The British Society for the Philosophy of Science

Laws of Chaos by Emmanuel Farjoun; Moshe Machover

Review by: D. G. Champernowne
The British Journal for the Philosophy of Science, Vol. 36, No. 3 (Sep., 1985), pp. 348-352
Published by: Oxford University Press on behalf of The British Society for the Philosophy of
Science
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348 The British Journalfor the Philosophy of Science
dent thinking and to exaggerate the clarity and completeness of Wallace's
ideas before 1858. Two examples of this appear to be crucial. First, he reads
Wallace's undoubtedly brilliant and influential 1855 paper 'On the law
which has regulated the introduction of new species' as containing
explanatory rather than descriptive argument. Second, in order to dismiss
the evidence that Darwin had the principle of divergence in the 1857 letter to
Asa Gray, he treats Darwin's statements as containing factual errors which
an experienced naturalist like Wallace would have known to be wrong (and
which he avoided in his own formulation); what this empiricism does not
allow is adequate characterisation of the complexities of the various aspects
of divergence which both Darwin and Wallace took much time to clarify.
Brooks writes as if facts (including something as complex as divergence) are
there waiting to become intellectual property. He tends to assume a too
definite theory, toward which Darwin and Wallace are working, rather than
a process of study in which the clarification of meaning is itself a central
issue.
Brooks (and McKinney) have shown that there is a serious question mark
over the contemporary reception of Wallace's work, a view which will upset
not a few. This book also makes a complex implicit case for the intellectual
significance of natural history. Philosophers interested in the practice of
inductive inference will find here a challenging example in both science and
history.
ROGER SMITH
Department of History, University of Lancaster

FARJOUN, EMMANUEL and MACHOVER, MOSHE [I983]: Laws of Chaos.

Verso Editions and NLB. 264 pp. (ISBN o 86091 058 X o 86091 768 I
Pbk).

Readers who relish neither advanced mathematics nor the finer points of
Marxist economic theory should not allow themselves to be completely put
off by the learned chapter headings and numerous equations to be found in
this book. For instance, Chapter 2-A Paradigm: Statistical Mechanics-
serves merely to illustrate the point that in order to account for the variety
observed in the real world, it is better to construct a probabilistic model
equipped with Random Variables and their Probability Density Functions
than a determinist model equipped with plain variables and their equilib-
rium values. There is no need at all to puzzle about Statistical Mechanics;
the remainder of the book will not become less intelligible if this chapter is
skipped. Again the mathematical minutiae in later chapters are less
significant than the many perceptive remarks to be found, especially near the
beginning of the book, and mainly provided by the authors themselves, but
including some particularly well-chosen quotations from earlier writers. It
may therefore be useful to direct attention to selected sections of the book,

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 Reviews 349
which such non-specialists may find worth reading before deciding whether
to proceed to more systematic study.
The Foreword and first section of the Introduction provide a useful
account of the book's main aims, and the section-The General Plan of This
Work-is a valuable verbal account outlining more technical parts of the
book. To appreciate the paradoxical title 'Laws of Chaos' one should follow
Rosa Luxembourg's exposition of the contrast between the chaotic struggle
for profit in market competition and the disciplined planning of production
within large capitalist industrial enterprises. It is indeed advisable to look up
Rosa Luxembourg in the index and read through all the quotations provided
from her works as a prelude to further reading of the main text. The reader
may then turn to the earlier pages of Chapter 5, and if he has difficulty with
the properties of Random Variables, turn to Appendix i which gives quite a
good outline of the elements of Probability theory. The first half dozen pages
of this chapter 'Price and Wage as Random Variables' supplies some original
ideas and potentially valuable suggestions for further research: the re-
mainder of the chapter is less rewarding.
The notorious diversity of the diagnoses and prescriptions of economists
results largely from their disagreement as to what their subject is supposed
to be about, and as to what are the proper objectives of economic policy. The
authors of this book inform us (p. 85) of their 'opinion as to what economics
is all about; it is about the social productive activity of human beings, social
labour. The science of economics, taken in the most general sense, is concerned
with the study of social processes and structures by means of which and through
which social labour is organized and performed, and the output of this labour
distributed and allocated to various uses' (Authors' italics). They properly
emphasise that people may and do differ on this matter of opinion; however
they claim that their own view of economics harmonises better than those of
others with a commitment to the labour movement.
In order to develop a theory that does deal with these aspects of social
labour, they allot a central role in it to the concept of Labour-content as a
common measure of commodities. So that the theory may suffice to account
for the shifting facts of economic and social life which they perceive in the
available statistics, they reject all determinist economic models and the main
part of the book lays out the basis for a probabilistic model of development
and distribution, based on a startling selection of simplifying assumptions.
The decision to set up a probabilistic model is much to be applauded. Our
ignorance of the manner in which the various observable economic variables
are determined is vast, and is moreover dwarfed in turn by our ignorance of
the manner in which they will affect each other in the future. In the case of
many important economic variables we can only account satisfactorily for a
small proportion of their variation by the levels and changes of particular
other observed variables: we may reasonably suppose that the unpredictable
plans and expectations of various individuals and committees may play a
large part in determining such movements in the future. The prospects of

