# Re: [OPE-L] questions on the interpretation of labour values

From: Diego Guerrero (diego.guerrero@CPS.UCM.ES)
Date: Sun Feb 25 2007 - 15:25:28 EST

```> Ajit wrote:
I'm guessing that by "market prices" you mean prices that you
OBSERVE in a given market. So if we find that a blue
jeans is sold for \$100 then you say it's "market
value" is equal to 100 hours of labor. Leaving aside
what "market value" could mean, could you tell us on
what basis you could say something like that?
__________________________________________

Diego:

Your guess is wrong because I am not saying something like that. My view is:
if the whole mass of blue jeans produced all along the year and all across a
country (or the entire world) is sold for a sum of money that, once divided
by the number of blue jeans produced, gives us an average price of \$100 per
unit, then I say that its “market value” is equal to 100 hours of labour.
That is quite a different thing from what you said.

__________________________________________

A:

Furthermore, since "prices of production" I guess, in
your scheme, cannot be observed, what meaning can be
given to the statement that 'if prices of production
of a blue jeans is \$200, then its "production value"
would be 200 hours of labor? And same for direct value
and direct prices--whatever they may mean.
_______________________________________

D:

See below

_______________________________________

A:

> (2) What is the difference between direct values,
> production
> values and market values and similarly with prices?
> _______________________________________

D:

When all prices and values are understood as averages in time and space, the
difference between them is the following. The market price is actual price
in the sense in what you say: “in 2005 the price of a digital TV in the
world market was \$x”. The price of production corresponds to a different
price: the one that would equalize the rates of profits in all sectors
included TV sector. The direct price of the TV is the price that would
equate the rate of surplus-value in that sector with the average rate of
surplus-value in the entire economy. Only market price is real, the other
two are ideal or conceptual prices.

In my view, each of those prices, as they differ quantitatively between
them, are the monetary expressions of different quantities of labour
provided we realize that the only real quantity of labour is that of the
market value whereas the other two are ideal ones.

_______________________

A:

(3)Where does euro or dollar come from? Remember!
> you
> are in your theoretical world, where you have
> apparently taken a set of production equations for
> the
> production of your commodities and wages for labor
> etc. If you have specified a relationship of this
> system with euro or dollar then make it explicit.
> Otherwise, you have no option than to take something
> like gold or silver, which is produced as a
> commodity
> in your system of production, as a measure of your
> money variable.
> _______________________________________

D:

In my answer I quoted others and then you said:

A:

straight question, you are quoting other people. I
don't care about what other people say, I want to know
how in your theory a particular entity figures in. You
should know it best and should be able to explain it
best. Why quote anyone else? You say, "for every
commodity I translate from labour to money by using
"the average, social productivity of labour in terms
of money", please explain how do you do this.
__________________________________

D:

“As for the exact quantification of π [i.e. "the average, social
productivity of labour in terms of money"], and having into account that
total output holds invariable through both transformations (see below):

(9)        wx = px = mx,

we reach the result that π can be defined either in gross terms (what we
call π1):

(10)      π1 = mx/lx

= px/lx

= wx/lx

or alternatively in net terms (π2):

(11)      π2 = m·(I-A)x / lx

= p·(I-A)x / lx

= w·(I-A)x / lx

Therefore if we call all the A-values simply α, and all the B-prices β, we
can express every horizontal movements going from A to B and vice versa in
Table 1 as done in equation (12), whereupon we can conclude that this kind
of movements are simply a sort of “translation” from one language to
another, which can be checked in the apparent chaotic way of expression of
Marx in Capital, that is not but the result of this double correspondence:

(12)            β = α ·π;

(or:    α = β/π)”

And as I noted in another email: “Of course, the magnitude of π1 is not the
same as π2, but the fact that they are respectively, let us say, 30 euro or
60 euro per hour of labour does not make any difference as regards the
problem involved. So we will simply speak of π from now on.”

All this means that, as it is seen in equations (10) and (11) you can use
any of the three forms of price and any of the three forms of value since in
the aggregate the totals of values amount to the same magnitude, and the
same happens to prices.

__________________________________

Ajit:

In any case, let me guess what you are trying to say.
You say that you take the dollar value of the net
output produced in a year and make it equivalent to
the total direct labor spent in a year. The ratio of
total direct labor and total dollar value of the net
output you DEFINE as "labor value of money". Now
remember, your dollar value is based on the "market
prices". So your labor value of money can only give
you your "market value". This is nothing but calling a
person John and Jack at the same time. But it does not
John has a nick name and people close to him like to
call him Jack. Where do you go from here? Cheers, ajit
sinha

_________________________________

D:

Let me guess at my turn. I guess that both your price of production and your
market price are defined in dollars, but their magnitude is different. Then
this is nothing but calling a person Peter and Paul at the same time. But it
does not