Re: [OPE-L] Question

From: ajit sinha (sinha_a99@YAHOO.COM)
Date: Tue Apr 10 2007 - 07:10:33 EDT

--- Allin Cottrell <cottrell@WFU.EDU> wrote:

> That, I believe, is a mistake: it is warping the
> definition of
> value to match market price (hence my "dissolving"
> comment).
Its not only a mistake, it simply cannot be done.
Anybody who comes down from verbal statements and
tries to work out the meaning of the proposition
through mathematical example will quickly learn that.
I have discussed three major ways by which the money
argument is brought by Marx in the value theory and
their failures in my paper,‘Some Critical Reflections
on Marx’s Theory of Value’, in Value and the World
Economy Today, (eds.) R. Westra and A. Zuege,
Palgrave, 2003. But not many people seem to have seen
it. In any case, here is a short excerpt from the
paper that shows where Jerry might be coming from and
why it does not work (I have taken one interpretation
here but all other interpretation would fail in a
similar way):

Another strategy of relating labor to commodity
exchange ratios is provided in Marx’s famous letter of
July 11, 1868, to Ludwig Kugelmann. In this letter
Marx writes,

… All that palaver about the necessity of proving the
concept of value comes from complete ignorance both of
the subject dealt with and of scientific method. Every
child knows that a nation which ceased to work, I will
not say for a year, but even for a few weeks, would
perish. Every child knows, too, that the volume of
products corresponding to the different needs require
different and quantitatively determined amounts of the
total labour of society. That this necessity of the
distribution of social labour in definite proportions
cannot possibly be done away with by a particular form
of social production but can only change the mode of
its appearance, is self-evident. Natural laws cannot
be abolished at all. What can change in historically
different circumstances is only the form in which
these laws assert themselves. And the form in which
this proportional distribution of labour asserts
itself, in a social system where the interconnection
of social labour manifests itself through the private
exchange of individual products of labour, is
precisely the exchange value of these products. (Marx
and Engels 1982, 196).

This letter has been invoked most frequently in the
defense of Marx’s ‘labor theory of value’.
Unfortunately the meaning of the passage quoted above
is not “self-evident”. Leaving aside what every child
might or might not know, let us analyze the statement,
“And the form in which this proportional distribution
of labour asserts itself, in a social system where the
interconnection of social labour manifests itself
through the private exchange of individual products of
labour, is precisely the exchange value of these
products.” Does this mean that in a
commodity-producing economy the exchange ratios
between commodities are determined by taking the
ratios of total labor employed in various sectors?
This interpretation will have no problem only in a
situation where there are no means of production in
the system. In that case the ratios of total labor
spent in various sectors of the economy will be the
same as the embodied labor ratios of commodities. This
case, however, is not interesting; not only because it
is universally agreed that the so-called simple labor
theory of value is valid in such cases, but more
importantly, a capitalist mode of production is
inconceivable without means of production. Once we
introduce means of production in the above given
interpretation, we find that the above proposition
comes to naught.

For example, let us assume there are only two sectors
in the economy producing two commodities x and y, and
the system of production is given by:
10x + 10y + 10l --> 30x     (1)
10x + 5y + 10l --> 30y     (2),

where l represents simple homogeneous direct labor
measured in terms of hours of labor. By the usual
embodied labor measure it can be easily verified that
in this system of production the value of x is equal
to 7/8 hours of labor and the value of y is equal to
3/4 hours of labor. Thus 1x should exchange for 7/6y
according to the simple labor theory of value.

Now, let us interpret Marx’s above statement in the
light of our given production system. Here 10 hours of
labor in total is distributed to the production of 10
units of net output of x. Thus the value of x should
be equal to 1 hour of labor. Similarly, 10 hours of
total labor is distributed to producing 15 units of
net output of y. Thus the value of y should be equal
to 2/3 hours of labor. And the exchange value of the
two commodities turns out to be 1x for 3/2y. When we
impute these values of x and y so determined to our
means of production in the system, it turns out to be:

10 lx + 20/3 ly + 10 l --> 30 lx     (1’)
10 lx + 5 ly + 10 l --> 30 ly   (2’),

where lx and ly represent values of x and y
respectively. Since all the l’s are simple homogeneous
labor time they can all be added up and the arrows
should be replaced by the = sign. However, as it is
quite clear from (1’) and (2’), in this case the left
hand side of the equation will not be equal to the
right hand side of the equation. Hence defining the
labor values and the exchange values on the basis of
distribution of total labor not only gives a measure
different from Marx’s own practice but, more
importantly, leads to contradiction when means of
production are measured consistently on their basis.
Thus any attempt to erect a defense of labor-values on
this basis must lead to a dead end, and can only
create verbal confusion.

Cheers, ajit sinha

It's here! Your new message!
Get new email alerts with the free Yahoo! Toolbar.

This archive was generated by hypermail 2.1.5 : Mon Apr 30 2007 - 00:00:16 EDT