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Capital & Class 1997 Articles 151 3
Capital & Class 1997 Articles 151 3
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Book Reviews
class struggle in the late 1980s and 1990s. Nor is there any concrete discussion of what constituted capital. There is no mention of the massive changes in the ownership and management of productive capital in Britain since 1979 or of one of its most signicant features: the growing unevenness of technological changewith very low average levels of productivity concealing islands of very high competitive performance, usually,
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though not always, owned externally. These factors are unlikely to have been unimportant for the cohesion of capital in Britain, the articulation of interests at national level and the emerging splits within the Conservative party over the international orientation of policy. Historically these splits may well prove of more importance than the greyness of John Major.
Boe Thio
152
and what kinds of equations might imitate it? The mathematics is perhaps more difficult but richer. A difference or differential equation system can model almost anything. Indeed a remarkable but disturbing paper by Rubel (1981) exhibits a single differential equation which can indeed model everything in the sense that by suitable choice of parameters and initial conditions, a solution can be found as close as required to any given set of empirical data. The difficulty is therefore the opposite of static systems, which simply do not possess a sufficient number of degrees of freedom to model the complexity of a real market economy. A fairly simple set of differential equations in two or three variables, easily produces periodic, chaotic, or any desired behaviour. This could easily become the basis of a vacuous school of trendy chaos models. What would it mean to say a dynamic system is valid? Must it be so fluid it tells us nothing? Paradoxically, the quantitative predictions of such systems are far less important than in statics. Modern dynamic theory from the epochmaking work of Henri Poincar onwards has realised that, precisely because of their complex behaviour what matters is the qualitative or topological behaviour of dynamic systems; whether they exhibit limit points, saddle points or cycles, whether these grow, disappear or settle to a steady level, and whether these characteristics change radically or only gradually when parameters are modied. Thios work begins, in the tradition of Goodwin. from the decisive qualitative feature of modern capitalism, the existence of recurrent or persistent cycles. This mere fact, if treated honestly, rules out all explanations for crisis based on external interference or shocks and invalidates all static equilibrium approaches.
Book Reviews
and profits for a share of net output. In the model, or class of models eventually derived in chapter 5, wage-prot conicts interact with changes in the structure as well as the utilisation of capital; technical progress itself comes into play in shaping the level of employment. Not only should the book be read, but marxists who feel that mathematics has a place in economics should try to grasp the structure of the argument it contains, which is alien to much of what passes for marxism. The reason is not that it deploys Marxs value categoriesthe variables it deals with are either unreconstructed prices or unanalysed quantities, no attempt being made to express the fundamental relations of the system in terms of value magnitudes. It is that dynamic mathematics is the proper and appropriate formalism for value analysis, and those who use it References
Goodwin, R.M. (1951) The nonlinear accelerator and the persistence of business cycles in Econometrica 19(1): 1-17. __________ (1967) A growth cycle in Feinstein (1967). Reprinted in Good-win (1982). __________ (1982) Essays in Economic Dynamics. Macmillan, London.
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competently and without neoclassical prejudices provide a better account, even without value analysis, of the qualitative features of the cycle than the so-called marxists. This is a sad fact. The analysis has limitations, most of which space prevents us listing; for example, the absence of the profit rate itself (rather than the pure mass of prot) as the determining inuence on accumulation, or the eclecticism and sheer number of equations needed to describe what is essentially a very simple movementalways a sign that the most vital initial abstractions have not been made properly. We can only speculate on what could be achieved if the marxists espoused a genuinely dynamic approach, or if practitioners of macroeconomic dynamics preceded their valuable techniques with a proper analysis of the value relations they seek to model.
Goodwin, R. and L. Punzo (1987) The Dynamics of a Capitalist Economy. Polity, Boulder, Colorado, Westview and Cambridge. Rubel. L.A. (1981) a Universal Differential Equation Bull Amer Math Soc. New series #4: 34549.
Makoto Itoh