[OPE-L:2221] Empirical

Alan Freeman (100042.617@compuserve.com)
Wed, 15 May 1996 03:16:05 -0700

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Re: 2210

I'm nearing the end of the current burst so I may not be able to do
this interesting discussion the justice it deserves. I think however
we are for the first time getting onto new territory.

I may not be able to make a complete reply to Allin and I'm content
for him to have the last word. I'm preparing a piece for the next EEA
on the issue which I promise to send to Paul and Allin. I would just
like to correct a few possible false impressions.

"But anyway, the fact that 'there is a labour input of considerable
magnitude in every sector' seems to me eminently a feature of 'the
real world'. If that is what stands behind the narrow distribution of
specific price, that is surely no objection to the analysis."

I have no objection to the analysis and I am sure it shows something
very important. This is a feature of the real world and that is one
of several reasons the work is significant.

I am just not sure it proves everything that has been claimed for it.
In particular, I don't think it proves that unit prices are empirically
indistinguishable from unit values.

>"Someone a lot less friendly than myself is going to catch on".
>The implication here is that the claims made by those employing
>this sort of methodology are more or less fraudulent.

This was an ill-advised choice of words which I withdraw.

I don't think the claims are fraudulent. I do think some of them go
beyond what the data supports. I think that there is a serious problem
that the observed correlations apply not to unit prices and unit values
but to aggregate prices and aggregate values, and I don't think this
has been adequately discussed. In my opinion Marx's value theory
indisputably includes a theory of unit prices and unit values and
the methodology doesn't test this theory. Therefore, I think it is
imprudent to describe the methodology as testing Marx.

I think this is the sort of issue which a neoclassical econometrician
would play havoc with, and I think caution is called for.

Once a half-decent alternative to the current neoclassical view emerges
some very uncharitable people will go through everything we have written
with a finetooth comb. Their aim will be to find any mistake, however
small, and blame it on Marx.

If they find a body of theory which presents itself as having tested
Marx's labour theory of value, and which makes claims that are not
supported by the data, then they will do some very nasty things with it.
I therefore think it is prudent to limit the claims that are made.

>Alan's objection to the 'Shaikh methodology'.

This term worries me. I don't object to anything called the Shaikh
methodology. This is a pedantic point but for me it's a sensitive one.

I am always worried in any case about naming theories after people.
There was a little bit of discussion about this when for quite a long
time people referred to what is now known as the TSS approach as the
'Kliman-McGlone-Freeman' methodology.

Naming theories after people has two undesirable effects. It saddles
the people with everything done in their name, and it diminishes the
theory to the status of a personal view or cult. That's one reason I
am cautious about calling myself a marxist, for example.

In discussing the theory in question, I tried to choose words that made
the debt to Anwar clear without saddling him any conclusions other
than the ones he chooses to draw.

In a separate post to Paul I have suggested that this body of theory
should have a neutral and person-independent name (as does the New
Solution, TSS, Value Form Theory, and so on). My suggestion is
vertically-integrated labour value theory.

>What study is Alan referring to, I wonder?

Any I/O table of choice. Hence in the UK 1984 (p48):

Col Wage Profit Value VA/Wage
1 1380 3848 5228 3.79
2 231 74 305 1.32
3 1187 780 1967 1.66
4 488 17481 17969 36.82
5 297 682 979 3.30
6 2095 828 2923 1.40
7 1172 1080 2252 1.92
8 499 516 1015 2.03


If v=va+l, and if the rate of exploitation and intensity of labour is
uniform, the magnitudes in the last column should all be equal.

Anyone can do this with any set of IO tables. Come on now, it's not a
practical proposition to maintain that aggregate value added per
worker, measured on any basis, is uniform in any known economy. This
just isn't worth going head-to-head on.

"If he means something quite different, all I can say is "Let's see it."

That's a fair request. I hope to supply it as part of my EEA 1997

"but which has not, to my knowledge, been published or subject to any
sort of peer review"

Slightly under the belt. I have not rushed into print, and don't intend
to if it can be avoided, because if there was a public row it could very
well lead to the result that, above, I indicated ought to be avoided.
That's why I am raising it in the first instance here. I've been raising
it privately with rising volume for about two years but it doesn't seem
to have much effect. Please listen. It's a serious problem.

A piece indicating some of these problems in a mild way was submitted
as a discussant contribution to the Bergamo conference. A piece
containing some of the data cited above was circulated at the last EEA
conference. I hope, in the most fraternal way possible, to open up
this discussion at the next EEA. As far as it can be, I think this
should focus on the *positive* developments represented by the use of
NIA statistics to measure value magnitudes, which I think is a decisive
contribution to marxist theory, a term I apply here without reservation.

Part of my aim will be to suggest that this can be logically supported
on the basis of many theoretical perspectives (nondualist, Value Form,
New Solution) without recourse to I/O data. I think there is a basis
for those who want to use IO data, and those who don't, to make common
cause in support of the use of NIA data pioneered by Anwar and I am
worried that exaggerated claims for I/O data may prejudice this.

I hope at the next EEA we can have some discussion on these matters
that will make it possible to reach an accomodation.