A Note on Causation, Logical Implication, and the Ordering of Variables in Equations

Abstract

Changkeun Kim (2016) reiterates his charge that there is circular reasoning in Freeman and Kliman’s definition of the Monetary Expression of Labour Time (MELT). Kim also charges that the Temporal Single System Interpretation (TSSI) of Marx’s value theory does not yield falsifiable conclusions, because it does not predict prices. Both charges depend logically on an erroneous claim about what an arithmetic equation consists of. Kim holds that an equation necessarily implies a causal relation by virtue of the order in which it is written. This is not so. The order in which an equation is written tells us nothing about the causal relations between the variables in it, and such an interpretation of the meaning of an equation contradicts the literature on the subject. Both charges therefore fall once this claim is recognised to be erroneous. In fact, causal explanations must come from outside the equation system. We show that both the MELT and market prices are necessarily indeterminate within the TSSI since it is an interpretation of Marx’s value theory to which the determination of market prices and the MELT are external. We briefly examine Kim’s derivation of the relation between the gold MELT and the actual currency MELT and show that the latter, in his own theory, is indeterminate. Thus, his own theory of the MELT is subject to exactly the same criticism that he levels at ours, proving that within the value equations, the MELT is necessarily indeterminate. The way forward is to cease the attempt to discredit legitimate theories of the MELT, especially that of the TSSI, by purely logical means. Instead, writers should concentrate on studying and theorising the real phenomena of capitalist monetary dynamics on the foundation of Marx’s value theory, on which there is now substantial potential agreement. We argue that the TSSI of this theory constitutes the best currently available foundation for this collective enterprise.