# Re: [OPE-L] a paper on Marx's transformation problem and Ricardo's problem of an invariable measure of value

From: Paul Cockshott (wpc@DCS.GLA.AC.UK)
Date: Tue Jul 17 2007 - 04:48:13 EDT

```You argue that *any* definition of
labour-value *must* support a dated interpretation that describes a
hypothetical process of growth. Standard and nonstandard labour-values
share this property. This is due to the irreducibility of the standard
unit of measure.
You say "The reason for this difference is simple. The dated
interpretation of labour-
value posits a hypothetical process that terminates in production at
scale q, whereas
the concept of self-replacing equilibrium posits a steady state that
continually re-
produces at scale q. Call the hypothetical process the `process of
replacement',
or simply `replacement'.

During the process of replacement, however, the sequence of net prod-
ucts, (n(t)), is not consumed by workers and capitalists; rather, the
net products
are reinvested and function as means of production for the next round of
pro-
duction."

This is what I disagree with. The process that terminates at scale q is
not hypothetical but actual even in a self reproducing economy.

Consider a simple corn economy, which, using the standard commodity
allows us to model any such process of production.

Suppose that for each seed of maize sown 100 are harvested. Suppose that
the the maize harvest is 100 million tons and involves 10 million person
years direct labour input. Let us assume that there are 10^6 grains of
maize per ton, which is correct to an order of magnitude. We can then
express the harvest in terms of seeds 10^14 seeds. 10^12 seeds would
have had to be sewn in the spring to produce this. That seed corn would
itself have required
10^10 seeds the previous year, 10^8 the year before that etc. Going back
7 years we find that one seed was the logical ancestor of the entire
crop. (I think by the way it is unrealisitic to define your quantities
as reals rather than integers and rationals, which are all that ever
exists in economics).

If in year -7 this seed had been eaten, there would have been a
shortfall of 100 seeds the next year, and if there was no corresponding
reduction in consumption in year -6, the
Shortfall would be 10,000 seed the next year - growing to the entire
harvest after 7 years.
But this does not imply that the population can not consume the entire
net product each year, it only means that they have to correctly
calculate the set-aside for re-sowing. This set-aside is not part of the
net product. So long as the population eat no more than
99,000,000,000,000 seeds each year production can continue without
interruption.

-----Original Message-----
From: OPE-L [mailto:OPE-L@SUS.CSUCHICO.EDU] On Behalf Of Ian Wright
Sent: 17 July 2007 01:40
To: OPE-L@SUS.CSUCHICO.EDU
Subject: Re: [OPE-L] a paper on Marx's transformation problem and
Ricardo's problem of an invariable measure of value

> A critical step in your argument is in the transition from page 3 to
> page 4. Here you argue that the dated labour values interpretation
assumes a
> growing economy. This seems to me to be too strong. One can interpret
the
> reduction to dated labour in a way that is consistent with simple
reproduction.

This is not the argument. Perhaps you are reading too quickly?

The reduction to dated labour is entirely consistent with simple
reproduction. At no point do I argue that it is inconsistent.

Indeed later, in section 6, I argue that *any* definition of
labour-value *must* support a dated interpretation that describes a
hypothetical process of growth. Standard and nonstandard labour-values
share this property. This is due to the irreducibility of the standard
unit of measure.

> An alternative interpretation of the terms in your expansion (6) is
> simply that the amounts
> Of labour that have to be expended to produce the current output are
> less in each successive previous time period. This does not mean that
> the economy actually used less labour in the previous periods, just
that
> as we go back through the previous years a smaller and smaller portion
> of those years labour was necessary to ensure this years production.

> What is presupposed is not exponential growth of production, but a
> comparision with what would have occurred if part of the depreciation
> fund had been consumed. The dated quantities of labour represent the
> part of the depreciation fund that would have had to have been
consumed
> in previous periods to ensure that there was no net output in the
> current period.

From page 3: "In equilibrium there are multiple, self-consistent
interpretations of the economic meaning of labour-values. This essay
will focus on a `dated' interpretation solely for pedagogical
purposes. The results, however, are independent of the chosen
interpretation."

I find your proposed interpretation overly complex. But it might be an
interesting exercise to apply it to both standard and nonstandard
labour-values and see how they differ. For example, in footnotes and 5
and 8 I apply a marginal interpretation to standard and nonstandard
labour-values in order to further understand their differences.
```

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