[OPE-L:8129] Re: Marx and the labour theory of value

From: Michael Eldred (artefact@t-online.de)
Date: Thu Dec 05 2002 - 11:49:05 EST

Cologne 05-Dec-2002

clyder@gn.apc.org schrieb Wed, 4 Dec 2002 22:09:22 +0000:

> Quoting Michael Eldred <artefact@t-online.de>:
> > Only the second method is at all relevant for the LTV and it assumes that the
> > total
> > (recursively added up) wage bill, which can be broken down into the total
> > number of
> > hours of labour performed, has something to do with the magnitude of value
> > considered
> > as the socially necessary labour time embodied in the commodity product.
> > Access to
> > labour-times is only _through_ the wage value-form, which is used to obtain a
> > number of
> > hours. But how does one distinguish between the various purported
> > value-creating
> > potentials of different concrete labours?
> I dont see that this is relevant at this point, though there are
> other issues for which it is relevant.
> The method of deriving hours worked by dividing by the mean hourly rate
> in each industry has the effect of reducing all labour to hours abstracting
> from
> a) the different concrete forms of labour in different industries
> b) the possible different skill levels in different industries reflected in
>    some industries having higher wage levels than others.
> This then acts as a form of sensitivity analysis - if we get a 95% correlation
> even with this forced reduction of all labours to simple labour, then the
> effects of differential value creating powers of different labours must
> be quite modest. That is not to say it does not exist, just that it is not
> an enormously influential effect.

Then the conceptual distinction between the purported differences in
value-generating potentials of simple vs. skilled labour falls through the mesh of
such an empirical-experimental set-up?

> > > PC: The R^2 that one obtains from the latter method for the UK is about
> > 0.95 as
> > > against
> > > about 0.97 for the former method.
> I said that from memory, checking it again today the ratio was the other
> way round, one got a slightly better result when expressing everything
> in terms of actual hours than when one simply used vertically integrated
> labour coefficients. This would indicate that inter-sectoral differences
> in wage rates reflect more differences in the rate of exploitation than
> differences in value creating power.

(Quantitative) exploitation is a concept dependent upon a concept of labour content
as value-creating. Only then can surplus-value be attributed to surplus-labour. Such
purported quantitative exploitation is to be distinguished from the domination of
productive activity by the capitalist principle of (attempted) augmentation of
monetary value.

> > > The regression coefficients are impressive (which I will accept for the sake
> > of the
> > argument, without studying the mathematics in detail --Paul Cockshott and
> > Allin
> > Cottrell "Does Marx Need To Transform?" http://www.wfu.edu/~cottrell/vol3.pdf
> > ).
> > Empirically applied probability distributions are able to extract
> > regularities from
> > masses of data previously not amenable to mathematical analysis. But, as far
> > as I can
> > see at the moment, the latter method too makes the same assumption regarding
> > complex
> > labour -- or else it reduces all labour to simple labour. The high
> > correlation you
> > obtain seems to be that between total recursive labour input costs and the
> > selling
> > prices of commodities. Since these total wage costs include the break-down of
> > constant
> > capital into wage costs, and rent components from natural conditions of
> > monopoly are
> > excluded as "outliers", this is not surprising, since the sine qua non of
> > capitalist
> > production is that advanced capital returns at least without having been
> > diminished.
> > Employing the aggregative methods of mathematical statistics is like seeking
> > shelter in
> > large numbers -- in the long run and on the whole, capital manages to
> > valorize, i.e. to
> > more than recover its total recursive labour input costs.
> If we just did that, your criticism would be justified, but we only
> excluded 2 industries out of some 80 or so. We also publish the figures
> for correlation with and without the oil industry and both are strong.

This seems to be a misunderstanding. I am not criticizing that certain data relating
to natural conditions of production have to be left out of your statistical

> > ME: Once one has made the leap from the temporal to the monetary dimension, the
> > entire
> > apparatus of mathematical statistics stands at one's disposal. That is why I
> > am
> > concentrating on how times are derived from the data precisely through the
> > value-form
> > of wages.
> What is wrong with using wages to work back to time ?
> We had access to hours worked per person per week for each industry and
> for weekly wages. We also had the total wage bill of each industry. Making
> the assumption that there were 20 days holiday a year, one can from this
> get a pretty good estimate of the number of hours worked in each industry.

What is wrong with using wages to work back to time? In my view: lots. Of course,
one can do it. But what does it say conceptually? An aggregate of hours of labour
then stands in relation to an aggregate of selling prices of commodities. But is
this any different from putting aggregate recursive wages into relation to an
aggregate of selling prices of commodities? I.e. whether labour-power at work over
time is value-creating is irrelevant for these calculations. The test is insensitive
to this difference. What we have are factual monetary quantities put into relation
to each other, nothing more, nothing less. The money is the recognition that
something (a commodity product, or a specific kind of labour-power) is worth
something socially.

