[OPE-L:4914] Re: determination of real wages

riccardo bellofiore (bellofio@cisi.unito.it)
Mon, 5 May 1997 05:55:28 -0700 (PDT)

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Alejandro finds my last post "cryptic". I apologize for that, though I fear
that he will not be relieved by this one. However, this is a second try:

(i) I maintain that the most coherent proponents of the value-form
approaches, which stressed the inextricable link between abstract labor and
money in the first chapters in Capital have abandoned the notion of labor
as substance of value altogether. For references (and names), see my paper
in the Review of Radical political Economy. This is the collapse of
production and circulation.

(ii) The New Solution, and the single-system interpretations in all the
variants are linked to the notion of a monetary equivalent of labor; the
inverse is sometimes called the value of money. This is taken to be given.
But where, and why? Whereas Duncan is quite rigorous in defining it as an
ex post variable, the reasoning in the others is not quite clear. If it is
ex-post, it is again derived from the metamorphosis on the market in the
final exchange of commodities. I maintain that in this way there is no
substantial difference from the Sraffian determination of prices, once its
prices of production are seen as ctualy realized on the market. Moreover,
this value of money is in fact derived from the world of prices -
symultaneously. The Marxian sequence value-rate of profit - prices is lost.
BTW: saying that Marx took the value of money as given (1.000.000 quotes),
seems to me to be begging the question, when that sequence is gone, and
when no other justification is given.

(iii) I maintain that money is crucial before final exchange, because the
buying of labour power by capital is in money terms *before* production and
final exchange, that is before the metamorphosis of commodities into money
as analysed in the first chapters of Capital. BUT if it is so, I do not
find nothing really wrong in saying that IF we study the determination of
relative prices after production, with given inputs and outputs, we can
speak of surplus labour and necessary labour without in the same phrase
speaking also of money, and all that. The crucial role of money within the
labour theory of value must shift, in my view, from money after production,
money realising dead labour, to money before production, money buying
living labour. And if it is not possible to speak in terms of the immanent
measure of value (labor), notwithstanding the fact that the latter is not
operational, Marx is gone.

(iv) Most people on this list give ridicuolous characterization of Sraffa,
while they want that each word of the master (Marx) is respected, etc. I
find the acrimonious answers to Ajit simply wrong, because the quality of
his reading of Marx is much higher than the quality of the others's
readings of Sraffa). BTW, Sraffa's own model, with few amendments, is
*compatible* with the "postulate" in the New Solution, and with the "value
of money" notion, etc.

(v) Ajit takes value theory as = to relative price theory. You take it = to
the first three chapters in capital, irrespective of price determination.
This is why you both will quarrel forever. You are very clever, and hence
say Ajit and others to stay on the terrain of the interpretation of the
texts. But I find that a good interpretation of the text must explain why
for a century a(n alleged) wrong reading of Marx was taken by most parties
as the true one. If that is not done, that is not a good interpretation (in
my view). And please, don't take in politics.

(vi) My finance-cum-value in production model *before* the final exchange
wants exactly to escape from the crisis in Marxian value theory which was
produced EXACTLY from the stress on the link between value and money
through the value-form analysis; and wants to escape the redundancy
argument. Hence, my answer to the question: about what is the labour theory
of value about? my answer is the origin of surplus value. It was all
already written down in my RRPE paper: if you wants arguments, look there.

(vii) The crucial issue, in my view, is the determination of the rate of
surplus value. That is, the real problem is not, as most seem to think, to
argue in favour of Capital volume III: it is to argue in favour of Capital
vol I, after the new approaches rereading of vol. III. I maintain that the
rate of surplus value is surplus labor over necessary labor in (potential
abstract) labor embodied terms, not in labor represented terms. On this, I
find Ajit's argument closer to mine than the new approaches. Of course, I
don't think it is possible to speak of value without money. But there must
be some reason why I entered the '90s very critic of Sraffians, and of the
Meek-Dobb-Sweezy interpretations; and now, after the flood of new
interpretations, I find them refreshingly rigorous. I suggest to you that
something has been lost in the recent revival of value theory, and that it
is not clear that the gains (and there are gains) are higher than the
losses, relative to the Received Opinion in the '60s and '70s.

In any case, for those who have Duncan's paper at the EEA 97, at pp. 22-23
he refers to recent unpublished work by Brinkman on the relationship
between the dual-system approach and the New Interpretation. The thesis
there is very close to my published views as in RRPE 1989.

(viii) My view is that all is worth and special in Marx's value theory
(including the relationship with money) is in the analysis of the labour
market + the valorization process, before final exchange. When labor is
labor power and livig labor. When we are at the level of dead labor - i.e.,
when the production process is finished - the redundancy argument is sound,
and any attempt to rescue labor value, with or without money, is desperate.

Sure that you will not understand a word.


Riccardo Bellofiore
Department of Economics
Piazza Rosate, 2
I-24129 Bergamo, Italy
e-mail: bellofio@cisi.unito.it
tel: (39) 35 277505 (office)
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