[OPE-L:7085] Re: Re: the value[s] of labour power, nationally and internationally

From: Diego (diego.guerrero@cps.ucm.es)
Date: Sun Apr 28 2002 - 17:26:05 EDT

Re Jerry's [7049]

Diego wrote:
> I think that the "historical and moral element" of the VLP refers to the regional (national) definition of this commodity. All commodities are historically defined: <snip, JL>. Therefore we need to define different national levels of the VLP at each moment in historical time, 
Jerry wrote:
> I agree. The question then becomes (relating it to the original context of Simon's question):  how can we make  quantitative international comparisons for the values of labour power?   If we can't do that, then we can't really say much about the disparities between the values of labour power and wages globally.>>

When you want to compare internationally the VLP you may be thinking of either labor-values or credit-money-values. If the former, we have to take into account that a bigger amount of commodities in country A (more developed) entering in the workers' basket may represent less quantity of value that a smaller amount of commodities in a less developed country. If the latter, we have to consider a second factor too: the different value of money in both countries, i.e. their different ratios between the labor they perform in their financial systems and the national mass of money in each case. All that does inform us about disparities between the VLP and wages globally.

You are probably referring to another related issue. If we start from national data (either labor or money data) we won't generally arrive at the same results that if we had at our disposal worldy data, which is not the case. Well, this is one of the many statistical limitations we have to face.

> i.e. I think Marx meant that all others commodities (in the general case of the LTV) would tend to have the same price throughout the world, but this would not be the case for the labor power.

>I beg to differ. There are *many* commodities that are sold at different market prices in different markets in the global economy.  E.g. consider the price of new (or used) housing internationally (or even often regionally within a nation.) Or, consider the price of milk in different markets internationally.  Or, consider the markets prices for different forms of entertainment such as ticket prices at movie theatres. Or, consider the market price for health care (where it isn't nationalized  or subsidized.)   Or, consider the market price of maize, tobacco,  and coffee in different international markets. Or, consider the market prices of  electricity, coal,  oil and gasoline  internationally. Or, consider the prices  of   the same pharmaceuticals *even when they  are produced by the same transnational  corporations* when sold in different national markets.  Etc. Etc. Etc.  I think  that the "law of one price" (LOOP) was *not* advanced by Marx (certainly not as a "law"  -- perhaps only provisionally as a simplifying assumption) but has instead been advanced by  some Marxist economists who want to simplify the quantitative calculations and have solvable equations  in models and illustrations.  As an empirical matter,  I think that even the much *milder* claim that most commodities are sold at the same market price in international markets can not be sustained  -- indeed, I suspect that the # of exceptions is greater than the # that conform to the alleged "rule".>>

I was writing about "the general case of the LTV", i.e. supposing there is no non-reproducible commodities (land and other commodiities obtaining a rent) nor taxes, transport costs, etc. Of course, if we are starting from different national VLP we have to assume different values for many services and other non-wordly-tradable commodities, which leaves more room for differences between empirical prices and the regulating ones (those which interest mostly to students of the LTV). By the way, in a theoretical model a simplifying assumption may be a law, at least in the same way that in the most general model in Capital (the book) there are only two classes whereas in the concrete historical analyses by Marx (see, for instance The class struggles in France) there a lot of different classes, fractions of class, etc. I do think that LOOP is a tendential law in Marx's theoretical thought, which does not amount to back up the PPP theory of exchange rates.

> I think that some elements in Leontief and von Neumann models are pure mathematical elements, and may and should be detached from their material components. For instance, one can dettach the instrumental way in which Alfred Marshall or Joan Robinson drew some curves and use them for different purposes without any need for sharing Marshall's or Robinson's ideas about the capitalist society.

The issue isn't one of pure mathematics. The issue is whether a particular mathematical technique does justice or injustice to our understanding of a particular socio-economic question.  E.g. there is nothing wrong with linear algebra or one-sector models from a mathematical perspective -- yet they are highly problematic tools if we are attempting to model non-linear and dynamic social processes.  Thus, the Von Neumann model (like the Harrod model and other one-sector models) exhibits a "knife-edge" problem which should tell us that such models have very limited applications.  Also, on a more general note, I think that when considering whether techniques used by marginalists should be adopted for convenience sake by Marxists for a particular task, we have to be very careful that we aren't unwittingly importing marginalist assumptions and theory  into our analysis.>>

Yes, we have to be very careful when adopting "marginalist techniques". But also when adopting Marxist techniques or ideas that are not in Marx and that in some cases plainly contradict Marx. For instance, I think that the LTV shows a great advantage compared to the surplus approach theory (or "absence of theory"). Marginalism can be used with independence of neoclassical ideas. Historically Cournot proved this in 1838. And in the present day we shoudn't have any problemas in using limits, derivatives, etc., when --in order to measure inputs-- we use a continuous physical quantity (time; of course: time of labor) that, contrarily to the discrete physical quantities of the supporters of the surplus approach, does allow us to make a legitimate use of such mathematical instruments.



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