[OPE-L:4589] Re: Vintages

John Erns (ernst@pipeline.com)
Fri, 28 Mar 1997 13:12:16 -0800 (PST)

[ show plain text ]


In 4585 you begin by quoting me:

> It may seem a bit pedantic but in Ch 12 there is no mention of
> "the MEL." More important, the MEL in CAPITAL captures how
> living labor is represented in the money commodity. If 6s
> represents 1 hour of living labor -- thats that.

and you respond:

Its not pedantic at all. You are right! "MEL" (or whatever you want
to call it) is a designation I use to call this relation and
certainly is not used by Marx (at least using exactly these words).

However, what seems important to me is Marx's analysis in this
example is carried out simultaneously using both measures of value,
labor an money, not only one.

I react:

Technically, for Marx, there is one measure of value -- money.

You continue:

Another point (to be discussed later): I dont think there is a "money
commodity" in Capital. In Ch. 3 there are 2 kinds of money
considered: "gold" and "pounds". This is irrelavant (i.e. this
relation is constant) insofar as we are in very simple situations but
when, for example, technical changes is taken into account we cannot
treat this relation (as well as the "MEL") as exogenous, unimportant,
secondary relations. (In the very example we are discussing Marx does
not speak about "ounces of gold" ("money commodity") but of
"shillings". If in his epoch there was an immediate conversion
between both, this is not relevant today and probably it was not
relevant if he had taken into account more complex situations, e.g.
labor-saving innovations.

I react:

I'm not going to argue that today we are on some sort of gold
standard. Here we are reading Marx. Pounds and gold are part
of the deal. I think he is holding the value of the money commodity
constant to gain clarity on how valuation takes place as technical
change occurs. I maintain that by computing a multitude of MEL's
as technical change occurs, matters become, at best, confused.

Quoting me you continue:

> You want to allow the MEL to vary with this increase in
> productivity
> and thereby keep the hours of labor the same -- before and after
> the change in productivity.

Really, I dont want "to allow the MEL to vary". In the piece I cited,
**Marx allows the MEL to vary** or to be different. I think this is
clear: General MEL is 6s/hour and for the living labor or efficient
capital is 8s/h. Simply I think this is NOT unimportant for the

I react:
Those differing MEL's come from you, not from Marx. Again, for
Marx, the MEL is constant.

Let me skip ahead a bit in your post and get to the essential
point I think you make quite well.

You state that someone could say:

More productive labor CREATES MORE VALUE. Then, let us suppose
that in 1997 there is an increase in productivity in relation to
1996. This means that each unit of labor in 1997 "creates more value"
than in 1996 (the "vintages" approach). This means that despite
total labor time could be reduced in 1997 the same amount (or more)
of value is produced. There is no "contradictory movement" of
commodity wealth (as is explained in Ch. 1). The only important
matter is NATURAL WEALTH, USE VALUES, the productivity of labor:
Physical productivity determines value because "more productive
labor creates more value", as Marx clearly says ... "

I react:

Fair enough. But we both know this is wrong. You'd call those who
say this to task by referring to the differing MEL's. I'd say that
those who do this forget the difference between individual value and
social value. The individual value created remains constant in
Marx's example or as we move from 1996 to 1997 in your hypothetical.
Note that in Marx's example -- the individual value is less than the
social value for the innovator and the social value is less than the
individual value for the non-innovator after the price reduction.
Marx, thus, focuses on the contradiction that technical change brings
forth in valuation. To be sure, in Ch. 12 he refers to the new
technique as one that will eventually prevail given its adoption by
others and the coercive forces of competition. It's my contention
that those forces are not benign given fixed capital of varying
vintages. Or, put another way, we cannot simply assume that
the new technique is simply adopted by others without disruption.

For me, the difference between using individual value and social
value here is a bit like calculating "a value rate of profit"
and a "material rate of profit." Or, if we focus only on the
social values (say, without the immediate price reduction), we
see an increasing rate of profit. If, on the other hand, we
look at that matter in terms of individual values, we see that
the innovator actually is adopting a technique that brings
about a fall in the rate of profit. (without getting into
assumptions about wages, just look at the max rate of profit)
So here Marx is introducing us to the duality inherent in the
process of capitalist technical change. His task then is to
explain how the social value falls to the level of the
individual value and, in so doing, he is forced to show how
and why the rate of profit has a tendency to fall. The
extent to which he carries out this task is another discussion.

By allowing Marx his assumption of a constant MEL, we give him
space to carry on with the analysis. The ever-growing differences
between the individual and the social brought about by technical
change cannot go on forever or the concept of value itself becomes

Now I will grant you that by computing to different MEL's in Marx's
example you are not completely losing sight of the contradiction.
My fear is that the next step in this process of computing MEL's is
to come up with some sort of average MEL. Given technical change,
this average simply grows over time as the basic idea that a
given quantity of labor creates the same amount of value, which
is part of Marx's example, is lost. Increasing the MEL seems but
a way of dismissing the notion of the FRP or of forcing those
who hold fast to the idea of the FRP to adopt a theory of technical
change that only economists can accept. For now, I am willing to
allow Marx his assumption of a constant MEL and read beyond Ch 12.

Let me consider more of your post.

You state:

I agree with you that he "generally" assumes an exogenous and
constant MEL (and that it is given by productive condition in gold
mining). But all this is a result that he considers only simple
situations (for example without technical change). In any case, I am
sure that in this example the MEL 8s/s IS NEITHER GIVEN by gold
production NOR considered as a "exogenous" ratio. Do you agree with
me in this point?

I react:

Note that there are two MEL's for the innovator. One, as you point
out, is 8s/hr. This is based upon the social value created. Yet,
even after the innovation the MEL using individual values is
still 6s/hr. The 6s/hr does seem exogenous; the 8s/hr does not.

In closing, let me pose the following to you. My major problem
with the MEL concept is that it seems to stem from the lack of
a standard of value in modern day society. Rather than say as
Marx does a given amount of money represents a fixed amount of
labor, you say that a fixed amount of labor is represented in
varying (generally increasing) amounts of money depending upon
the productivity of labor. With this idea of the MEL, we
are forced to consider the varying value of money itself as
techniques change. This seems to simply create difficulties
in an analysis that is already problematic.