[OPE-L:3224] Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: re:starting points

From: Ajit Sinha (ajitsinha@lbsnaa.ernet.in)
Date: Tue May 16 2000 - 05:30:56 EDT

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Rakesh Bhandari wrote:

> >
> >So, as far as Marx is concerned, he does not dance around these concepts. He is
> >pretty clear that his value is a quantitative concept and its unit of measure
> >is labour-time. The labor-time that needs to be measured is working of the
> >prevalent technology with average skill and intensity. Abstract labor is
> >nothing but expenditure of human energy in such given circumstances. ajit
> Ajit, you asked me how I would measure value; I then replied that the
> question should be how value is measured in bourgeois society, so then I
> underlined the the need to explore the 3 peculiarities of the value form
> to answer the question you put to me. However, I do not understand how by
> quoting Marx passages you here have answered my question of why Marx
> thought it necessary to clarify that only abstract labor produced value.
> Moreover, what is abstract labor? Why does Marx himself refer to it as a
> phantom objectivity?


Marx's quotations that I chose to present demystifies the concept of value. He
clearly states that value is a quantitative concept. Its unit of measurement is
labor-time. The labor-time that needs to be measured is the work done on prevalent
technology with average skills and intensity. And that in measuring value we add
different kinds of concrete labor, but this does not amount to adding apples and
oranges because value measures abstracts from the forms of concrete labor and only
takes into account the expenditure of human energy irrespective of the kind of work
it is expended on.

As I have explained many times. I have problem with the problematic of value in
chapter one, when it is juxtaposed to the rest of *Capital*'s problematic. In
chapter one Marx's theoretical problematic is essentially of allocation of social
labor through market mechanism. That's why you get couple of notions that creates
theoretical problem for Marx.

One is the dual definition of 'socially necessary labor'. Allong with the above
definition, Marx also suggests that 'socially necessary labor' also amounts to a
given fraction of *total given labor of society* in one branch of production (i.e.
total amount of one kind of concrete labor). So from this point of view, any
misallocation of labor (i.e. market being out of equilibrium) will affect the
socially necessary labor content of a given commodity. Here a technical definition
and an allocational definition comes into conflict. Now, let us look into the
allocational definition more closely (I think you have more sympathy for this
definition). How do we know how much is the total social labor and how much of it is
equilibrium allocation to one kind of concrete labor? The very notion of total
social labor requires us to be able to measure labor. Now, the technical definition
of socially necessary labor gives us a way to do so. Without it, it seems, we cannot
take the very first step. But we know that this definition is in conflict with the
definition we are trying to operationalize. So, let us try another rout. As it is
clear, the allocational determination has no theoretical validity prior to the
determination of the equilibrium position. Now, apart from the neoclassical general
equilibrium analysis, I don't know if there is any economic theory that gives you a
solution to the problem of equilibrium allocation of resources. Neither the theory
in *Capital* nor the classical economics or Sraffa give you a solution to
equilibrium allocation of resources. All you can get is equilibrium solution to
prices that will be compatible with the general equilibrium position. But they do
not have a theory that puts their whole system into equilibrium. That's why you will
find that most of the Hegelian Marxists and others who favor allocational definition
of the socially necessary labor time end up doing (most of the time unknowingly) a
crude variety of neoclassical economics. Rubin is the best example of this. He
actually ends up drawing Marshallian type supply and demand curves on price and
quantity axis to determine Marx's value. He is forced into it because of his general
conceptual position on the problematic of value in *Capital*. If allocation becomes
your central problematic then within the context of economics you will be forced
into accepting some form of neoclassical position. That's why I think the
distinction between the problem of allocation and the problem of surplus production
must be kept separate. As you know, in my 1996 paper (which you have read) I have
argued that for the rest of *Capital* it simply cannot be maintained that the total
social labor is given, thus allocation of something *given* cannot be its central

> And how do you square your answer of abstract labor as energy expended (and
> thus congealed in the commodity) with Marx's later observation that
> commodity value cannot be understood as a physical property of commodities
> at all? This famous contradiction, noted by II Rubin, does not seem to be
> answered in any of your systematic works.


I don't think I ever said that abstract labor has anything to do with the "physical
property of the commodity". I specifically said that abstract labor is expenditure
of human energy irrespective of the form in which it is expended. Thus it has
nothing to do with the physical property or use-value of the commodity.

> Do note that in your above formulation of socially necessary labor
> time--"the labor-time that needs to be measured is working of the prevalent
> technology with average skill and intensity"--you fail to mention in
> bourgeois society it is socially necessary for the value of the commodity
> output of any given capital to be great enough to enable tendential
> realization of the average rate of profit.


The technical definition of the socially necessary labor is independent of profits
or equilibrium etc.

> Now I will happily grant that you I am woefully undereducated about the
> problems in value theory (the admission would have forthcoming if you
> hadn't been blunt or rude)--really do not much whether we are talking about
> the problem of aggregation; the relation between income distribution and
> relative prices; the paradox of higher relative prices for labor intensive
> goods followng upon wage increases; the reconstitution of Aristotlean
> "utility" theory through Cournot's mathematization of the demand function;
> the possibility of negative prices, violent instability,infinite rates of
> profit and other absurdities on the basis of reasonable changes in the
> parameters of the Sraffian model (I have read Meek, Roncaglia,
> Lichenstein, II Rubin and some others, so I have a superficial sense of the
> problems).



> >From an exchange long ago, I remember that you suggested that value theory
> had basically three functions--determination of exchange value, income
> distribution and resource allocation in terms of social reproduction (this
> would be the Physiocratic legacy, I imagine). But the concept variety was
> turned upside down by Darwin. From inter to intra specific and with that
> change went Platonism. So with value. With Marx value becomes the
> cornerstone of a theory of the specific fetishism of a historically
> determinate society, a specific form of exploitation, the social power of a
> uniquely integrated exploiting class and disequilibrium and crisis.
> Economics is turned upside down.


I don't understand this. What I find in most of the Marxist literature (Hegelian
included) is that "value" somehow is treated as somekind of a circus animal, which
*does* a lot of amazing things. My position is that this kind of literature simply
has very little understanding of the concept or the category of value in political
economy or Marx's *Capital*. Value is simply not an animal who has to jump through

> Of course this is an assertion. But based on my reading of Marx, this is
> what I understand Marx to be attempting.


But as a researcher you have to ask hard questions to it in trying to understand
whether what Marx was trying was accomplished or not. If yes how, and if not, why

> And Ajit, I am painfully aware that I am the least smart person on this
> list because it did not ever occur to me to become either an economist or a
> Hegelian philosopher. Being the only person who is neither on this list, I
> ask you not to beat up on the minority.
> Yours, Rakesh


I wouldn't bother to debate these issues with you if I thought you were the least
smart person on this list. I have a feeling that you are doing some good work in
your own area, and you have a broad interest. I'm just trying to be helpful by
attempting to shake up your dogmatism a bit.
Cheers, ajit sinha

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