[OPE-L:4957] Re: determination of real wages

riccardo bellofiore (bellofio@cisi.unito.it)
Fri, 9 May 1997 00:17:02 -0700 (PDT)

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At 11:17 5-05-1997, aramos@aramos.bo wrote:
>On Riccardo's ope-l 4914:
>Thank you very much for your thoughtful response. Just now my time
>is very limited, so let me comment only some points.

Alejandro, when you're time is limited,you're able to write very long and
thougtful letters! On my side, I am also truly in troubles finishing a
paper, so I do not answer now (and BTW my server is going up and down: this
explays in the delay in my answer to your previous post). BUT I want to
make some (very general) comments.

Only four things now. I am not talking in my letters of you in particular.
My point was simply that those who (RIGHTLY) as you stress the unity of
production and circulation, though not value-form theorists, seems to me
not to care enough of the strong points of the value form approach in
(when) leaving Marx's analysis of the substance of value. That is, my point
is that the value-form theorists seem to be more coherent than the ones who
hold at the unity of production and circulation and says that this does not
creates problems in Marx. These problems are for me already in Marx, and
what is needed is NEW theoretical work ALONG HIS lines, BUT overcoming his

[My idea - but that is not what is truly important now, is that the
unity of production and circulation is THEORETICALLY costructed by Marx;
than in this construction exchange ratios as EXCHANGE-VALUES are essential;
that indeed the class relationship between working class and capital is in
a very important sense quite adequately captured in terms of exchange value
IF Marx's view of the cycle of money-capital is reframed, as it should be,
in the terms of the theory of the monetary circuit. This permits to say in
a meningful sense that exploitation may be measured as (potential) surplus
value BEFORE exchange, that is before the unity of production and
circulation. If one starts from this latter, what he get is a
transformation of prices into values, not viceversa.]

About you: Alejandro, I feel a lot near to you, and I fully agree with your
suggestion that I must study your papers more. Exactly because they are
relevant, and there are a lot of "nuances", I embarked in a *slow* work of
re-reading of the literature [slow because I must do a lot of teaching, and
hence of writing, NOT on these topics, unfortunately], and I'll surely come
to you better than I can do now. IF you are interested in discussing BEFORE
I'll finished this journey of mine, well, let's go on. Otherwise, see you
later - hope in a year. But exacltly because I fel near to you, I feel free
to share with you some of my troublings. Note that I do not take the list
as a place where only things on which one is sure are put forward.

Third: my policy is that the Marxian labour theory of value must be
essential in some sense (and you know that that sense is not for me only to
be a theory of relative prices!) even in stationary situations, etc. So
when you say: well, but that's result follow only because, etc., this is
something I don't follow. Let me make a comparison. Most keynesians were
happy to find a place for money outside full employment equilibrium. No,
money must be essential first of all in equilibrium. Abstract labour theory
of value, then, must be essential even in a situation which may be
described as a stationary equilibrium.

Last point: your answer - inaccurate scholarship - I don't like at all. No,
I think the method we should follow is the one used by Dumenil in his
1983-1984 paper in Science and Society. Give a look at it, if you have one



