrow, Friday lives a long life of semi-toil and Robinson
>>>> dies a violent and early death. It is, at the very least,
>>>> profundly disrespectfu of Robinson's life to prefer the latter.

>>> Robinson is a fictional character. I was neither advocating nor
>>> describing Marxian revolution. Did William note the comment
>>> about idealism? Apparently he lacks a sense of humor too.


>> ??? Is this supposed to be comprehensible? What is your claim?
>> That if you emit the words ""ideal type" this confers upon you
>> a privileged position, such that only you may draw moral
>> inferences from your parable?

> Apparently William did miss the reference to idealism, or did
> not understand it. Marx was a materialist. I was not advocating
> a violent revolution of any kind. Nor was I describing a Marxist
> revolution. In fact, I draw very little in the way of moral inferences
> from my parable.


A quick trip to www.dictionary.com reveals:
  Source: WordNet (r) 1.6 [wn]
     parable     n
        1. A short moral story (often with animal characters)
            [syn: {fable}, {allegory}, {apologue}]
        2. (New Testament) any of the stories told by Jesus to convey
            his religious message; "the parable of the prodigal son"
I think this summarize the the common usage meaning of
parable nicely. Parables are stories whose purpose is
to provide a medium from which to draw moral inferences.
Exploitation is similarly not remotely close to being
a morally neutral term.

>>>> This ambiguity arises even if we assume (as the parable seems
>>>> to) that Robinson came to possess the 50 bushels through some
>>>> arbitrary caprice of fortune. If we assume instead that they
>>>> represent the fruit of many years of self-denial in the
>>>> past, then the overthrow loses any moral ambiguity it might
>>>> otherwise hav had.

>>> Nope. See my comments to John describing how workers are not free
>>> under capitalism.


>> Where?

> In the post to which William is supposedly replying. If it would
> help, think about how the term "wage slave" might relate to those
> comment.


Your comments to John Hall, in their totality:

Excerpts from netnews.talk.politics.libertarian: 3-Apr-98
Re: Labor theory of value by Robert Vienn...@see.sig.

> John Hall writes:
> 
>> I'm sure if I accept you premises I'll get you conclusions, but
>> I'm still wondering why, in this case, we start in the middle of
>> the story. Why are both eating 50 bushels--a feast by your own
>> admission--of corn-based foods? Where does the 150 bushels come
>> from? Why can't Friday take the deal and then only eat 40 bushels
>> worth of corn from his pay, then renegotiate or save for five
>> years and cut the ties to Robinson?
> 
> Maybe John should ask a neoclassical economist. The mainstream
> model takes endowments, the distribution of property rights,
> and tastes as given. Such models include the logic of choice
> discussed by Hayek in the 1930s and the mistaken models of
> previous Austrian economists.
> 
>> It strikes me that something other than the purely economic
>> aspects of a capitalistic system must be the source of the on-
>> going exploitation, in terms of Friday's dependency on Robinson;
>> which is slightly different than exploitation = not getting the
>> full surplus value from production.
> 
> I'm quite willing to agree that Marx's account of exploitation
> involves the hierarchical and authoritarian nature of the firms in
> which work is performed under capitalism. These characteristics of
> firms seem to me to be connected to the fact that workers are not paid
> the full-value of their product. In Marxist terms, workers sell
> their labor-power, not labor. (Whether these aspects of capitalism
> are "purely economic", I leave to others to address.) I don't claim to
> be able to fully elucidate these connections, nor to be able to explain
> how a system in which firms with this structure are dominant reproduces
> itself. I think the latter question is more than a matter of
> formalism.
> 
> I recently reread an article that draws a connection between the
> later Wittgenstein and the tradition from which I draw my parable.
> Wittgenstein came to consider that language has no essence, but
> many various uses. This is an ontological claim, not merely
> epistemological. So different accounts of language that claim
> to be complete for all of linguistic experience will always sound
> like the blind man describing the elephant. One can construct, however,
> simple models which can function as "objects of comparison," not
> as approximations that approach close and closer to reality. What
> one can show with these models one can show clearly.
> 
> Similarly with society and, more specifically, economics. Think of
> my parabl as a Wittgenstein-like language game meant to elucidate
> one aspect of capitalism. (I'm quite aware that my previous comments
> were addressed to those who might have misconceptions about the
> point of all models in economics.) I have met problems on these
> grounds before. I have posted models with one or two goods where
> other posters have assumed that the goods must correspond to
> quantity indices for multiple goods, and their prices to price
> indices. This sort of attitude seems to me to be a mistake.


Where have you demonstrated the unfreedom of workers under
capitalism? What I se here is:
  1. The claim that neoclassical economists take
     endowments as given in the context of drawing moral
     inferences from their models.
  2. A discussion of Marx's conception of exploitation,
     how it relates to your discussion, and whether it
     is purely positive or a mixture of positive and
     normative elements.
  3. Your view of the purpose of economic modelling.

 Fumble Index  Original post & context: Mp_Z1U200iV101qHsh@andrew.cmu.edu