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350 The British Journal for the Philosophy of Science

constructing a successful determinist general model of the workings of the

economy are therefore meagre: the case for introducing random variables to
represent the influences about which we know practically nothing, or cannot
even identify, is even stronger than the authors suggest.
Despite their proclaimed commitment to the labour movement, the
authors are critical of Marxist economic theory. They point out that neo-
Marxist writers such as Piero Sraffa have depended just as much as neo-
classical writers on the assumption of a uniform rate of profit on capital.
Grasping the torch handed on by Rosa Luxembourg, our authors reject that
assumption absolutely, and represent the profit rate R by a random variable,
since they regard the competitive market struggle for profit and the
establishment of new products as chaotic and yet as essential for the
effectiveness of the capitalist economic system. Similarly inspired, they
suggest that despite the prevalence of chaotic conditions in most of the
market transactions, the degree of order and predictability within the
manufacturing sphere, employing large masses of labour, is so much higher,
that one can, as a first approximation, deal with all the uncertainty in this
sphere by introducing a single random variable, Labour-content, and can
study growth and development in terms of a single commodity, the General
Commodity. This General Commodity 'includes commodities of all types
whatsoever, except one-Labour-power. We single out labour-power for
separate treatment, and its price (that is wages) will feature as a separate
random variable since 'labour-power is in several ways a peculiar and
exceptional commodity-type'.
Much of the book stands or falls with the justification of two choices in this
connection:

(i) the choice of just two random market-variables, the Profit-rate R and
the General-commodity price Y;
(ii) the choice of the method for specifying the weights used for
combining the profit-rates of individual firms into the overall profit-
rate R, and of the method for combining the specific prices of
individual commodity-types to form the General-commodity price

The case for the particular methods proposed in the book is not compelling.
It may seem straightforward to define units of labour-content for a
specific commodity-type; for example, the person-weeks of labour devoted
directly or indirectly to producing the basket of goods of the commodity-
type sold in that month. But how do you treat the labour of a person
simultaneously helping to produce more than one-commodity-type, especi-
ally when this production will be sold over several months? Why should
you equate a week's skilled labour contributed directly in this month with a
week's unskilled labour contributed indirectly six months ago? Arguments
for doing so are only hinted at and again are not convincing. The authors

