Concluding Comment: The Baumol-Samuelson Exchange

L. Concluding Comment: The Baumol-Samuelson Exchange

Professor Baumol insists that Marx did not consider the Transformation as “pri- marily a matter of explaining price determination” (1974: 60); again “why on earth should either of them [Ricardo and Marx] have vented his energies to devising a complex analysis whose purpose was to explain the process that determines the price of peanuts?” (2001: 225); “[w]hile value was, patently, one of his primary concerns, pricing emphatically was not. Otherwise, how would one explain his postponement of any systematic discussion of price setting until Volume III of Capital, and even there, why is it a matter very subsidiary to the relation between surplus values and the sum of profits, interest and rent, as a careful reading will confirm?” (233). Now “primarily” is a slippery word to grasp. One may readily agree that the relation between total surplus and total profit (and its sub-elements) is the predominant concern, without compromising the high significance of pric- ing analysis: (1) it is not, after all, the price of peanuts that matters but the general structure of all prices. And (2), as Baumol himself allows, the determination of the relationship between prices and values “is a key part of the transformation problem”; or again: “the two sets of magnitudes which are derived more or less independently were recognized by Marx to differ in a substantial and a systematic manner. A subsidiary purpose of the transformation calculation was to determine the nature of these deviations” (1974: 52). I would venture to maintain that a major purpose of the calculation was to determine the nature of the deviations, because any failure in this regard threatens the proof regarding the macro-identities. At the same time, I allow that once this matter was settled, Marx often proceeded – as in his declining profit-rate or cyclical analyses – as if values alone mattered or, equivalently, as if the solution to the Transformation could simply be taken for granted.

Samuelson, whose running debate with Baumol spans several decades, puts more weight on the pricing analysis in its own right, leading him to conclude – in the light of the logical complications and confusions entailed in the Transformation – that in effect Marx set out with an erroneous value scheme, erased it, and started anew with a true price scheme (Samuelson 1971: 400, 421). Now whatever the technical problems in transforming Vs to Ps it is surely not historiographically safe to represent the value scheme as an “unnecessary detour.” For to do so allows the role of output variation in the transition to fall into oblivion, and along with it a central “Ricardian” feature of Marxian analysis – output variation to assure transitions from non-equilibrium to equilibrium price structures.

54 Value and Distribution

There remains to note Samuelson’s insistence that the modern commentator has an obligation to set out the technical objections to an early formulation: “ . . . when

a Baumol attributes to Marx the attempt to explain total profits by equating it to total surplus value, if no such explanation could be cogent, it is non-optimal not to mention that” (Samuelson 1991b: 11). It is doubtful whether many would disagree, though much will depend on the commentator’s particular objectives and priorities as to the weight to place on the technical deficiencies; and it was evidently Baumol’s primary concern to show that Marx’s intentions included a demonstration of the identity of total surplus and total profit.