[OPE-L:8165] Re: Marx and labour theory of value

From: Michael Eldred (artefact@t-online.de)
Date: Thu Dec 12 2002 - 16:24:53 EST

Cologne 12-Dec-2002

Paul Cockshott schrieb 09 Dec 2002 11:16:05 +0000:

> Quoting Michael Eldred <artefact@t-online.de>:
> > > PC: 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.
> >
> > ME:
> > 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'.

If there is any confusion here, it is your own, since, without correcting
you, I merely adopted your mode of expression when you wrote: "differential
value creating powers of different labours" (sic) and claimed the effect is
"quite modest". The question stills holds substituting 'labour-power' for
'labour'. According to Marx's formulation, complicated labour-power creates
more value than simple labour-power in equal periods of time. So we agree
that there is this difference is value-creating potentials between
different, concrete kinds of labour-power (but see further below, where you
apparently deny this). The question is how to gain any empirical access to
this difference _without_ proceeding through the value-form, since the
labour that forms the purported substance of value must be independent of
the value-form if it is to be its causal determinant.

> Labour, in Marx's scheme, does not have value
> generating potential.

I presumed that we both know that.

> On the contrary labour is value. What has value generating
> potential is labour power.

Yes, and labour-power is always concrete -- except when it confronts the
wage-form, whereby it assumes an abstract pallor.

> 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.

That is the claim made by the LTV. You are now obviously understanding
"socially necessary" as "socially average". What is the justification for
this? Why not "socially minimum" or "socially median", e.g.? How is the
qualification "socially" to be empirically or even theoretically specified?
You are apparently understanding "social" here as a simple aggregate, as a
set of factual data. Such a mass-aggregation of the social dimension to a
set of data represents a crude ontology of the social dimension.

> 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.

And thus the differences in value-creating potential of skilled or unskilled
labour-powers of the same concrete kind are cancelled out -- only the
average counts. But this is only with respect to the same task.

> 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.

If "socially necessary" is defined as "of average productivity", then by
definition, differences in skill are reduced to the average.

> 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.

Now you are shifting from different workers working on the same task to
whole industries which comprise not only "hundreds of thousands of workers"
but also tens of thousands of occupations and at least tens of thousands of
concretely different labour-powers. How do you compare the concrete labours
of, say, an electrician and a welder? There is no simple measure of
productivity just in terms of time. Time to do what?

> 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.

There are enormous differences among houses built (ranging, say, from luxury
mansions to cheap little huts) and dresses made (ranging, say, from haut
couture to simple, basic smocks). Do you also want to average out houses to
the average house and average out dresses to the average dress? But what are
these things -- even conceptually? What is an average house and an average

If the average builder builds h average houses in a week, and the average
dressmaker makes d average dresses in a week then what does it mean to
equate "the two averages"? Since a house is the final result of the labour
of at least hundreds of different individual trades, and a dress likewise,
there is no way to simply equate h houses to d dresses (unless it be through
the value-form).

It seems to me that to be consistent, you would have to negate all
differences whatsoever among concrete labour-powers and concrete labours by
reducing uniformly to durational time t. But this would contradict your
previous admission that there are "differential value creating powers of
different labours".

> 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 no 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 presume that you mean by "more worthy" "more value-creating". That would
mean that different kinds of concrete labour-power of average quality, no
matter whether one kind of labour is complicated and the other is simple,
create an identical amount of labour value in the same mathematically
measurable time t. But Marx claims just the opposite in Kapital Chapter 1:

"Complicated labour counts only as _potentiated_ or rather _multiplied_
simple labour, so that a smaller quantum of complicated labour is equal to a
larger quantum of simple labour. The fact that this reduction is constantly
taking place is shown by experience. A commodity may be the product of the
most complicated labour, but its _value_ sets it equal to the product of
simple labour and therefore itself represents only a certain quantum of
simple labour." (MEW23:59 emphases in the original)

This setting equal takes place on the market for the products of the
respectice kinds of labour, and nowhere else. It means that value-content,
in Marx's conception, cannot be measured simply in labour-time t, but rather
that each different kind of concrete labour has a coefficient (a multiplier)
which brings the value-creating potentials of different labour-powers into
line with each other. This coefficient or multiplier, however, is determined
only by the equating _on the market_ through the value-form.

