From: Allin Cottrell (cottrell@WFU.EDU)
Date: Thu Jun 15 2006 - 11:20:57 EDT
Paul C wrote, of Ian's argument: >> I now think I understand what you are actually doing. You are >> calculating how many hours a worker has to work to buy a ton of >> corn. This is similar to Smiths 'Labour Commanded' view of >> value, which was criticised by Ricardo and Marx followed >> Ricardo on this. and Ian replied: > In simple commodity production prices are proportional to > labour-values and labour-embodied equals labour-commanded... > That these two measures are identical in equilibrium does not > imply a rejection of a labour theory of value... Although I am > no expert on this, I believe Ricardo criticised Smith for not > adhering to a labour theory of value. Paul comes back with: > The point is that Smith had an ambiguity between defining the > value of corn as the labour required to produce corn or the > labour commanded by corn. If there is no 'profit of stock' then > the two are the same, but clearly in an economy with capitalist > exploitation they differ. Ricardo and marx held firm to the view > that labour contained rather than labour commanded was the > appropriate definition. I believe Ricardo's criticism of Smith's "ambiguity" on this point was a bit muddled. As I read Smith, the theoretical role of "labour commanded" (LC) was strictly to serve as a _measure_ (not a determinant) of value or real price. LC for commodity X is defined as the money price of X divided by some measure of the money wage; it's therefore obvious that LC cannot be _explanatory_ of price, in the way that labour-time embodied might be explanatory, and I think Smith understood that point just fine. He also understood that if there's to be any "profit on stock", labour commanded has to be greater than labour embodied. (That is, a worker who produces a commodity in N hours will have to work more than N hours to accrue the wages to buy that commodity.) [Ricardo had a supplementary objection to Smith's LC, namely that since the wage can vary, LC is not a "constant" measure of real price. But then nothing is -- and besides I think Ricardo mistook Smith's purpose for the LC measure, his conception of real price. Smith is thinking of "toil and trouble", and from this point of view, if the wage changes and the LC therefore changes for commodity X, this _is_ a change in real price, not a "rubber ruler" problem.] Paul continues: > [Ian's] numerical corn economy examples give a number for the > value of corn that is the same as smiths labour commanded. > Labour commanded tells you how long a worker has to work to buy > a ton of corn with their wages. Yes, that is interesting, and I think revealing. As I said above, Smith's labour commanded cannot give a basis for explaining prices, since you need to know prices before you can calculate LC. On the other hand, labour embodied can in principle be calculated from technical data alone, and can therefore serve as an independent predictor of prices. I believe this is what Ricardo and Marx had in mind for a labour theory of value. Now in Ian's Sraffian system you don't need prior price data to calculate the LC coefficients for the goods, but you do need to know the rate of profit. This means that Ian's coefficients can't function as the sort of independent explantory factor needed by an LTV. Allin.
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