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My first attempt came through ill formated I hope this is better
> Nicky responds:
> Well I don't know if I'm a chimp (quite possibly!!), but the point I don't
> follow is why anyone would want to establish an 'alternative unit of
> account to money' or 'the viability of calculation in terms of labour
Well we are all members of the 3rd species of chimp, but the reason why we
are concerned to establish an alternative unit of account to money is that
we were polemicising against market socialism and defending the classical
conception of communism as a moneyless economy. Mises recognised labour time
as the only viable alternative unit of account, but thought it impractical
>(1) with regards to the Austrians, didn't Oscar Lange already
> prove your point, technically?
Yes he did. But the classical Marxian conception of planning in terms of
labour time was effectively abandoned by western socialists in the period of
the calculation debate, if not before.
Two issues arise in relation to labour values: the economic
rationality ofusing labour time as a basic metric in socialist planning, and
the technical feasibility of so doing. We wish to reopen the argument on
both of these points. We contend
that the alleged irrationality of labour time as a basis for calculation was
never properly estab-lished,
and indeed that this conception can be sustained only by reference to an
unreal standard of perfect rationality which has little to do with actual
market economies. We also argue that calculation in terms of labour time is
now feasible (although admittedly it was not at the time of the original
we also try to 'excavate' the classical Marxian arguments which had
been forgotten or rejected by the 1920s, as these form the starting point of
our think-ing on the matter. Lest we be misunderstood, however, we should
stress that our own proposal for labour-time accounting is not made out of
deference to Marx. Rather, we happen to agree with Mises's claims that
socialist planning requires an'objective unit of value', and that labour
time is the only serious candidate for such a unit.
>(2) with regards to capitalism, is money
> not necessarily the only objective measure of value, *under capitalism*?
It is certainly the operational measure, this does not preclude, given
adequate statistics, the caculation of the underlying labour values.
> Of course, I agree with you that Marx doesn't need to "transform" values
> into prices, but this is because the figures in vol. 3 are already in
> prices (i.e. the transformation you talk about is what Fred says it is, a
> transformation from the analysis of capital in general to an analysis of
> many capitals in competition). Do you disagree?
Our point is rather different, our empirical studies showed, somewhat
to our surprise, that in the UK and US economies sectoral organic
compositions were negatively correlated with sectoral profit rates
contra the assumption of equalisation in volume III of capital.
Thus in practice a simple labour theory of value like that or Ricardo
or Capital vol 1 predicts sectoral rates of profit better than the
theory in volume III, and does as well as the theory in volume iii
in predicting sectoral prices.
> The main point is, of course, that I remain unconvinced of the usefulness
> of Marx's "Capital" for understanding socialist economies; and unconvinced
> by your argument that Capitalism can only be completely understood from
> vantage point of socialism.
Of course most of the discussion of the labour theory of value in Capital is
oriented towards the nature and dynamics of capitalism (theory of capitalist
exploitation, theory of the tendency for the rate of profit to fall, and so
But there are several passages which elaborate a more general conception of
the proportional distribution of labour
time as a basic necessity facing any form of economy, and which put the
labour theory of value into context as the specific 'form of manifestation'
of this necessity under the conditions of capitalism. Such passages are
scattered, but if we collect them together they reveal a substantial
'vision' of the economy as a system of allocation of labour time to
different productive purposes-a vision which is as relevant to the
organization of a socialist economy as it is to any other system.
Perhaps the most striking statement of this general view is contained in
Marx's letter to Kugelmann of 11 July 1868:
Every child knows that any nation that stopped working, not for a year, but
let us say, just for a few weeks, would perish. And every child knows, too,
that the amounts of products corresponding to the differing amounts of needs
demand differing and quantitatively determined amounts of society's
It is self-evident that this necessity of the distribution of social labour
in specific proportions is certainly not abolished by the specific form of
social production; it can only change its form of manifestation. (Marx and
Engels, 1988: 68, )
This view is amplified in various passages from Volume III of Capital. For
For a commodity to be sold at its market-value, i.e. proportionally to the
necessary so-cial labour contained in it, the total quantity of social
labour used in producing the total mass of this commodity must correspond to
the quantity of the social want for it, i.e. the effective social want
(Marx, 1972: 192).
A passage from p. 636 of the same work similarly expands on the law of
valueas it applies to "each total product of the particular social spheres
of production made independent by the division of labour":
what is required is that not only is no more than the necessary labour-time
used up for each specific commodity,but only the necessary proportional
quantity of the total social labour-time is used up in the various groups.
For the condition remains that the commodity represents use-value.
But if the use-value of individual commodities depends on whether they
satisfy a particular need then the use-value of the mass of the social
product depends on whether it satisfies the quantitatively definite social
need for each particular kind of product in an adequate manner, and whether
the labour is therefore proportionately distributed among the different
spheres in keeping with these social needs, which are quantitatively
A similar citation in this vein is from Volume 1 of Capital (Marx, 1976:
Marx begins with a Crusoe story, pointing out that "Nature itself
compels[Robinson]to divide his time with precision between his different
functions. Whether one function occupies a greater space in his total
activity than another depends on the magnitude of
the difficulties to be overcome in attaining the useful effect aimed at."
After discussing the counterpart to the Robinsonian calculations in feudal
and primitive societies, Marx comes to the case of socialism.
Let us finally imagine, for a change, an association of free men, working
with the means of production held in common, and expending their many
different forms of labour-power in full self-awareness as one single labour
force. All the characteristics of Robinson's labour
are repeated here, but with the difference that they are social instead of
individual. . . .
The total product of our imagined association is a social product. One part
of this product serves as fresh means of production and remains social. But
another part is consumed by the members of the association as means of
In such a socialized economy, the (direct) apportionment of labour time
"maintains the correct proportion between the different functions of labour
and the various needs of the
associations," and here "the social relations of the individual producers,
both towards their labour and the products of their labour, are . . .
transparent in their simplicity."
These themes are also to be found in the well known text on planning from
Anti-Duhring (Engels, 1954: 429-30). Engels states that under socialism,
"when society enters into possession of the means of production and uses
them in direct associationfor production, the labour of each individual,
however varied itsspecifically useful
character may be, becomes at the start and directly social labour." Then it
is no longer necessary to express the labour-content of goods in the
'roundabout' form of their exchange-value. Rather, "society can simply
calculate how many hours of labour are contained in a steam-engine, a bushel
of wheat of the last harvest, or a hundred square yards of cloth of a
certain quality." Using this knowledge, "the useful effects of the various
articles of consumption, compared with one another and with the quantities
of labour required for their production, will in the end determine the plan.
be able to manage everything very simply, without the intervention of
>Is there any place in your theory for an
> analysis of the specificities of 'capitalism' and 'socialism' as 'social
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