You now apparently dispense with this multiplier or coefficient of
value-creation in your version of the LTV, and so depart from Marx's
formulation of the so-called law of value. Such a departure is in line with
the Cartesian _Rules_ (_Regulae_), according to which phenomena are to be
grasped purely quantitatively in order to gain certain and reliable
knowledge of them. You reduce all the different concrete kinds of
labour-power to a homogenous, abstract labour-power whose exercise can be
measured purely by a mathematical time variable t (where t should not be
confused with the phenomenon of time as such). The only requirement is that
the labour-power has to be averaged over all the factically available
labour-power of a certain kind. The factical total performed labour of a
certain kind  is then defined to be socially necessary labour-time, which is
then spread as an average over individual labour-powers.

This reduction of performed labour (a highly complex and differentiated
phenomenon) to an abstract homogeneous labour measurable by a mathematical
time variable t is akin to Newton's first law of motion of physical bodies
(and Galileo's earlier preliminary formulations of the same law) which
cannot tolerate any differences in space. A total homogenous space is
"imagined" (mente concipio, Galileo 1638). Why? Because otherwise there
would be no _mathematical_ access to the phenomenon of motion formulable in
a simple law amenable to a mathematical interpretation and calculation.

> 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.

Again, you apparently mean by "worthy" "value-creating"?

> 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.

A highly trained engineer earns much, much more that a simple manual
labourer, regardless of whether education costs are footed by the state or
not. Your argument here is highly counter-intuitive. If surplus-value
production were greater through employing simple labour-power, then why
should there be a tendency within the development of capitalist economies to
shift more and more to the higher end of the so-called 'value-creation'
chain (value being understood now in the sense of 'realizable in money'),
requiring more and more highly trained labour-power? Why is the market value
of the total product of highly developed economies such as Switzerland with
highly trained workers per capita immensely higher than economies based
largely on simple labour? Why are certain developed industries (such as the
chemicals industry in Germany) dependent upon a highly trained, but very
expensive workforce (say, of engineers and chemists) to maintain their

I agree that, according to the LTV,  the varying value-creating potencies of
labour-powers of various kinds cannot be read off the differences in pay
scales. If one professional worker is paid twice as much on average than a
worker in another occupation, this does not imply that twice as much value
is created by the former worker compared to the latter. But you are here
denying (contrary to previously -- see above), it seems, that there are
differences in value-creating potencies of labour-powers at all. And that is
quite consistent of you. A mathematical treatment cannot tolerate such
differences. Differences are reduced to the average with greater or lesser
variance around these averages.

An alternative way of thinking to the LTV would be to allow the qualitative
differences in labour-powers, labours, use-values, commodities, etc. to have
their full weight and to dispense with the attempt to provide an explanation
of commodity prices in terms of a simple, abstract, mathematically amenable

E.g. there are hundreds of different types of steel suitable for various
different uses. To make highly specialized (say, super strong, super
lightweigt) steel requires specialized know-how that is not generally
available among steel workers en masse. The high quality of this steel is
acknowledged on the market in higher selling prices by those consumers
(other capitalist enterprises) which similarly make high-quality,
specialized steel products (say, aircraft). It is not the amount of
additional labour that is reflected in the higher prices of high quality
steel (relative to the prices for run-of-the-mill steel churned out by heavy
industry with little know-how), but it is the especially high quality of the
labour-power, i.e. its special _know-how_, which enables a higher price to
be had for high quality steel on the market and which enables higher wages
to be paid for highly trained labour-power.

But the acknowledgement of special know-how in higher attainable market
prices lasts only as long as the use-value of the specialized steel is
required for special applications (e.g. aircraft), themselves requiring high
levels of know-how which, in turn, are acknowledged in higher prices on the
market. If the demand for certain use-values declines (e.g. people do not
want to fly as much), the high quality of the steel-making labour is for
nought. It gains no adequate additional recognition in the marketplace, and
the specialized steel company has to think again how it can have its
know-how honoured in higher prices (than run-of-the-mill steel) achieved on
the market.

