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Allin Cottrell wrote:
> On Fri, 12 May 2000, Gil Skillman wrote:
> > I agree that assuming price value-equivalence creates a
> > puzzle, Allin, and that the logical answer to the puzzle as
> > Marx poses it is the distinction between the use and
> > exchange values of labor power sold as a commodity. But for
> > several reasons it's the *wrong* puzzle, representing the
> > significance of the labor/labor power distinction in an
> > essentially misleading way.
> I'm puzzled, but prepared to read on...
> > ... price-value equivalence is not an economically
> > meaningful condition for describing an economy that
> > systematically yields surplus value, even in the abstract:
> > it doesn't correspond to the classical system of "natural
> > prices," it doesn't correspond to neoclassical "competitive
> > equilibrium," ...
> Hold on. It would be difficult to maintain that David Ricardo's
> system was not the most highly developed version of
> "classical" theory and of course Ricardo held that natural
> prices correspond closely with embodied labour contents.
Allin, i think i have said it before, but let me say it again. I
think the idea of Ricardo's 93% LTV is a misinterpretation of
Ricardo given by Stigler. Ricardo did not think that his first
modification to the LTV would necessarily be reasonably small.
Actually he admits that it could be considerable. But this was not
problem he was bothered about. Once the deviation of price ratio
from value ratio has been established, no matter how considerable
is, he was concerned about discovering the cause of the changes in
that established price ratio. For both his static as well as
analysis he needed to show that the change in price ratio could
come about by changes in the labor time needed to produce those
commodities (this is LTV for Ricardo). His problem arose because
discovered that changes in distribution also seem to have an
independent influence on the price ratios (i.e. there is a second
cause to the changes in price ratio). He needed to supress this
cause for his analysis. Thus he presented arguments to show that
independent impact on prices of even a great change in
could not be more than 6 to 7 per cent. Thus it could safely be
ignored. But this does not mean that he was suggesting that labor
value ratios and price ratios will generally be not more than 6 to
per cent apart.
On another note: I think Marx's distinction between labor and
labor-power is essentially of critical nature. He is exposing a
weakness in classical theory, particularly Ricardo. The classical
theory of wages is a theory of reproduction of labor-power and not
labor, though the input in production is labor and not
By using the term labor for both the concepts, the classical
economics was creating theoretical confusion.
On another note: I don't think Gil's value-price identity for the
argument in chapter five is very faithful to Marx. It seems to me
that Marx is arguing in terms of labor as substance (as let's say
corn in one commodity model). In this case he wants to show that
even when we assume that equal labor exchange in the market, a
surplus of labor emerges due to a particular exchange that is a
peculiarity of capitalist mode of production.
Cheers, ajit sinha
> > To the contrary, an economy that systematically yields
> > surplus value is *generically* one in which price-value
> > disparities arise, and unless the circuit of industrial
> > capital is *universally* the vehicle for appropriation of
> > surplus value (bear with me for just a second), targeted
> > price-value disparities are to some extent even *necessary*
> > conditions for that appropriation.
> Well, "just a second" perhaps, but If the deal is that
> price-value discrepancies are the /necessary/ basis of surplus
> value I emphatically do not buy it.
> > And now to the key point you raise: restricting attention
> > to the analytically polar (and in no real-world capitalist
> > economy exactly descriptive) case in which the purchase and
> > subsumption of wage labor is the *only* basis for
> > appropriating surplus value...
> No theory worth bothering with is "exactly descriptive". But
> what percentage of surplus value today, would we reckon, is
> appropriated on the basis of hiring the labour-power of those
> not possessed of their own means of production? Seems to me
> that anything without a "9" in front is out of order.
> > Suppose that there are significant disparities in ownership
> > of the means of production, but workers are not entirely
> > expropriated. This is a world, for example, of family farms
> > and cottage industries, perhaps in addition to
> > capitalist-run factories.
> OK, the early 19th century.
> > There are two characteristics of the general competitive
> > equilibrium (simply a point of reference) that emerges from
> > this scenario:
> > 1) Assuming that there is a range of available technical
> > compositions of capital, and individuals can freely choose
> > among (economically feasible) production processes, the
> > wealth inequalities described above will lead to systematic
> > differences in the factor intensity (organic composition) of
> > production, with relatively wealthy producers choosing
> > "constant capital-intensive" techniques and relatively poor
> > producers choosing "variable capital-intensive" techniques.
> > For well-known reasons these differentials will create
> > equilibrium disparities in commodity prices and values.
> > Thus price-value disparities are *characteristic of*, rather
> > than *accidental to*, this scenario of wealth
> > inequalities---inequalities that, in extreme form, Marx
> > takes as a necessary condition for systematic capitalist
> > exploitation
> OK, price-value disparities may well be essential to forms of
> exploitation that existed on the margins of early capitalism.
> > But John Roemer has demonstrated...
> Roemer is smart, alright, but for my part I can't credit his
> counterfactuals with the same sort of importance one grants to
> Marx's attempt to come to grips with the _actual_ mode of
> production that was emerging in his day, and that has since
> taken over the world.
> For the rest, Gil, I think you are too smitten (you're certainly
> not alone in this) with the idea that a normally functioning
> capitalism requires substantial, systematic price-value
> discrepancies. Remember, that is a theoretical proposition,
> based on strong assumptions regarding the equalization of the
> rate of profit and an arbitrary variance of organic
> composition. Paul C and I (and others who've dome empirical
> work) do not find it to be borne out.
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