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New Left Review I/152, July-August 1985

Emmanuel Farjoun and Moshé Machover

Probability, Economics and the Labour Theory of Value

In our book Laws of Chaos, published by Verso in 1983, we advocate a fundamental methodological shift in the foundations of political economy. [1] Emmanuel Farjoun and Moshé Machover, Laws of Chaos, Verso, London 1983. In the sequel this book will be referred to as loc. Economists and economic philosophers have often pointed out the essentially indeterminate and statistical nature of economic categories such as price and rate of profit. [2] ‘In political economy, law is determined by its opposite, absence of law. The true law of political economy is chance, from whose movement we, the scientific men, isolate certain factors arbitrarily in the form of laws.’ (K. Marx, ‘Comments on James Mill, Eléments d’Economie Politique’, Collected Works, vol. III p. 211.) Marxists, in particular, have recognized that this indeterminacy is rooted in the disorderly, uncoordinated and chaotic nature of capitalist market relations. [3] ‘Of course, if we look into separate private enterprises . . . then we shall find the strictest organization, the most detailed division of labour, the most cunning planfulness based on the latest information. . . . But no sooner do we leave the factory or the large farm than chaos surrounds us. While the innumerable units . . . are disciplined to the utmost, the . . . world economy is completely unorganized. In the entity which embraces oceans and continents, there is no planning, no consciousness, no regulation, only the blind clash of unknown, unrestrained forces playing a capricious game with the economic destiny of man. Of course, even today an all-powerful ruler dominates all working men and working women: capital. But the form which this sovereignty of capital takes is not despotism but anarchy.’ (R. Luxemburg, ‘What is Economics?’, in Rosa Luxemburg Speaks, New York 1970, pp. 237–38.) Yet, in (theoretical) practice, the approach taken by all economic schools, Marxist and non-Marxist alike, is predominantly determinist: basic economic categories are theorized as determinate numerical quantities, interrelated by means of determinist laws. In loc we advocate the abandonment of this methodology in favour of a thoroughly probabilist conceptual framework, which does not merely pay lip-service to the statistical nature of basic economic categories, but actually builds it into its theoretical models. These categories, we argue, should be theorized as probabilistic ‘random variables’, interconnected by statistical laws.

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Emmanuel Farjoun, Moshe Machover, ‘Probability, Economics and the Labour Theory of Value’, NLR I/152: £3

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