Re: value and labour

From: Andrew Brown (Andrew@LUBS.LEEDS.AC.UK)
Date: Tue May 13 2003 - 05:24:33 EDT


> So if value is a subjective estimate of the consumer and an unknown
> and unobservable entity to the seller, then how does it or how can it
> possibly  come to regulate exchange and production in bourgeois
> society? That's my first question.

Prices are, in general, objective. They are regulated by values,
quite apart from the subjective estimates, or observations of
anyone. This occurs as an unintended consequence of individual
actions. It is a mistake to consider that the fundamantal social
causes are always known to social individuals. Social outcomes
can be unintended consequences of individual actions.

> Shouldn't we look for some theory of prices and profits which makes no
> appeal to  variables which are unknown, unobservable and practically
> ignored in the processes of price and profit setting?


> Since the Sraffian theory seems to do just that--no value, no
> preferences, no metaphysical posits--shouldn't we adopt it on the
> basis of what some would call Ockham's Razor? As Ajit reminded us, we
> don't even need an unknown, unobservable and practically ignored
> entity like surplus value to solve for prices and profits with the
> development of simultaneous equations. Why do we have to posit the
> existence of this peculiar substance of abstract labor? That's my
> second question.

Ajit has also argued (not on OPE-L though) that Sraffian theory is
fundamentally limited due to the fact that any two Sraffian systems
are incommensurable. The difference between the two systems
need only be the presence of a commodity in one system but not
in the other, that is enough to disallow any comparison of value
betwen the two. No doubt I have Ajit's argument wrong, but the
above argument regarding commensurability is what I think, at
least. Such incommensurability severely limits Sraffian economics
in two respects: at a more abstract level, the nature of value is
presupposed but not elaborated upon; at a more concrete level, it
is difficult to work out how Sraffian analysis can be developed to
enable concrete explanation.

> Perhaps Marx's  theory of value has been validated by the occurence of
> the developmental tendencies which he predicted on its basis
> (alternation between prosperity and depression, concentration and
> centralization, absolute increase in the size of the exploited
> proletariat, rising rate of exploitation, development of the world
> market, absolute growth in the industrial reserve army of labor and
> surplus population) . But I can see no other basis for concluding that
> the substance of abstract labor has explanatory power over prices,
> profits, rent and wages. And the task of validating Marx seems
> difficult. And Gil (as well as Daniel Little) would of course argue
> that these developmental tendencies can be "derived" simply from the
> proper institutional specification of capitalism; there is no need for
> the theory of value.

With an absent or incorrect grasp of what value is, Gil and others'
attempts that you mention must contain contradictions. Grapsing
what value is removes the contradictions. It also sets on a different
path of economic explantion, as you know I would point towards
the work of Fine and others as better grapsing Capital and
capitalism. The distinction between OCC / VCC and TCC proves to
be important here, e.g. in grapsing capitalistic development, crisies
and TRPF.

> What do you think of the empirical attempts to validate the labor
> theory of value as an explanation for prices?

They are certainly interesting!



> Yours, Rakesh

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