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POLITICAL ECONOMY III (ECON 710: FALL 2013, Umass Amherst)

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POLITICAL ECONOMY III (ECON 710: FALL 2013, Umass Amherst) POLITICAL ECONOMY III (ECON 710: FALL 2013, UMass Amherst) Instructor Deepankar Basu Office: 1012 Thompson Lec: Tu, 6:15–8:45pm, 919 Thompson Office Hours: Th, 3:00pm – 4:30pm E-mail: [email protected] Ph: 413–545–6359 About the course: This course will introduce students to two important lines of inquiry within Marxian political economy that emerge from Volume III and II of Capital, respectively: (1) the debates on the labour theory of value centered around the so-called transformation problem that started with the publication of the third volume of Capital in 1894 (and is still with us), and (2) the Marxian circuit of capital framework for macroeconomic analysis of capitalist economies that builds on the discussions in the second volume of Capital. Background Reading: The following books can be used for reference and background reading. • Foley, D. K. 1986. Understanding Capital: Marx’s Economic Theory. Harvard University Press. • Marx, K. 1992. Capital: A Critique of Political Economy, Volume I. Penguin (first published in 1867). • Marx, K. 1993a. Capital: A Critique of Political Economy, Volume II. Penguin (first pub- lished in 1885). • Marx, K. 1993b. Capital: A Critique of Political Economy, Volume III. Penguin (first pub- lished in 1894). • Sweezy, P. M. 1942. The Theory of Capitalist Development. Monthly Review Press. Grading: A total of 100 points will be divided between class participation, presentation in class and a research paper as follows: Class participation and presentation: Students will be expected to choose one paper, in consultation with the instructor, and lead discussions in class on the paper. The presentation will count for 30 points and general participation will count for 20 points. Research paper: The research paper will be worth 50 points and will involve either (a) replicating the arguments of an existing paper, and critically extending it further if possible, or (b) presenting original research. Typically the paper will be chosen by the student in consultation with the instructor and can draw on the class presentations. 1 Tentative schedule: The tentative schedule for the course is as follows. Part I: Debates in the Labour Theory of Value • Week 1: Preliminaries: the first week will introduce students to the basic concepts of the labour theory of value like value, money, capital, the rate of profit, and also offer an overview of the circuit of capital model. We will draw on Marx (1993b), Marx (1993a) and Foley (1986). The class will primarily be a lecture. Required readings: – Foley, D. K. 1986. Understanding Capital: Marx’s Economic Theory. Chapter 2, 3, 6 (for debates in the labour theory of value) and chapter 5 (for the circuit of capital model). • Week 2: The Standard Interpretation: in the second week, we will go over Marx’s proce- dure for transforming values into prices of production in Chapter 9, Volume III of Capital, and the critique and correction of Marx’s procedure offered by von Bortkiewicz, which was popularized in the English language by Sweezy (1942), and the subsequent refinements of this method by Winternitz (1948), and Seton (1957). Required readings: – Marx, K. 1993. Capital: A Critique of Political Economy, Volume III. Penguin (first published in 1894). Chapter 9. – Sweezy, P. M. 1942. The Theory of Capitalist Development. Chapter 7. – von Bortkiewicz, L. 1949. On the Correction of Marx’s Fundamental Theoretical Con- struction in the Third Volume of Capital. Appendix in von Bohm-Bawerk,¨ E., Karl Marx and the Close of His System. • Week 3–4: Sraffa and Marxian Economics: in these two weeks, we will be going over details of the Sraffian critique, primarily drawing on Steedman (1977). We will also draw on critiques offered by Robinson (1960), Samuelson (1971), Roemer (1981), and some rebut- tal (or clarification) offered in Wolff et al. (1982), Roberts (1987), parts of Morishima and Catephores (1978), and Shaikh (1981). The classes will be organized as discussion sessions. Required readings: – Roberts, B. 1987. Marx after Steedman: Separating Marxism from ‘Surplus Theory’. Capital & Class, 11(2):84–103. – Shaikh, A. 1982. The Poverty of Algebra. In Steedman, I. and P. M. Sweezy (eds.), The Value Controversy. Verso. pp. 266–300. – Steedman, I. 1977. Marx After Sraffa. Chapter 2-5. – Wolff, R. D., B. Roberts, and A. Callari. 1982. Marx’s (not Ricardo’s) ‘transformation problem’: a radical reconseptualization. History of Political Economy, 14(4):564–582. 