Re: [OPE-L] The Use-Value & SNLT Question

From: Paul Cockshott (wpc@DCS.GLA.AC.UK)
Date: Tue Apr 10 2007 - 17:43:09 EDT

I think you misunderstand me.

I did not use market prices of commodities in general to measure value. I used
market prices of labour power as one way of estimating labour input. I also
computed the clock time as well using figures for actual wage rates.

The method of calculation for the two estimates was as follows.
1. Value/price correlation for all industries assuming uniform wage rates. A
    dummy wage rate of 1 per hour was assumed to be uniform accross all industries.
    On this assumption the labour content of the outputs of all industries was calcu-
    lated. The assumed wage rate was unrealistically low, but this is of no significance
    in computing the correlations since it is equivalent to a uniform scaling factor in
    our time unit. In this and all other cases, the variables enter the regressions in loga-
    rithmic form. Pil industry was excluded.
2.  Values assuming non-uniform wage rates. In practice wages differ between indus-
    tries. The actual hourly wage rates for the different industries in 1984 were ob-
    tained from the New Earnings Survey and used to convert the monetary figures
    for direct labour into hours. Again the oil industry was excluded from the final re-
Estimate   Equation                      R2 maximum standard devi-   average ab-
                                             error   ation of errors solute error

estimate 1 price = -.039 + 1.014 labour 0.98 65.4%     16.5%           11.8%
estimate 2 price = -.046 + 1.024 labour 0.96 67%       20%             15%

This indicates that in both cases the correlation of final market prices to the estimate
of labour value is very high, but that it is slightly higher in the case where one
assumed a uniform wage rate which is equivalent to assuming that 1000000 wages in a high wage
industry bought in the same amount of value creating labour as 1000000 wages in a low wage
industry - ie that more skilled labour both costs more and adds more value.

Paul Cockshott

-----Original Message-----
From: OPE-L on behalf of Michael Perelman
Sent: Tue 4/10/2007 4:56 PM
Subject: Re: [OPE-L] The Use-Value & SNLT Question
I know that you are a serious empirical scholar, but in the US, professions staffed
by women tend to pay less than those typically staffed by men.

If market prices are good enough to measure value, why not just use market prices &
forget about value?

On Tue, Apr 10, 2007 at 04:35:26PM +0100, Paul Cockshott wrote:
> I have done it in two ways.
> In case 1 I assume that wages have already equated different levels of
> skill and just divide the
> wage bill of each industry by the national average wage.
> In more detailed calculations I have used sources other than the I/O
> tables to obtain
> hourly wage rates for each industry and then worked back from the wage
> bill of each
> industry to the hours actually worked. In this case one is saying that
> even if one
> industry has more skilled labour than another we are treating an hour in
> each industry
> as being the same - ie, we are trying to go back to clock hours.
> -----Original Message-----
> From: OPE-L [mailto:OPE-L@SUS.CSUCHICO.EDU] On Behalf Of Michael
> Perelman
> Sent: 10 April 2007 16:32
> Subject: Re: [OPE-L] The Use-Value & SNLT Question
> How in the world do you measure SNLT in practice?  Do you take wage
> rates as an
> indicator of multiples of abstract labor?  Do blacks or women represent
> less SNLT?
> Or do you just assume that all hours of labor are equal?
> --
> Michael Perelman
> Economics Department
> California State University
> Chico, CA 95929
> Tel. 530-898-5321
> E-Mail michael at

Michael Perelman
Economics Department
California State University
Chico, CA 95929

Tel. 530-898-5321
E-Mail michael at

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