[OPE-L:2497] Re: Was Lenin a nondualist, supporter of the single-system vision

Paul Cockshott (wpc@cs.strath.ac.uk)
Mon, 10 Jun 1996 02:47:10 -0700

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>> Paul C:
>> To say that individual commodites do not sell exactly at their values
>> is not the same thing as saying that commodities in aggregate sell
>> at their value. The latter is a quite vacuous statement.
>Duncan F:
>I think it is a tautology, but like many tautologies, such as f = ma, I
>don't think it is vacuous, since it plays a critical conceptual role in
>the framework of the historical materialist theory of capitalism.

Paul C:
The relationship between force mass and acceleration is not one of
tautology but one of mutual definition of the concepts. The concept
of labour value is not defined in the process of saying that 'in aggregate'
commodities exchange at their values. It is defined independently of
and prior to exchange taking place.

>I don't think Marx had any empirical basis for judging the actual
>"signal/noise" ratio between values and price. But suppose for a moment
>that changes in technology greatly diminished the correlation between
>embodied labor coefficients and price. Would this lead us to reject the
>labor theory of value in the sense of, for example, regarding surplus
>value as an expression of unpaid labor?
>> Saying that commodities in aggregate exchange at their values is vacuous
>> since it would still be true even if there was a zero correlation
>> between prices and values.
>Or a negative one, I suppose. But isn't that exactly what we want in an
>interpretation of the labor theory of value? Marx saw the idea that labor
>is the substance of value as the way to link exploitation in capitalist
>societies with exploitation in pre-capitalist societies. This idea should
>not be conditional on any particular form of competition or configuration
>of market prices, I think.
Paul C:
He and the classical political economists may not have had access to
modern statistical data, and were thus unable to give precise correlations,
but from their knowledge of prices and working practices they certainly
had a basis for making the judgement that prices were almost entirely
determined by labour contents.

If it were the case that in fact they were totally wrong, and there was
in fact no connection between prices and labour contents in the real
world, then we must unequivocally reject the Marxian theory of surplus
value as an explanation of the origins of profit.

Duncan F:
> From a
>purely formal point of view there isn't any argument against taking energy
>or land as the substance of value, as John Roemer argued at length. The
>stipulation that we regard value added as the expression of living labor
>time links the reading of capitalist value relations to the underlying
>human relation of exploitation. I don't think it really makes sense to try
>to ground this point of view purely in empirical correlations.

Paul C:
Your disdain for the real world verges on the platonic, but that is notoriously
the characteristic vice of theoretical economists. Roemer may have argued
at length that energy etc are equally valid as substances of value in some
hypothetical universe. However, in this one, it is labour that determines
exchange value not energy. The empirical evidence for this is very robust.
I enclose a short passage from an article due to appear in the
Cambridge Journal of Economics on this:

"The question arises, however, whether one could produce equally good
results using something other than labour time as the `basis' of value.
The empirical answer to this question seems to be negative, as shown
in Table~2. For the purposes of these regressions we used the Leontief
inverse of the UK input--output tables (Central Statistical Office,
1988, Table~5) to calculate the total (direct plus indirect)
electricity content, oil content and iron and steel content of the
output of each industrial sector. Using the same methodology as in
Table~1 (based on Shaikh, 1984), we then regressed aggregate price on
these various `values', both singly and in combination with labour
values, in logarithmic form. The sample size is 100 for each of these
regressions, the electricity industry being excluded from the equations
including electricity-content, and similarly for oil and iron and

Regressions of price on labourvalues and some
alternative `value-bases'
(4) (5) (6) (7) (8) (9)
constant -.056 | -0.169 | 0.066 | 0.307 | -0.067| -0.263
(-2.06)|(-2.425)|(3.15) |(3.16) |(-2.38)|(-2.47)
labour 1.030 | |0.904 | |1.048 |
(23.76)| |(46.07)| |(36.53)|
electricity -0.009 |0.903 | | | |
(-0.19)|(14.60) | | | |
oil | |0.109 | 0.615 | |
| |(7.43) |(13.29) | |
iron and steel | | | |-0.027 |0.445
| | | |(-1.31)|(7.09)
Adjusted R^2 .953 |.682 | .984 | .639 |.954 |.332
Figures in parentheses are t-ratios. All
variables in logarithmic form. Data source: Central
Statistical Office (1988).

"From equations (5), (7) and (9) it can readily be seen than none of
the alternatives, taken alone, performs anything like as well as
labour. The highest $R^2$, at .682, is obtained for electricity
content, as against .955 for labour in equation (1) of Table~1.
Equations (4), (6) and (8) show how the alternatives perform when
entered alongside labour values, enabling us to address the question
of whether the alternatives contain any independent information, or in
other words offer any marginal predictive power over prices when
labour content is given. Only oil content passes this test. From the
t-ratios (in parentheses below the coefficient estimates) it
can be seen that while labour content retains its statistical
significance in all cases, electricity content and iron and steel
content become statistically insignificant in the presence of labour
content. The fact that oil content contains some independent
information regarding prices is presumably linked to the element of
rent in the price of oil. The North Sea fields are not marginal, on
the world scale (witness the large tax revenues which the UK
government has been able to extract from North Sea oil production).
The price of oil being determined at the margin on the world market,
UK oil will then sell at a price above that which corresponds to its
particular labour content."

>> Paul C:
>> The analysis of the production of surplus value is contingent upon there
>> being a positive correlation between prices and values.
>Here we come to the nub of the issue, I think. Are you really content to
>ground the analysis of surplus value on an empirical correlation that
>might very well have turned out different, and as history progresses, may

Paul C:
If prices were not correlated with values then we would be living
in a different world, one to which Marx's theories did not apply.
Should the passage of time lead to a situation where prices were
negatively correlated with values, something you seem happy to
contemplate, then it would pay capitalists to reduce surplus labour
time to a minimum, as each additional hour worked would reduce
their proceeds. Under these circumstances, the behaviour of
capitalists would be quite different from today.
Paul Cockshott