[OPE] The Labour Theory of Value: a Marginal Analysis

From: Duccio Cavalieri <d.cavalieri@unifi.it>
Date: Sat Sep 13 2008 - 13:30:59 EDT


   I have read Klaus Hagendorf's heterodox proposal of reformulating the labour theory of value along marginalist lines, and the discussion which followed on OPE-L. Let me make some short remarks on it.

Assuming perfect competitive equilibrium conditions, Hagendorf defines the concept of marginal labour value (i.e. the quantity of labour embodied in a unit increment of output) as the inverse of the marginal productivity of labour (the increase of output due to a marginal increase of labour) which sets the uniform wage rate. But he seemingly confuses the quantity of labour embodied in a unit increment of output with the quantity of labour commanded by this increment, as he obtains it by deviding the money value of output by the wage rate. Further, he regards the marginal labour values of commodities as 'socially necessary labour'. On these grounds he affirms that marginal analysis applied to labour values eliminates any quantitative difference between labour commanded and labour embodied.

He then introduces some questionable neoclassical static equilibrium assumptions and on their behalf he claims to have shown that in long run competitive equilibrium prices of production must be proportional to marginal labour values, reckoned as vertically integrated additional amounts of dated quantities of labour extending back in time and required to produce an additional unit of output (an odd marginalist reinterpretation of Pasinetti's vertically integrated labour coefficients). He concludes that modern economics is not only consistent with the classical definition of the labour theory of value, but that it is built on it. And that Marxian exploitation is easily explained in such framework.

As noticed by Jan Wright, Hagendorf - disregarding the large theoretical evidence originally supplied by Dmitriev and Bortkiewicz and later reproposed and extended by Sraffa - seems to consider both the Marxian 'law of value' (the 'pure' labour theory of value, which has an 'objective' nature) and the marginalist theory of value (a theory of 'subjective' nature, based on utility and scarcity) as logically tenable and easily reconcilable.

As far as I understand, in his paper Hagendorf refers to 'real', standard labour costs. Not to Jan's 'nonstandard labour values', which are the result of a virtual production process, where capitalist consumption is reckoned as an additional social cost of production (in a counter-factual theoretical framework, where capitalists are assumed to consume their entire non-invested income during the replacement process). I do not see why Jan says that Hagendorf's alleged marginalist approach to the labour theory of value "has an important relation to the difference between standard and nonstandard labour values", a subject matter which he is particularly interested in.


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Received on Sat Sep 13 13:42:26 2008

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