Re: [OPE] replacement cost and historical cost (again)

From: Ian Wright <wrighti@acm.org>
Date: Thu Sep 03 2009 - 12:23:36 EDT

Michael,

> So in volume 2, rather than describe value as she did in the previous
> volume by adding up the various labors embodied in the commodity, he sets
> up his reproduction scheme. With that setup, reproduction values came
> naturally.
>
> I describe all this in more detail in the book, which virtually nobody ever

I've ordered a copy of your book, since your pointer to the terms
"antecedent" and "co-exising labour" in Marx's work are very useful.
Thanks.

It's interesting because the standard mathematical formula for labor-values,
v=vA+l
can be given many interpretations. Marx's Hodgskin-inspired
reflections on production as a parallel process suggest another, which
is entirely consistent with this formula. The labor-value of a
commodity is the total "co-existing labour", occurring in parallel in
all the different branches of production, that contributes to the
production of that commodity (i.e. it includes simultaneous labor
expenditure in other sectors on means of production to replace those
that get used-up in the production of the commodity). The concept of
"dead" labor "embodied" in means of production has disappeared under
this interpretation.

In equilibrium models we have the tautology that the labor-value of
the real wage equals the total direct labor supplied to production,
i.e.
vw=lq
(where w is real wage, q is scale of production). Under the
"co-existing labor" interpretation this tautology simply states that
the total amount of co-existing labour required to produce the real
wage as output equals the total amount of work done in the economy. So
we have an equilibrium situtation since real wage w is consumed in
lock-step with the supply of labor lq, so the aggregate demand for
labor-time equals the total supply.

This interpretation has been kicking around in my head in a fuzzy way
for sometime, since I have never been satisfied with what "replacement
cost" really means. But now I feel I have some clarity.

Thanks,
-Ian.
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Received on Thu Sep 3 12:28:05 2009

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