[OPE-L:8145] Re: marx and labour theory of value

From: Paul Cockshot (wpc@dcs.gla.ac.uk)
Date: Mon Dec 09 2002 - 06:16:05 EST

Quoting Michael Eldred <artefact@t-online.de>:

> > The method of deriving hours worked by dividing by the mean hourly
> > 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
> 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
> > be quite modest. That is not to say it does not exist, just that it
is not
> > an enormously influential effect.
> Paul.
> Then the conceptual distinction between the purported differences in
> value-generating potentials of simple vs. skilled labour falls through
> mesh of
> such an empirical-experimental set-up?

I think there is a conceptual confusion in this question. You speak
of the 'differences in value generating potentials of simple vs 
skilled labour'. Labour, in Marx's scheme, does not have value
potential. On the contrary labour is value. What has value generating
potential is labour power. Labour time is value, but the actual labour
time of one individual only counts as value to the extent that that
individual spends the social average amount of time on a task. The more
skilled worker will take less time than average, the more skilled 
more time. In forming an average, such deviations from the mean
are ignored. 

When one deals with a large group of N workers within a trade, the
time taken by that N to complete a task will be well
approximated by assuming that N workers of average skill
were engaged on it. Marx reckoned, if I recall, that when
more than 10 workers were employed on a task skill differences
could be neglected. This is obviously particularly relevant
to factory production. 

The empirical studies that I have done have involved whole
industries, each employing hundreds of thousands of workers
and with such large numbers, differences in individual skills
are invisible. That is not to say that there is not a line
of empirical research that looks into the levels of variation in skill
that exist within given trades. That, however, was not my
interest, nor is it directly relevant to tests of the law
of value.

Conceptually here the important thing to recognise is that these
differences in skill only have an effect within one given task or
specialisation, and relate to differences in the productivity of 
concrete labours. One can say that builder A is more skilled than
builder B if A completes a job in 2 weeks that would take B 3 weeks.
One can make a similar comparison between the skill of dressmaker
C and dressmaker D, by looking at how many dresses a week they
can make. What one can not do is make a direct comparision between
the labour of builder A and dressmaker D. One can only relate them
indirectly by comparing each with the average builder or dressmaker
and then equating the two averages. 

The point is that differences in skill apply within a trade, between
trades what applies is the abstraction from concrete labour to 
abstract social labour. There is not, in Marx's scheme, any prejudice
with regard to some trades being more noble or worthy than others.
There is not surplus value proper to, or specific to, a profession.
Builders are not more worthy than dressmakers, nor are professors of
agriculture more worthy than plumbers.

I suspect that the reason why intellectuals make heavy weather of this
reduction of skilled labour to average labour is that for them
it has a hidden sub-text. It is seen as an us and them issue. It seems
to them to touch on a class distinction between intellecgtuals
and the proles. Intellectuals in general dont like the idea 
of manual and mental labour being equated - they gripe about
plumbers earning more than professors.

Now of course professors tend to earn more than most manual
workers, but this does not mean that their work is more worthy.
Indeed, in Marx's scheme their work was in general worthless -
since it was unproductive. But leaving that aside, does an hour's
labour of say a professional petroleum engineer count as
more value than an hour's labour of train driver?

The professional engineer will be paid more, but that relates
to the cost of reproducing her labour power not to the value
added by one hour of her labour. This distinction is important
as becomes evident as soon as one considers the length of the
working day. To the extent that the costs of education are
not directly met by the state, the engineer would have to
be paid a higher annual salary to amortise the debts incurred
during their training. Suppose this requires an additional
salary of euro 5000pa. But this does not pass over to the
value each hour of their labour creates as can be seen by
considering the effect of reducing the working week.

If the working week is reduced to 35 hours, then over time the
petroleum industry will still have to meet the cost of 
reproducing the labour of its engineers which will still
be euro 5000pa, but now has to meet this out of 35hours a
week value added. The point is that the amortised cost of training does
not vary with the working week wheras the value added does.
A sufficient reduction in the working week in an economy with
high education costs will entirely eliminate surplus value.
Skill aquired through education appears on the debit rather
than the credit side of the national accounts.

> >
> > I said that from memory, checking it again today the ratio was the
> > way round, one got a slightly better result when expressing
> > in terms of actual hours than when one simply used vertically
> > labour coefficients. This would indicate that inter-sectoral
> > in wage rates reflect more differences in the rate of exploitation
> > differences in value creating power.
> (Quantitative) exploitation is a concept dependent upon a concept of
> content
> as value-creating. Only then can surplus-value be attributed to
> surplus-labour.

I would disagree with this slightly I would say that surplus
value is a concept internal to the labour theory of value. This theory
provides a consitent system of national accounting. The question
at issue in our original discussion was whether this system of
accounting accurately mirrors the money accounts. If there is 
a close systematic relationship between the two, then causal
mechanisms that are established at the level of the labour
accounts can be expected to cause corresponding changes
at the level of the monetary accounts.