2 • Week 5: The Iterative Solution: in this week, we will study the iterative solution to com- peting Marx’s transformation procedure offered in Shaikh (1977), and parts of Morishima and Catephores (1978). The class will be organized as discussion sessions. Required readings: – Shaikh, A. 1977. Marx’s Theory of Value and the “Transformation Problem”. In Jesse Schwartz (ed.), The Subtle Anatomy of Capitalism, Goodyear Publishing Co. • Week 6-7: The New Interpretation: in these two weeks, we will familiarize ourselves with the New Interpretation of Marx’s value theory drawing on Baumol (1974), Foley (1982b), Dumenil´ (1983–4), Lipietz (1982), Dumenil´ (1984), Ehrbar and Glick (1986), Glick and Ehrbar (1987), Foley (2000), and Moseley (2011). Classes as discussion sessions. Required readings: – Baumol, W. J. 1974. The Transformation of Values. What Marx “Really” Meant (An Interpretation). Journal of Economic Literature, 12(1):51–62. – Foley, D. K. 1982. The Value of Money, The Value of Labour Power and the Marxian Transformation Problem. Review of Radical Political Economics, 14(2):37–47. – Foley, D. K. 1986. Understanding Capital: Marx’s Economic Theory. Chapter 6. – Moseley, F. 2011. Recent Interpretations of the “Transformation Problem”. Rethinking Marxism, 23(2):186–197. • Week 8: The Temporal Single System Interpretation: in these two weeks, we will study the TSSI interpretation of Marx’s value theory drawing on parts of Carchedi and Freeman (1996), Kliman and McGlone (1999), and Kliman (2006), and also the critique in Veneziani (2004). Classes will be organized as discussion sessions. Required readings: – Kliman, A. J., and T. McGlone 1999. A Temporal Single System Interpretation of Marx’s Value Theory. Review of Political Economy, 11(1):33–59. – Veneziani, R. 2004. Temporal Single System Interpretation of Marx’s Economics: A Critical Evaluation. Metroeconomica, 55(1):96–114. Part II: The Circuit of Capital Model • Week 9-10: The Circuit of Capital Model-I: in these two weeks, we will study parts of Volume II of Capital and its formalization in Foley (1986, ch. 5), and Kotz (1991). Classes will be organized partly as lectures and partly as discussion sessions. Required readings: – Marx, K. 1993a. Capital: A Critique of Political Economy, Volume II. Penguin (first published in 1885). Chapter 1. – Foley, D. K. 1986. Understanding Capital: Marx’s Economic Theory. Chapter 5. 3 • Week 11: The Circuit of Capital Model and Crises under Capitalism: in this week, we will study Kotz (1991) and Harvey (2010) as examples of the use of the circuit of capital framework to think about crises under capitalism. Classes will be organized partly as lectures and partly as discussion sessions. Required readings: – Kotz, D. M. 1991. Accumulation, Money and Credit in the Circuit of Capital. Rethink- ing Marxism, 4(2):119–133. – Harvey, D. 2010. The Enigma of Capital and the Crises of Capitalism. Chapter 2–5. • Week 12-14: The Circuit of Capital Model-II: in these two weeks, we will study further refinements of the circuit of capital model, drawing on Foley (1982a), and dos Santos (2011). Classes will be organized partly as lectures, and partly as discussion sessions. Required readings: – Foley, D. K. 1982. Realization and Accumulation in a Marxian Model of the Circuit of Capital. Journal of Economic Theory, 28:300–319. – Basu, D. forthcoming. Comparative Growth Dynamics in a Discrete-time Marxian Circuit of Capital Model. Review of Radical Political Economics. References W. J. Baumol. The transformation of values: What marx “really” meant: An interpretation. Journal of Economic Literature, 12:51–61, 1974. G. Carchedi and A. Freeman, editors. Marx and Non-Equilibrium Economics. Edward Elgar, 1996. P. L. dos Santos. Production and consumption in a continuous-time model of the circuit of capital. Metroeconomica, 62(4):729–58, 2011. G. Dumenil.´ Beyond the transformation riddle: A labour theory of value. Science & Society, 47 (4):427–450, 1983–4. G. Dumenil.´ The so-called transformation problem revisited: A brief comment. Journal of Eco- nomic Theory, 33(2):340–48, 1984. H. Ehrbar and M. Glick. The labour theory of value and its critics. Science & Society, 50(4): 464–478, 1986. D. K. Foley. Realization and accumulation in a marxian model of the circuit of capital. Journal of Economic Theory, 28:300–319, 1982a. D. K. Foley. The value of money, the value of labour power and the marxian transformation problem. Review of Radical Politics Economics, 14(2):37–47, 1982b. 4 D. K. Foley. Understanding Capital: Marx’s Economic Theory. Harvard University Press, 1986. D. K. Foley. Recent developments in the labour theory of value. Review of Radical Politics Economics, 32(1):1–39, 2000. M. Glick and H. Ehrbar. The transformation problem: An obituary. Australian Economic Papers, 26(49):294–317, 1987. D. Harvey. The Enigma of Capital and the Crises of Capitalism. Oxford University Press, 2010. A. Kliman. Recaliming Marx’s Capital: A Refutation of the Myth of Inconsistency. Lexington Books, 2006. A. Kliman and T. McGlone. A temporal single system interpretation of marx’s value theory. Review of Political Economy, 11(1):33–59, 1999. D. Kotz. Accumulation, money and credit in the circuit of capital. Rethinking Marxism, 4(2), 1991. A. Lipietz. The so-called “transformation problem” revisited. Journal of Economic Theory, 26: 59–88, 1982. K. Marx. Capital: A Critique of Political Economy, Volume II. Penguin, 1993a. (First published in 1885).
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