[OPE-L:8171] Re: Re: Marx and labour theory of value

From: clyder@gn.apc.org
Date: Fri Dec 13 2002 - 19:21:36 EST

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

> Cologne 12-Dec-2002
> > 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". 

I agree that I am to blame for expressing myself loosely. Conceptually I think
that one should not really speak of the value creating powers of different
labours. What I should have written was that the two techniques for
computing the labour coefficients place an upper bound on the effect 
of using wages as a surrogate for labour time. The use of wages as such
a surrogate is usually justified by saying that the higher wage rates
correspond to higher value creating powers, for my part I consider this
argument rather confused for the reasons I set out in my last letter,
but I just used the conventional terminology used to discuss the issue
in my previous letter - I should not really have done that.

> 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).

No this is where I disagree, both because of the reservation about
value creating potential, and because I consider that the difference
between simple and compound labour applies only within the context
of a given concrete task. I dont think that qua value, different kinds
of labour count differently.

> 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.

My view is that because it is only labours of the same concrete sort
that can be compared for productivity, then it is only in this
context that one can speak of simple and compound labour.

> > 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?

It is justified within the general problematic of classical political
economy from Smith to Marx, which is that society has a certain quantity
of labour that has to be distributed between different activities. In
the absence of special conditions relating to agriculture - dealt with
under the theory of differential rent - a 10% increase in the output
of a given industry will require a 10% increase in labour allocated.
In computing this increase in labour one is automatically performing
an averaging operation over the labour of all the workers currently
employed. If 100,000 are currently employed, we know that a 10% increase
in output will require 10,000 new workers of average ability.

The value of a commodity is just the change in the division of labour
required to increase its production, and here the norm is to assume
an average. The assumption of constant returns here consists of the
minimal assumption. If one has explicit reason to think that constant
returns will not apply then one does not take average labour to 
be regulating - hence Ricardos rent theory.

> 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.

It may strike you as crude, but it does not strike me that way.
It is an approximation, a simplification, but unless one first
examines the simple case, one does not know how significant 
second order perturbations are going to be.
Can you give some reason other than personal preference why this
approximation is to be rejected.

> > 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.

And of course within the framework of i/o analysis that is just
what socially necessary implies. I agree that for long term projections
linear i/o analysis breaks down, but over a perspective of a year or
so - time covered by the i/o tables it is reasonably accurate.
The representation of intractable non-linear systems by locally
linear approximations is a common technique.

> 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).

Obviously any serious work study has to control for the task done, 
if you want to compare two peoples productivity you set them both
to do a standardised task.

> 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).

No you dont have to resort to the value form. As Marx, a poor Darwinist,
remarked the key to the anatomy of the ape is the anatomy of man - that
may be crap, but applied to history and society it has some sense.
If you consider the problem that a socialist society has in allocating
labour then you can understand what the labour theory of value is all
about. Suppose a socialist society wants to rate people according
to the productivity of their labour. How to compare the labour of
a particular dressmaker with a particular typesetter?

Let dressmaker d be 150% as productive as the average dressmaker.
Let typesetter t be 75% as productive as the average typesetter
Equate the average productivities as simple labour, so we get
that d is twice as productive as t. The whole thing makes perfect
sense in terms of the allocation of social labour

> 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)

I think that there is some confusion on Marx's part here.

> 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 broadly agree with this.

> > 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
> profitability?

This relates to the constraints imposed by the necessities of concrete
labour. If one is to produce certain products one has, until 
automation advances sufficiently, no option but to employ expensively
trained labour. As soon as automation or improved work organisation
allows the employment of less skilled labour - that is what
capital does.

> 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
> variable.
> 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.

I doubt this. I suspect that the higher costs of specialised steels
directly reflect the shorter production runs and higher labour intensity
of production.

This is not to exclude the existence of  deviations of prices
from values induced by shortages of certain skilled labours.

> 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
> valorization.)

Yes but these factors relate to price not value.

> 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.

No it has nothing to do with this. It is simply a matter of doing
the national accounts in hours and showing that a rise in education
cost can exhaust the social surplus product.

> > > 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
> > 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.
> 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
> data.

I agree. But I think the F&M explanation is well argued and plausible.
 > 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).
> How is the average hourly wage empirically established, i.e. without knowing
> the aggregate labour hours worked in an industry?

The hourly wage rates in each industry are collated by the
department of trade on the basis of reports filed by firms.

> > 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.

Yes that is the specific relation between levels in the communist
mode of production.

This archive was generated by hypermail 2.1.5 : Mon Dec 16 2002 - 00:00:00 EST