Re: measurement of abstract labor

From: Allin Cottrell (
Date: Wed Jul 21 2004 - 19:35:55 EDT

On Tue, 20 Jul 2004, ajit sinha wrote:

> --- Allin Cottrell <cottrell@WFU.EDU> wrote:
>> On Mon, 19 Jul 2004, Rakesh Bhandari wrote:
>>> A=B
>>> B=C
>>> Therefore, A=C
>>> xdollar equals y of a composite commodity that
>> requires z labor hours
>>> to produce; hence x dollars is equivalent to z
>> labor hours. From this
>>> equivalence one can calculate the MELT and the
>> "value of money".
>> Why would one use such a roundabout and error-prone
>> means of
>> calculating the MELT?  The obvious approach is
>> Foley's: take the ratio
>> of the money-value of net output to the aggregate
>> labour time embodied
>> in that net output.  This is both easier -- given
>> the available
>> official statistics -- and more accurate.  Your
>> proposal contains an
>> arbitrary and potentially fluctuating element,
>> namely, the
>> relationship between the price-to-value ratio for a
>> "small" composite
>> commodity such as the one Greenspan allegedly uses,
>> and the
>> price-to-value ratio for social output as a whole.
> ___________________
> Allin, you should have made it explicit that the
> aggregate labor time embodied in the net output in
> Foley's system assumes that all unskilled labor is
> abstract labor. Thus abstract labor is already assumed
> before money comes into the picture. All the talk
> about the money doing the abstracting leads to MELT
> melting away before one's eyes.

In context, this assumption did not seem particularly germane.  I'm
comfortable with the assumption myself (i.e. I don't think that it's
money per se that "does the abstracting").  I agree with what might be
the burden of your message, namely that the MELT is a fairly trivial


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