From: Paul Cockshot (email@example.com)
Date: Mon Dec 09 2002 - 06:16:05 EST
Quoting Michael Eldred <firstname.lastname@example.org>: > > 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. > > Paul. > 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? > 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 generating 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 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. 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 VILC. 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 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 > 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 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. 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 Value. 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 obtained 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 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. Yes, but what is the problem with this. This is how Marxists understand the 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 discussed in volume 3 will not occur. It predicts that industries with high organic 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 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). 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 terms 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 alternative 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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