[OPE-L] A three-steps analyis of labour values

From: Diego Guerrero (diego.guerrero@CPS.UCM.ES)
Date: Tue Mar 06 2007 - 05:12:47 EST


Re: [OPE-L] questions on the interpretation of labour valuHi,

 

Suppose we observe facts and see that, period after period, even if the mass of inputs and outputs are changing continuously, production amounts to a certain quantity of money, x, and requires a certain quantity of direct labour, y. Then I say that z = x/y is the monetary expression of labour (or the productivity in money of social labour), no matter whether the magnitude of z is changing or not. This allows me to refer to values in money terms, as Marx did, although I am fully aware that values are certain quantities of (direct plus indirect) labour.

 

(Others may have another theory-different from the LTV indeed-and relate the quantities of money to the quantity of whatever commodity they want. They could obtain the _monetary expression of corn_ for example. They are free to do so, but I would reply that when I go to the movies or the doctor or to cut my hair, etc., or in general observe other production processes I can see corn nowhere, whereas I see labour everywhere when I look at a production process. This is why I consider the LTV a more realistic theory than theirs)

 

Value relations, as a certain form of social labour relations, are completely real facts. Facts that happen in societies and make primarily sense at the social level. But theoreticians may be interested in quantifying specific aspects of the consequences of those facts. That's why some of us want to theorize quantitative ideal quantities of value that represent definite fractions of total social labour. We are legitimized to _define_ those fractions in different ways in order to better capture different dimensions of reality.

 

Now, the main point in my paper (http://www.countdownnet.info/archivio/teoria/521.doc) is that although values are a definite magnitude at the macroeconomic level, they can be quantified in a triple way at the microeconomic level. In the three cases, the cost of a given commodity (an average specimen of its class) is the same: m(A+B), where m are market values in the sense explained below, and A and B the coefficients for both material and _worker-subsistence_ inputs. But the surplus-labour included in the commodity's value can be understood and quantified in a triple, equally analytically useful, way.

 

1. When we think of surplus-value as proportional to the new value included in value, we obtain _direct value_. We do so because we are interested in dealing here with the process of creation of values as well as with the process of exploitation of workers by capital.

 

2. When we assume that surplus-value is proportional to the magnitude of value that capitalists have to advance in production, we obtain _production value_. We do so because we are interested in the _abstract_ process of competition, i.e. competition in a context where only capitalists in the productive sector exist.

 

3. When we assume that surplus-value is NOT proportional to the magnitude of value that capitalists have to advance in production, but rather an adjusted surplus-value (i.e., surplus-value once deducted from it the sum of interest, commercial margin, ground-rent and taxes) is proportional to adjusted costs (where the value-equivalent of interests, commercial margin, ground-rent and taxes is added to the value of material-and-subsistence inputs), then we have the _long-run market value_. In this case we are interested in the process of competition in more concrete terms, where along with productive capitalists there also exist commercial and financial capitalists, the landowners and the state.

 

In case 1, surplus-value included in a (vector of) commodity is mBg (where g is the rate of surplus-value). In case 2, surplus-value is m(A+B)r (where r is the general rate of profit). In case 3, surplus-value is m(A+B)R, where R is the diagonal matrix of actual long-run rates of profits of each sector.

 

Now, call sw, sp and sm the surplus-value calculated according to the three cases. The labour theory of value states that:

 

  1.. swx = spx = smx (where x is the column vector of output) even if at the individual level sw, sp and sm differ.
  2.. costs are always the same at both the individual and the social level (i.e. m(A+B) and m(A+B)x respectively)
  3.. surplus-value are the same at the aggregate level [mBgx = m(A+B)(1+r)x = m(A+B)Rx] even if they differ at the microeconomic level [mBg is in general neither = m(A+B)(1+r) nor = m(A+B)Rx]
  4.. the rate of profit is a quotient between two quantities of labour at the social level: surplus-labour in a period divided by the value-equivalent of constant capital advanced. That is r = [mBgx] / [m(A+B)x].
 

I hope to have clarified my view a little.

 

What do you think?

 

Cheers,

Diego


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