[OPE-L:3202] Re: Value added, IVA and TSS

Bruce Robert (broberts@usm.maine.edu)
Tue, 1 Oct 1996 08:19:10 -0700 (PDT)

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Replying to Andrew's #3168, with a more general reflection at the end:

Actually, I assumed you were working initially and primarily in labor-time,
and only secondarily in money terms. But since you did specify that $1 = 1
hour, and you never made any reference to a change in that equality, I felt
entitled to use $ units in my summary of your numbers, since I was
perfectly willing to accept whatever price premises you wanted to impose.
So, to try to be clear in answering your question, I do recognize that what
you do is calculated in labor-time units, and that you don't deduce your
labor-time magnitudes from any particular premises or data concerning money

In fact, it was those labor-time magnitudes that I disagreed with, and the
point of the second set of calculations was to present an alternative
labor-time accounting that is different from yours but is nonetheless
premised on and consistent with the same *price* data that you worked with
(irrespective of *how* you got to those prices).

I don't agree that "a labor-hour is a labor-hour is a labor-hour." I do
agree, given Jerry's appropriate correction, that an (abstract, socially
necessary) hour of *living labor* is creative of an hour's worth of value.
But a dead or congealed hour, embodied in a prior period, under
technological conditions that no longer correspond to those now in use,
those currently average, doesn't count as transferring an hour's worth of
current value to output. I read Marx as saying that, but I would argue it
anyhow, even if I thought that Marx meant something different, as part of
the sort of contemporary Marxian theory of value I favor. The labor-time
it *formerly* took, under now obsolete technical conditions, to produce
something, is not in my view at all relevant to a labor-time accounting of
current output. But I did try to suggest that the (current) labor-time
expression for the *money paid* as constant (or variable) capital has
meaning (as what I called "historical capital"), and that the TSS rate of
profit, as a return on historical capital, can be derived within my own
simultaneous approach as the ratio of labor-time realized in excess of
historical capital (a fraction of the value added by living labor) to
historical capital. Just as the simultaneous rate of profit can be derived
within TSS as the ratio of "deployable surplus revenue" to the replacement
cost of capital.

So, if we want to, we can each produce the other's numbers out of our own.
But we still disagree, and I'm hardly surprised that you say "In sum, I
can't accept Bruce's numbers, or his conclusions"--for you to fully accept
and agree with my accounting would be for you to drop the whole TSS

But the more important point--to me, at least--is one that I think you
ought to be able to agree with without surrendering your own position. I
believe that the accounting I gave directly answers Alan's challenge,
repeated several times in recent years and stated in #3031:

"Please explain to me what 'assumption' allows A to sell
something to B in such a way that A pays less than B

It appears that the second A and the second B should be reversed to make
the statement consistent, but I think Alan's intent is clear, and the idea
that the numbers that emerge from simultaneous valuation require any such
assumption is simply wrong. You don't have to completely buy into my
accounting to recognize that it is, on its own terms, just as internally
consistent and consistent with the elementary reality of exchange as is
your own approach taken on its own terms. No covert "assumption" has been
made. It would be nice if TSS folks would acknowledge that, even while
continuing to disagree.

Bruce B. Roberts
Department of Economics
University of Southern Maine
Portland ME 04104-9300
(O) 207-780-5503
(H) 207-772-7047
fax 207-780-5507-------------------------------------------------