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 Reviews 351
seem to be aware of the need to strengthen their case and suggest that it
would be unlikely to make any appreciable difference if one redefined unit of
labour-content so that a unit of skilled labour counted the same as several
units of unskilled labour, as reflected in the ratio of their money-wage rates:
this method roughly corresponds to the method of wage-units used for
measuring employment in J. M. Keynes' General Theory of Employment,
Interest and Money.
The authors accept as reasonable the simplifying assumption of perfect
competition (p. 18) and yet labour is to be regarded as homogeneous, in
contrast to the random profit rate, prices, wages and rates of value added.
But is it reasonable to assume people at work to be so much alike for
purposes of economic theory?
Having earlier drawn attention to many attractive features and interesting
suggestions in the chapters near the beginning of the book, some reserv-
ations must now be expressed about the empirical support which is claimed
for these theories in Chapter 8, 'Empirical Data and Open Problems'.
Economic theorists who take satisfaction from good harmony between their
theories and commitment to a particular political movement have often been
prone to detect impressive regularities in empirical economic data, which
seem to supply even better harmony with their political theme. Pages
179-81 of Chapter 8 direct the reader's attention to various 'very high' or
'amazingly high' correlation coefficients found between such pairs of
variables as-wages and added value-wages and surplus value-total value
added by manufacturing and total payroll. -The amazingly high corre-
lation of 0.997 is found for this last pair from 'data taken from the US
Annual survey of Manufacture' which relate to the 'American economy in
the period from 188o to 1966'. But since both variables increased by large
factors over this lengthy period and were likely to be similarly affected by
short-term perturbations in trade activity, the time-series correlation
coefficient of 0.997 is not surprising. Similarly the high correlations between
firms of widely differing sizes between wages and added value in a country in
a particular year are to be expected since large firms will have large wage bills
and large values added. The authors also attach great significance to the
clustering round the value 2 of the estimates of ratios of 'Value added' to
'Total wage bill'. The fascination of the round number 2 is derived from two
considerations:

(i) that it implies an equal division of the Value added between overall
Earnings and overall Profits;
(ii) if we accepted some far-fetched assumptions that two pairs of variates
are both completely independent as between firms, then we should be
entitled to deduce the fantastic conclusion that both independent
variables of one pair-Profit rate and Rate of Labour costs-are
Gamma variates with the same parameter and accordingly with
identical probability density functions.

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352 The British Journal for the Philosophy of Science

Admittedly this adds elegance to the theoretical model, but it does not
strengthen the claim that there is empirical support for it. It is very doubtful
whether the rough clustering of the ratio near 2 signifies anything
interesting.
It is widely recognised that in speculation about the physical world, an
effective method is to search for the very simplest hypotheses that are not
discredited by existing knowledge, and to make conjectures involving
simple constants in equations containing physical constants and variables-
or conjectures that pairs or groups of variables are independent. But in the
field of the Social studies, this method is far less effective: it is permissible as
a first approximation to treat as independent variables between which there
is no clear reason to expect dependence; but migrants from mathematics to
these pseudo-sciences have constantly to resist the temptation to treat their
social subject-matter as though it behaved as intelligibly as the physical
matter of the universe.
Space allows only a brief allusion to other chapters. For specialists in the
history of economic thought, there is provided Chapter 6 on 'The
Dissolution of the Transformation Problem'. Non specialists may prefer to
preface their reading of the chapter by consulting its final paragraph,
starting at 'The transformation problem is best forgotten but...'.
Finally mention may be made of a curious discussion in Chapter 7 of the
Law of Decreasing Labour-Content, which is roughly to the effect that if
you wait a sufficiently long time, you will probably find that almost any
particular 'commodity-type' will involve less socially necessary labour in its
making. The curiosity of the 'Law' is that although at first sight it appears to
be an obvious consequence of the persistent discovery of newer technical
methods, on second thoughts one can think of various circumstances where
more labour might be needed; and if one thinks about it too long, one doubts
whether the law can even be explained without vile contortions of language.
The discussion of it provides quite an entertaining display of verbal
acrobatics.
Although, as has been indicated, parts of this book should perhaps be
taken with a grain of salt, this work contains a novel approach to the
application of probability theory to economics and deserves credit for
having attempted an extremely difficult task.
D. G. CHAMPERNOWNE
Trinity College, Cambridge

PRIGOGINE, ILYA and STENGERS, ISABELLE [1984]: Order Out of Chaos.

Heinemann, xxxi+ 349 pp. Hardback ?9.95. ISBN 0-434-60395-3.

I greatly appreciated Prigogine's From Being to Becoming [1980] which

provided scientists and philosophers with an informal account of the

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