[OPE-L:4743] Re: use-value of money

Michael William (mwilliam@compuserve.com)
Sat, 12 Apr 1997 13:07:01 -0700 (PDT)

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Thank you, Allin, for your comments on why collapsing price into value is
an *undesirable* increase in parsimony. Once we move beyond an assumption
of identity between 'explanation' and 'prediction', then I think the
introduction of aesthetic criteria of theory appraisal becomes
problematical. Here, we need criteria of when parsimony is to be invoked.
(Was it Russell or Einstein who made the famous remark about theories being
as simple as possible but no simpler?)

1. I (of course?) don't consider Price to be the same as Value. I raised
the issue to get a handle on what Allin considers to be the criteria of
'good' parsimony.

2. Contrary to his argument for the distinction to be maintained, I do not
believe that market forces, as the (a?) concretisation of value-form
association work by adjusting towards some pre-existent labour-value.
Rather they, imperfectly, constitute and reconstitute values as socially
necessary labour times. Prices are thus the Money expression of Value, that
is its the sole quantitative expression.

3. How is this a 'labour theory of value'? Well, for this we need an
argument that labour is the sole primary factor of production of
Commodities' Value (though not, of course, of Commodities, that are the
contradictory unity of value and use-value). There are several available,
apart from Marx's invalid deduction that there must be some
prexistingsubstance in common that is 'equalised' in commodity exchange.

4. What is the difference that stimulates market feedback mechanisms? Why,
that between prices and costs, on the one hand, and prices and social
evaluation on the other. The 'centre of gravity' is just the central
tendency of the dispersion of prices. Of course manifest prices fluctuate
more rapidly than that which brings them about: the productive potential of
the economy and the needs of valorisation and accumulation.

5. In these processes, value criteria (the needs of valorisation and
accumulation) dominate use-value criteria (that are anyway but an alienated
form of existence human usefulness).

6. This is all, of course, rather conceptually profligate if one has some
single criterion of explanatory power superior to parsimony, such as
predictive success. But for me, successful prediction only tells us
something about what *has to be explained*.

So now I am in some kind of position to comment on *your* reasons for
maintaining a price/value distinction:

>Consider (for the sake of argument, and just to get rid of
>the value / price-of-production distinction for present
>purposes) an economy in which there is a uniform value
>composition of capital.


> Then values provide the 'centres of
>gravitation' for prices. Now, how is the gravitation
>supposed to work?

Well, for me (see above) that cofg is just the central tendency of market
prices, and the feed-back mechanism is initiated by a divergence between
supply price and demand price, themselves manifesting costs of production
and alienated social needs respectively. Such an unregulated market
implementation of the value-form mode of association ensures that the needs
of valorisation and accumulation dominate over production and distribution
in accordance with social needs (whether on 'socialist' or 'communist'

>On the 'standard' account, if the
>aggregate output of commodity X exceeds the quantity that
>can be sold at a price corresponding to value, then we'll
>have P < V, and a competitive adjustment will be set in
>motion whereby the output is reduced, taking us towards the
>re-establishment of P = V. How does one tell this story if
>the excess production of X reduces _both_ its price and its

In fact the unit-LTRP of commodities in excess supply is *increased*: the
labour used to produce those units that exceed what can be sold has in
effect contributed (inefficiently) to the creation of the value represented
in those units which are successfully sold.

> The argument requires a 'deviation' of some kind, to
>which the market adjusts.

See above

> So we're going to need a third
>term, namely the labour-time required to produce the
>commodity (the label 'value' having been withdrawn from this

Well, what we have is in fact a heterogenous bundle of times of different
concrete labours, that are commensurated only by their producst circulating
as commodities. But we do need a third term, in order to conceptualise the
process by which specific concrete labour becomes Value by its product
circulating successfully as a Commodity.

> We'll have to say the adjustment responds to a
>situation where the price is below that corresponding to the
>labour-time required to produce (LTRP) X. Alright, but then
>what job is 'value' doing in the analysis? And what
>determines its magnitude? Is is always just equal to price?
>Is it somewhere in between price and LTRP?

Value is quantitatively expressed only in Price, so there are not two terms
to be 'equalised'.

Dr Michael Williams
"Books are Weapons"

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