The specialized steel worker with the know-how to make high-quality steel
does not create value when he labours, nor is it simply labour that is
acknowledged in the value-form when the product is sold. Rather, the selling
price is the abstract, quantitative acknowledgement of _all_ the qualitative
aspects of the high-quality steel commodity, including its usefulness for
particular applications, the labour performed, the know-how involved in
making such a high-quality product, etc.

The phenomena of branding and advertising and product design also show that
not only labour is recognized socially in product selling prices, but also
perceived use-value. The perceived use-value (and all use-value is
perceived) on the part of consumers, their desire to have and use a product
can be influenced by making the product appear to be a cut above the rest
(successful branding), or by inventing a new use-value through product
design (games are a good example). There is no fixed set of use-values.
Rather, use-value itself is a social phenomenon constantly in a state of
flux depending on how things _show themselves_ in their usefulness to
members of society. In capitalist society, this self-display of products is
mediated by the value-form of money, and is also honoured in the money-form
in the shape of enhanced prices (which, say, justify the enormous pay
package for a successful product designer). (In your paper with A. Cottrell
you yourself refer to "the development and application of new technologies;
the development of new products..." as factors enhancing capital

What I am proposing as an alternative to the LTV amounts to enriching the
concepts to suit the richness of the social phenomena instead of going in
the opposite direction of abstracting from the phenomena to make them
mathematically manipulable (in your case through statistical methods).

> 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.

This apparent dilemma seems to be a consequence of your postulation of an
abstract, homogenous labour as the substance of value. Then, a highly
trained production engineer with a lot of know-how will 'create' an equal
amount of value as a simple rig worker.

> > ME (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 consistent 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 problem is the conceptual problem of how to empirically identify that
labour which counts as "socially necessary" and whose measurement in
labour-time therefore is supposed to regulate, in some fashion, monetary
prices. Your procedure plainly relies on taking the brute aggregates,
levelling off all differences by way of averages and abstract positing, and
then claiming that the result is value substance measured in time.

> 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.

A "close and systematic relationship" between national labour accounts and
monetary accounts established by means of statistical analysis does not yet
say anything at all about causes. Causal relationships have to be
theoretically explained in a persuasive was and used to interpret empirical

> > ME 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.

I agree, with the proviso that you homogenize the substance of labour-value
more than Marx does (see above).

> 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.

That would be only different workers on the one task, but there are myriad
different tasks and kinds of work requiring different levels of know-how. To
obtain a measurable phenomenon, these differences have to be eliminated.
Thus, you are left only with time as "duration", i.e. a mathematically
amenable variable t.

> 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.

Here I disagree in line with my objection above not so much regarding the
differences between "multiplied" and "simple" labour discussed by Marx,
which should not be taken as synonymous with simply differences in skill of
the same type of concrete labour, but more fundamentally on the basis of the
violence done to the phenomena of qualitative differences in labour-powers,
use-values, commodity goods, etc.

> 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.

How is the average hourly wage empirically established, i.e. without knowing
the aggregate labour hours worked in an industry?

> > ME 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 a better (i.e. phenomenally truer) alternative, namely, that it is
the acknowledgement of labour performed in an industry in the selling prices
achieved that determines post factum (in a feedback loop fashion) whether
and how much that performed labour is valued. Capitalist enterprise is
driven by the search to have performed labour acknowledged in the money
value-form at the highest possible rate compared to costs.

> There is however, one consequence of this that was
> not fully appreciated by Marx, nor by most subsequent commentators, this
> mechanism predicts that the equalisation 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.
> > ME 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.

That is at least consistent communism. A total social cybernetic plan for
production and distribution can only fulfil this total control by abandoning
the value-forms altogether. The issues then become those of the politics of
production and executing the total social production plan efficiently and
adequately. The sociating medium of money is replaced by the sociating
medium of power and power struggle.

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