The labour theory of value, however, claims that the total labour-power expended in
a certain time has created the value of the total commodity product finally realized
on the market in selling prices. Moreover, according to this theory, the
value-creating potential of the various labour-powers depends on the various levels
of skill (is that measurable in terms of complexity or complicatedness?) and
intensity of that labour-power at work. As far as I can see at the moment, your
empirical analyses do not measure what they purport to measure, viz. the
value-creating potential of human labour-power.

> > > PC: This is obviously the case, in that if one had no concepts one would
> > not
> > > know what one wants to measure. But one's preconceptions do not
> > > determine the results of what you measure.
> >
> > That's true. But the results also have to be interpreted. What I am
> > questioning is
> > whether the empirical analysis you describe is a test of the LTV at all but
> > instead
> > represents a validation that capitalism is capitalism, i.e. that on the
> > whole, money
> > capital advanced returns augmented.
> I think that in essence the law of value derives from this
> very point.

I think that the law of labour value has no bearing on the empirical findings (cf.
above). If the reduction of wages to labour content drops out of the picture, you
are left with the same results, namely, that on the whole, each sectoral capital
succeeds in recouping its advance of money capital, which consists mainly of
(recursive) wage costs. That allows the high correlation between wages costs and
selling prices. Capitals which do not succeed in recouping capital advanced go to
the wall over the short or long run.

> > ME: The fact that I/O tables were invented in the context of USSR production
> > planning
> > through Gosplan, I think, highlights my objection. In a total social
> > production plan,
> > production inputs, including labour inputs, are sociated in the plan itself
> > -- and not
> > via the market. The sociated form of the products of labour is not (monetary)
> > value but
> > the overall plan itself in which each kind of labour and each product of
> > labour has a
> > concrete, differentiated, albeit aggregated position -- not simply an
> > abstract validity
> > as an amount of money.
> >
> > Gosplan represents an historical attempt at consciously sociated labour. The
> > conscious
> > planning by some sort of political apparatus replaces the sociation via the
> > marketplace. The markets become merely places of distribution according to
> > foreseeing,
> > precalculative planning. Instead of the dissociated self-interests of
> > producers,
> > workers, managers, landowners, financiers, etc. primarily driving economic
> > activity
> > through the mediation of the various sociating value-forms, the motor of
> > consciously
> > sociated socialist production is politics itself, with all the inertial
> > inefficiencies
> > of bureaucracy and all the conscious political manipulation and individual
> > abuse that
> > this is heir to.
> >
> I agree with this point in general.
> The i/o tables we have available are deficient compared to those available
> in planned economies, and one has to go to considerable pains to extract the
> real data from the monetary form in which they are presented. Allin
> has demonstrated however that there are valid procedures by which this can
> be done. If I recall he did this in a paper to the Working Group on Value
> theory a few years ago.

Strange that you agree in general. As I see it, value is a concept of sociation
pertinent to a society (capitalist society) which is economically sociated through
market exchange. Under Gosplan, by contrast, the production and distribution of the
country was consciously sociated (whether it worked or not is of no consequence
here) through the plan itself. In particular, labour contents are concretely what
they are and are concretely sociated through the plan in being alloted to various
sectors, places, times, etc. There is no abstract value but only concrete factors of
production which are treated concretely in the overall plan, albeit that they are
reduced for the purposes of planning to concrete magnitudes.

The wonder of capitalism is that the sociation of economic activity works through
such abstract forms of value, with each participant in pursuit of self-interest, a
serious game with a high degree of adaptability (if an enterprise goes broke, change
is enforced). This can only be because the value-form is itself substanceless. Value
is an abstract relational (i.e. social, _pros heteron_) form connecting one member
of society with another. The groundless principle of capitalist economic life is
that money capital must maintain and augment itself through its circuit. Somehow or
other, this groundless and substanceless principle succeeds in motivating the actors
of an economy and also in delivering a material standard of living (with large
standard deviation).

_-_-_-_-_-_-_-_-_-_-  artefact text and translation _-_-_-_-_-_-_-_-_-_
_-_-_-_-_-_-_-_-_-_-_-_-_-_-_- made by art  _-_-_-_-_-_-_-_-_-_-_-_-_-_
http://www.webcom.com/artefact/ _-_-_-_-_-_- artefact@webcom.com
_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_-_ Dr Michael Eldred -_-_-

This archive was generated by hypermail 2.1.5 : Fri Dec 06 2002 - 00:00:00 EST