My contention is that for the UK and several other economies such
a close and systematic relationship has been established and that
this relationship subsists whether one is using labour hours
as one unit of account, or vertically integrated labour coefficients
Thus I feel justified in using the concept of surplus value to
discuss the slight differences that exist between the correlation
values obtained by the labour time and VILC approach.

> > Employing the aggregative methods of mathematical statistics is like
> seeking
> > > shelter in
> > > large numbers -- in the long run and on the whole, capital manages
> > > 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
> > for correlation with and without the oil industry and both are
> This seems to be a misunderstanding. I am not criticizing that certain
> relating
> to natural conditions of production have to be left out of your
> analyses.
> > > 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
> 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
> > for weekly wages. We also had the total wage bill of each industry.
> > the assumption that there were 20 days holiday a year, one can from
> > get a pretty good estimate of the number of hours worked in each
> What is wrong with using wages to work back to time? In my view: lots.
> 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
> insensitive
> to this difference. What we have are factual monetary quantities put
> 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
> something socially.
> The labour theory of value, however, claims that the total
> expended in
> a certain time has created the value of the total commodity product
> realized
> on the market in selling prices. Moreover, according to this theory,
> value-creating potential of the various labour-powers depends on the
> 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
> your
> empirical analyses do not measure what they purport to measure, viz.
> value-creating potential of human labour-power.

This I think relates to the conceptual difference that I went into
above. I consider that in the Marxian theory of value, VALUE tout court,
is simply a synonym for labour. Exchange Value on the other hand
is something different - something that appears through the market.
The proposition of the Law of Value, is that VALUE regulates Exchange

Within this problematic, the only sense in which the 'value creating
potential of human labour-power' makes sense is in terms of the duration
of the labour. Skill enters the determination only to the extent that
a skilled worker completes a task faster than an unskilled one.
The problematic does not allow one to say that labour in say the
edible fats industry is more worthy than that in textile products,
each are simply different forms of concrete labour into which the
national labour force flows. 

The only circumstances in which skill in the sense relevant to
the problematic of the labour theory of value would enter into
the empirical figures is the following:

Let us consider a particular trade - say electrical artificers, and
assume that these are employed by both the car industry and the
bakery industry. If for some reason the electrical artificers in the
car industry were on average faster at completing a given task
that occured in both industries, then the figures for hours
worked by electrical artificers in the car industry would be too
low relative to the hours worked by electrical artificers in the
baking industry.

However, given that 

1. the number of electrical artificers employed
in each industry will be substantial, the chances of systematic
differences in skill levels between these two large
samples is low

2. the number of trades employed by each industry is large, only some
of which are common to other industries, so the chance of the baking
industry systematically having less skilled workers in all the
trades that it has in common with the car industry is even slighter

I would therefore expect the error in the aggregate labour hours
by dividing the wage bill of each industry by its average hourly wage
to be a fair representation of what Marx's meant by the newly added
labour in each industry.

> > > That's true. But the results also have to be interpreted. What I
> > > 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
> (cf.
> above). If the reduction of wages to labour content drops out of the
> you
> are left with the same results, namely, that on the whole, each
> capital
> succeeds in recouping its advance of money capital, which consists
mainly of
> (recursive) wage costs. That allows the high correlation between wages
> and
> selling prices. Capitals which do not succeed in recouping capital
> go to
> the wall over the short or long run.

Yes, but what is the problem with this. This is how Marxists understand
law of value as operating. There is however, one consequence of this
that was
not fully appreciated by Marx, nor by most subsequent commentators, this
mechanism predicts that the equalisationa of the rate of profit
in volume 3 will not occur. It predicts that industries with high
compositions of capital will have lower rates of profit than those with
low organic compostions of capital. This result is not anticipated by
a simple view that money capital advanced must get its return.

> > I agree with this point in general.
> >
> > The i/o tables we have available are deficient compared to those
> > in planned economies, and one has to go to considerable pains to
> 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
> > 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
> through
> market exchange. Under Gosplan, by contrast, the production and
> 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
> what
> they are and are concretely sociated through the plan in being alloted
> various
> sectors, places, times, etc. There is no abstract value but only
> 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
> 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
> 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
> 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
> large
> standard deviation).

As a communist my principle concern in economic investigation is to
come up with better planning mechanisms for communist economies.
I only get into discussing value under capitalism to establish that

capitalist economies - behind the scenes - are doing calculations in
of labour times.

One of the points Allin and I make in writing on communist economies is
that a deficiency of the gosplan accounting system was that it did not
use labour time calculations sufficiently in deciding between
possible projects. We hold that the integration of macro and micro
planning would be better if labour accounts were used explicitly instead
of Roubles.

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