[OPE-L:1053] Labour Theory of Value and socialism

Costas Lapavitsas (CL5@soas.ac.uk)
Wed, 14 Feb 1996 04:07:32 -0800

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Duncan [1052] replied to Allin:

'I guesss I really don't agree with this. The labor theory of value
is not a very good theory of relative prices, and I don't myself
think Marx saw it in that light, as I've said before. The big
problem with using embodied labor coefficients as planning tools is
that it effectively sets the interest rate equal to zero, which
leads to a lot of strange investment decisions.'

The mode of appropriation of the surplus part of the labour content
of output in critical in this connection. If, in a socialist economy,
products exchange on the basis of embodied labour coefficients, two
broad possibilities arise: i) workers receive the entire mass of
fresh labour (V+S) as private revenue and (non-capitalist) firms
receive the funds necessary for replenishment of the capital stock
(C). In this case, the state must levy taxes on workers' income in
order to create insurance stocks and for new investment; ii) workers
receive V as private revenue and (non-capitalist) firms receive
(C+S). In this case, taxes must be imposed on firms and clear
guidelines must be issued on the extent of autonomous investment
decisions by firms.

In both cases, a kind of socialist accounting money is necessary.
Credit phenomena can potentially emerge on the basis of the storing
of such money. Under perfect rationing, of course, there is no room
for credit, except for a degree of state credit. Accumulated funds
of individuals and firms could be borrowed by the state to supplement
its expenditure, and a rate of interest could emerge. Under less-
than-perfect-rationing, firms could be allowed to exchange some means
of production, and credit transactions could emerge, based on firm-
accumulated funds. Individuals could also be allowed to borrow and
lend in order to even out their consumption. A rate of interest would
definitely emerge under such conditions, and it could be regulated by
the central planning board.

All this is separate from the issue of how justified we would be to
use the price of loanable funds in order to decide the course
of society's future actions.