>> Alejandro finds my last post "cryptic". I apologize for that, though I fear
>> that he will not be relieved by this one.
>No, you are wrong. Your post is very clear and illuminating for me.
>> (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.
>I am not a "proponent of the value-form approach". I share your (and
>Ajit S., Paul C., Allin C.) concern about "abandoning the notion of
>labor as substance of value". I disagree with this. We have to
>explain how in Marx's theory labor-time determines value. I disagree
>with visions in which "everything determines everything".
>> (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.
>Your understanding of the MEL is limited to very simple and abstract
>situations. Insofar as you take into account complex situations this
>interpretation (MEL given or ex post variable) is invalid.
>If you read my post on a passage of Marginal Notes on Wagner (ope-l
>4258) you will see that according to Marx an usual situation (like a
>"bad harvest") implies an "endogenous change" in the relation between
>labor-time and its external expression, money.
>> The Marxian sequence value-rate of profit - prices is lost.
>Are you refering to **Tugan sequence** value-rate of profit -
>prices? Dealing with the "transformation problem" Tugan considers a
>**stationary situation** in which, actually, there is no difference
>between the labor-value rate of profit and the money-value rate of
>profit. He misunderstood this point. From this he erroneously deduced
>that also in **non stationay situations** there is no difference
>between both rates.
>If you read my paper for the last IWGVT Conference you will see that
>there is a quantitative difference between both the labor-value rate
>of profit and the money-value rate of profit when you take into
>account technical change, in particular a labor-saving innovation. In
>that case you will also see that labor-values are different from the
>traditional "lambdas".
>> 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.
>Instead of paying attention to the 1.000.000 quotes where the value
>of money is given, I ask you again to see the passage of Marginal
>Notes on Wagner. Under "complex situations" the value of money
>> (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 matter is not "to speak" about money in one or another phrase.
>The matter is that money in capitalist economy is the "necessary form
>of value". Surplus labor must be realised as surplus value and
>necessary labor actually appears as the amount of money paid to
>workers. This is a crucial point in Marx's theory (and in reality!!)
>I find very interesting the passage of Vol I, Ch. 9 when Marx gives
>some examples about the calculation of the rate of surplus value
>(Penguin, pp 327-9). After a complex example IN MONEY TERMS he says:
>"There remains $132 as the weekly value created, which = $52 variable
>+ $90 surplus. The rate of surplus value is therefore 80/52 = 153.85
>per cent. In a working day of 10 hours with average labor the result
>is: necesary labor = 3.9 hours and surplus labor = 6.1 hours" (p. 328)
>In this example we see that money magnitudes are the necessary
>represention of labor-time, not something absolutely separated from
>it. Moreover, the way Marx uses to calculate the rate of surplus
>value, starts from money magnitudes. Does this calculation mean that
>labor-time doesnt determine value? I dont think so. Simply in this
>example we cannot "see" this process of determination.
>> 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.
>I dont think the role of money "must shift" from one to another
>situation. You are simple speaking of "credit money" which of course
>is a very important phenomena to be taken into account. But I dont
>think that, for this, we have to REDUCE money to credit money.
>> 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.
>For whom is not possible to "speak in terms of the immanent measure
>of value (labor)"?
>> (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 otherss
>> readings of Sraffa). BTW, Sraffas own model, with few amendments, is
>> *compatible* with the "postulate" in the New Solution, and with the "value
>> of money" notion, etc.
>I think you are collapsing a bunch of interpretations in the so-
>called New Solution. It seems to me that you are missing a lot of
>"nuances" of the recent work on Marx's theory of value.
>> (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.
>Im not sure to understand this. In "the first chapters" we have a
>theory of price determination. Moreover, we have "relative prices"
>(remember Ajit's question about "relative prices"!), i.e. we have
>"exchange values". The problem is Marx's theory is not only a theory
>of relative prices. Value has a substance, abstract labor, etc.
>> 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).
>This is a very interesting question. I think much of the explanation
>lies in the poverty of Marxian scholarship. Let us take a classical
>example: The so called "transformation problem". The whole "framework"
>is based in a single reading:
> In Vol III, Ch.9 there are 2 tables. In the first Marx determines
> "values" and in the other "prices". There is no connection
> between both "systems" and Marx attempt to establish a coherent
> conection is a failure.
>This reading was imposed by Bort and no one cared about if this is
>true or not, i.e. if it really corresponds to Marx's text. So, Sweezy
>repeated Bort., Seton repeated Sweezy, Samuelson repeated Seton,
>Steedamn repeated Samuelson (brief genealogy). But if you see the
>two tables in the original (Penguin p. 256) you have that in the so-
>called "price system" there is a column SUPRESSED by Bort. in his own
>version of this. This column contains VALUES. So there is no a "price
>system" separated from "values" as Bort wants. This is simply a
>misreading or, if you want, an **intentional** deformation of Marx's
>text to fit it into a particular interpretation.
>Moreover, in the same chapter you have another example in which
>there are NOT 2 tables but only one (p. 264). What does this mean?
>As "textual evidence" it has the same weight that the "2 tables"
>version but no one "sees" it. Moreover, from the 5 Marx's versions of
>the transformation, 3 are a single-system version. But there are no
>people asking what is the meaning of this. That is a very poor
>knowdledge and understanding of Marx own work. An on this poor
>scholar work are based the current "orthodox" interpretations we have.
>Some time ago Ajit recalls Sraffa's incredible seriousness in his
>edition of Ricardo (the "faded comma"). Well, this kind of
>scholarship has not been applied to Marx. Unfortunately we dont have
>"an Sraffa" asking things like this: What is the meaning of Marx's
>single table examples of the transformation? Why does Bortkiewicz
>suppressed a column in the "price table"? Is that correct?
>> And please, dont take in politics.
>What do you mean?
>> (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.
>I looked there many times, Riccardo. As I told you I am not in
>the "value-form analysis", as you are describing it. You are simply
>confused about this perhaps because you havent read my articles. I
>repeat: I dont think we can abandon the notion of labor-time as the
>substance of value. If you want a "proof" of this, please, read my
>article for the Conference. Why do you think Im defending what you
>call the "value form analysis"?
>Perhaps the differences come from the fact that we have involved in
>the issues in a diverse ways. For example: You have had the
>opportunity to study a lot on credit money. Same thing regarding
>Ajit. He is an oustanding scholar on Sraffa's theory and, obviously,
>he discusses from his knowdledge on this. But all this doesnt
>necessarly imply that our general concernings are different. So,
>there are a lot of mutual "ignorance" of other people's "agendas" (to
>quote David L.!)
>Now, I have no more time to comment you points 7 and 8.
>Saluti compagno!!
>Alejandro R.

Riccardo Bellofiore
Department of Economics
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I-24129 Bergamo, Italy
e-mail: bellofio@cisi.unito.it
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