[OPE-L:3400] Re: objectivity of value

From: Fred B. Moseley (fmoseley@mtholyoke.edu)
Date: Thu Jun 01 2000 - 08:31:09 EDT

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This is a few brief and belated comments on the recent discussion about
Marxian empirical research, in which of course I am very interested.

I agree with Alfredo and Andy B. and Michael P. (and others I might have
missed) that abstract labor is not directly observable as such (and have
argued this point in my empirical papers). The only labor-hours that we
can count and observe is actual, concrete labor. But, according to Marx's
theory, SKILLED labor produces more value per hour than unskilled
labor. However, we don't know what determines the "reduction
coefficients" between skilled and unskilled labor. Some estimates (such
as Shaikh and Tonak's) have used relative wages as the "reduction
coefficients", but I don't think Marx determined these "reduction
coefficients" in this way. I think he simply took them as given, as did
Smith and Ricardo before him. And no one has yet done anything to account
for the different INTENSITIES of labor. Without these reduction
coefficients, I don't see how one can derive reliable, conceptually
rigorous estimates of quantities of abstract labor.

But that doesn't mean that Marx's theory is not about empirical
phenomena! No indeed! Nor that Marx's theory cannot be empirically
evaluated. In Marx's theory, the unobservable magnitudes of abstract
labor are used to explain the observable phenomena of prices,
surplus-value (increment of money), the rate of profit, etc., and also to
explain other important observable phenomena, such as inherent
technological change, conflict of the length of the working day, conflict
over the intensity of labor, etc. Therefore, the way to empirically
evaluate the validity of Marx's theory is to compare its explanatory power
with respect to these important observable phenomena with rival theories.

Several years ago, I published a paper which provides a general empirical
appraisal of Marx's theory, which was a response to Mark Blaug's previous
empirical appraisal of Marx's theory. I would be happy to make this paper
available to anyone interested. I conclude that the explanatory power of
Marx's theory is much greater than the rival neoclassical theory.

On Thu, 25 May 2000, Patrick L. Mason wrote:

> If we don't measure values, how do we know if the rate of surplus value is
> rising or falling?
> How do we know if the organic composition of capital is rising or falling?

I argue that these variables are defined in terms of money prices (all of
which are determined by unobservable quantities of abstract labor).
Surplus-value is defined as delta M for the capitalist economy as
a whole. Constant capital and variable capital are defined as the two
components of the initial money-capital M that begins the circulation of
capital (M-C ... etc.); i.e. M = C + V. Therefore, all of my estimates
of these variables have been in money terms.

> How do we know the difference between the value rate of profit and the
> money rate of profit? Between the rate of surplus value and the rate of
> growth?

In my view, there is no difference between the value rate of profit and
the price rate of profit. There is only one rate of profit - the price
rate of profit, determined of course by relative labor-times. The price
rate of profit is determined in the volume 1 analysis of capital in
general (the total social capital) and then taken as given in the volume 3
analysis of competition (or the distribution of surplus-value, including
prices of production). The assumption that there are "two rates of
profit" is of course a key feature of the "dual system" interpretation of
Marx's theory, from Bortkeiwitz to Sweezy to Steedman, and unfortunately
even to Shaikh. I have argued - and this is one very important point of
agreement between myself and the TSS interpretation - that the "dual
system" interpretation of Marx's theory is fundamentally mistaken.


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