Re: [OPE-L] iPod and LTV

From: Rakesh Bhandari (bhandari@BERKELEY.EDU)
Date: Fri Jun 29 2007 - 19:06:38 EDT

> Hi Rakesh
>> This kind of accounting probably represents the strongest common sensical
>> rejection of the labor theory of value. Not labor but ideas, genius and
creativity add value. Against materialism for idealism, etc.
> In my mind, "ideas", "genius" and "creativity" are buzz-words for kinds
of concrete labour. So the main issue these facts highlight is that
variable capital represents that part of the material process of
production that is precisely "variable" in terms of the value it adds.
Or do you think there is a deeper issue here?
> Best wishes,
> -Ian.
Value created (as monetarily expressed) by these kinds of concrete mental
labor (product design) does not seem to be proportional to (objective)
abstract labor time or (subjective) toil and trouble expended. That is
what the accounting relayed by Varian seems to indicate, that the labor
theory of value had some relative validity for nineteenth century
industrial economies but is now  a materialist superstition.

How would Marxists speak to this common sense objection to the labor
theory of value?
Or how would a Marxist speak to a company like Altera which makes
programmable chips, spending as I discovered in an informal interview some
$400 million dollars a year on R and D on algorithms and making profit of
28 cents on every dollar (almost 3x the corporate average)? The costs and
difficulty of concentrating the complex mental labor required seems to
have created a barrier to entry (the few companies in the business are all
located in Silicon Valley and no where else, Stanford and UC Berkeley
played an important role in the creation of this product which also
creates questions about academic and business relations). Perhaps because
the market for this kind of chip used primarily I think in testing is
small and not growing rapidly--only about 2 billion a year compared to the
memory chip market which I would get is many tens of times as
large--venture capital does not seem to be financing competitors, yet the
value added in the programmable chip business does not seem explicable in
terms of a labor theory of value.

The value added by creative design and complex mathematical work does not
seem explicable in terms of the expenditure of abstract, homogeneous


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