[OPE-L:6444] Re: More on prices, technical choices, and values

From: Paul Cockshott (paul@cockshott.com)
Date: Thu Jan 24 2002 - 11:19:31 EST

On Wed, 23 Jan 2002, you wrote:
> >It is quite possible, and Marx makes this clear at a number of places,
> >that where the rate of exploitation is high, capitalist production will use
> >more labour than is socially necessary, chosing to waste labour rather
> >than use machinery. But this is not relevant for determining whether
> >this amount of labour is socially necessary, it only indicates that
> >capitalist production is inefficient by the criterion of socially necessary
> >labour.
> First, where exactly does Marx make this assertion?  I understand him to
> assert more typically that, except transiently, capitalists take care to
> maximize the bottom line, and thus to minimize waste.  Let this passage
> from Volume I represent a number of others that make a similar point:

The locus in Marx is Chapter 15, section 2 of Capital, I.
(Machinery and Large-Scale Industry: The Value Transferred by the
Machinery to the Product).  Pp. 513-17 in the Fowkes translation,
ending "Hence we nowhere find a more shameless squandering of human
labour-power for despicable purposes than in England, the land of
( I am indebted to Allin for this reference)
> > The value of a product by the definition of socially necessary labour
> >does not depend upon which technology the capitalists actually use, since
> >the high rate of exploitation may cause them to find it cheaper to produce
> >the product at a labour expenditure above its value.
> >The extent to which this occurs is a measure of the social product
> >lost due to the accounting system imposed by capitalism.
> I don't agree with this assessment.  You're asserting here that efficient
> techniques may differ from cost-minimizing ones.  But that will not be the
> case under a wide range of input market conditions, including of course
> "competitive" conditions.  I note in this connection that if, as you assert
> two paragraphs above, that capitalists are "wasting" labor, then that means
> they are not minimizing cost.  

No the point is that they typically only pay about 50% of the labour cost
but 100% of the cost of the means of production. This systematically skews
costs away from labour minimisation. This skew becomes worse under
two circumstances:

1. if there is a lot of outsourcing

2. if the rate of exploitation is high

>I've registered my doubts about this
> contention as a general statement of capitalist behavior above.  Here I'll
> just note that even if this were true, it merely modifies my point rather
> than eliminating it.  Since, by your representation, this phenomenon of
> wasting labor occurs only when the rate of exploitation is relatively high,
> then the phenomenon must disappear when wages become relatively higher.  My
> point would still apply for any value of relative wage higher than that
> "tipping point."
It disappears only when the rate of exploitation falls to 0.
> >I dont dispute that in practice the interest rate and the wage rate are
> >relevant for the choice of techniques actually used. What I dispute is
> >that these are relevant for the definition of value.
> It's not the *definition* of value that's at issue here, but the
> determination of value *magnitudes*. If input commodity prices affect the
> choice of technique, and the technical composition of capital varies across
> techniques, then in general they must affect realized value magnitudes.

The issue of definition is relevant here.

If you define value to be the average of techniques used by capitalists
then the rate of exploitation would determine value through its influence
on choice of techniques. If on the other hand you say that the
value of a commodity is determined by that combination of the 
techniques in current use which would if genrally used minimise
the labour content, then values are independent of prices
since we define value in terms of the labour minmising technique
rather than the mean technique. This is one of the abiguities 
implicit in the notion of socially necessary labour time.

> >> But second, suppose that your point was apropos.  Shaik et al's empirical
> >> result in no way guarantees that the indicated result would *always* hold;
> >> we might therefore be a set of technical innovations away from the reverse
> >> outcome, and my analytical point would still be relevant.
> >
> >It is possible, but my suspicion is that the existence a real i.o table
> >with hundreds of products in which reverse reswitching occured
> >is vanishingly improbable.
> That sounds plausible to me.  But my point is that even if this were true,
> the existence of alternative techniques with unequal technical compositions
> implies that labor values will typically depend on relative input prices.
> Or perhaps more accurately, value and price magnitudes will in general be
> simultaneously determined, so that it wouldn't be legitimate to assert that
> values are in any coherent sense analytically prior to commodity prices.
> Gil
Paul Cockshott, University of Glasgow, Glasgow, Scotland
0141 330 3125  mobile:07946 476966

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