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Hi Geert,

I was very glad to receive your recent post and that you have joined the

discussion. It was weird trying to carry on the discussion without you

(and Mike). This is only a partial response. There is much more to

discuss. This post has to do with the quantitative theory of value added

provided by VF theory.

QUANTITATIVE THEORY OF VALUE ADDED

1. Geert says that my equation P = mL should be instead Y = mL, where Y

is the value added component of the price of commodities. Geert must be

assuming that L in my equation is current labor only. But I was assuming

instead that L also includes the past labor required to produce the

current means of production (i.e. L = Lc + Lp and P = mLc + mLp). So

there is no disagrement here. I am happy to restrict the discussion to

value added and current labor, and will do so below.

Geert argues that value-form theory does indeed present a quantitative

theory of value added (and surplus-value), which is represented by the

same kind of equation as in my interpretation of Marx's theory:

(1) Y = m L

If I was wrong about VF theory on this point, I would be happy to admit

it. But I would like to understand better the precise meaning of this

equation, according to the VF theory. How is it similar to Marx's

theory and how is it different?

Equation (1) has three variables: Y, m, and L. In order for this equation

to represent a meaningful theory, two of the these three variables must be

determined independently of this equation. These two variables would then

mutually determine the third variable.

Therefore, if this equation is to express a meaningful theory of value

added, then the other two variables, L and m, must somehow be determined

outside this equation, and taken as given in this equation. Otherwise,

the equation would be a tautology (true by definition) or indeterminant

(two unknowns with one equation).

2. According to my interpretation of Marx's quantitative theory of value

added, L in this equation is ABSTRACT labor (La), in which quantities of

skilled labor and more intensive labor (Li) have been converted into

equivalent quantities of simple labor by means of multipliers or

"reduction coefficients" (ki) that Marx took as given; i.e.

(2) La = SUM ( ki Li)

This quantity of abstract labor is taken as given in Marx's theory of

value added.

The m in equation (1), according to my interpretation of Marx's theory of

value added, is the money-value-added per hour of simple labor, which is

also taken as given and which Marx assumed is determined by the inverse of

the value of the money commodity (e.g. gold).

Geert (and Mike and others): do you disagree with this interpretation of

Marx's theory?

3. In value-form theory (or at least the RW version, as I understand it;

please correct me if I am wrong), the L in equation (1) is also taken as

given. But it is not taken as given as abstract labor, in which the above

conversion of skilled and more intensive labor to simple labor is assumed

to take place. Instead, L appears to be taken as given as the ACTUAL

number of labor hours of different kinds, with no distinction made between

different skills and different intensities. Geert and Mike, does this

mean that it is assumed that the many different kinds of labor all produce

the same amount of value in an hour?

If VF theory is to provide a determinant quantitative theory of value

added, then the m in equation (1) also must be taken as given, and

must be determined independently of this equation and of value added.

It is not entirely clear to me exactly how the m is equation (1) is

determined, according to VF theory. As I understand it, labor in

different industries and different firms will have different mi's. Right?

But what determines the magnitudes of these mi's? Is the determination of

these mi's related in any way to different skills and intensities?

Are they determined independently of equation (1) and value added?

Geert and Mike (and others), thanks in advance for your clarifications.

I look forward very much to further discussion. The continuing discussion

should be very interesting.

Comradely,

Fred

**Next message:**Jurriaan Bendien: "[OPE-L:2164] Re: Fw: Re: echt Deutsch"**Previous message:**P.J.Wells@open.ac.uk: "[OPE-L:2162] Thermodynamics"**In reply to:**Geert REUTEN: "[OPE-L:2062] Re: value-form theories"**Next in thread:**riccardo bellofiore: "[OPE-L:2174] Re: Re: Re: value-form theories"**Reply:**riccardo bellofiore: "[OPE-L:2174] Re: Re: Re: value-form theories"**Messages sorted by:**[ date ] [ thread ] [ subject ] [ author ]

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