Quantifying Values: response to Paul

Alan Freeman (a.freeman@greenwich.ac.uk)
Sat, 17 Jan 1998 15:14:43 +0000

Paul Cockshott wrote (4 Jan):

> You say that the services
> are ultimately paid for in money from the income of one class or another.
> This is not quite true. If we compare the share of national income taken
> up by healthcare, we find that in the UK it is lower than in many other
> leading capitalist countries using existing accounting procedures. But
> what conclusion are we to draw from this?

> Is the provision of health services to the population less by the extent
> of the discrepancy, or is it, as proponents of the NHS say, because socialised
> medicine is more economically efficient than capitalist medicine?

I do think socialised medicine, like socialised pensions and all socialised
services are 'more economically efficient' but in a quite precise sense: I
think they provide more for the workers. A private health service has
to transfer a portion of the value of its product to someone who does not
consume it, namely the shareholders. The same is true of a private pension
though the mechanism is more obscure (what happens is that they invest in
financial assets and therefore contribute to the faux frais of running
the financial system, instead of taking their income directly from taxes)

If health isn't paid out of the income of one class or another, out of
what is it paid? The value product of society reduces to c+v+s and it
has to come out of one of them. Of course, it might do so *indirectly*.
But it has to be paid from somewhere, that is, the materials and the
labour of the health services consume a definite portion of the annual
value product of society. An alternative would be to say that actually
this value product is not equal to c+ v + s but to something like

c + u + v + s,

where u is an extra component of value. But I'm not convinced this is

> If were to have compared a UK private and a UK NHS hospital in 1980
> each employing 1000 people ( I chose a date before the Tory reforms
> introduced an element of contracting out of services ), the national
> income accounts would measure the contribution to national income
> or the private hospital as wages + profits whereas that of the NHS hospital
> would just be wages. If we were to compare the money values created
> the private hospital ( assuming that it paid similar wage rates ) would
> apparently contribute more to national income.

True, though missing from the accounts is the constant capital consumed by
the health service and that mustn't be forgotten because that has to come
from somewhere. What society pays for is the *gross* output of the health
provider. In the private case, it functions just like any other commodity
producer and its C comes out of the annual output of department I, its V
comes out of the annual output of department IIa and its S 'comes out of'
the output of department IIb. I put 'comes out of' in quotes because what
actually happens is that they pay it to the shareholders who consume it
as incontinent living. Then the NIPA accounts claim this is a funny sort
of cost, as if it was an essential requirement of running the health
service to pay for the excesses of the self-indulgent classes.
Joint production of health and illness, perhaps. Is the net product

> Let us assume for now that the intensity and efficiency of labour in
> the two hospitals was the same, for 1000 person-years of labour the
> NHS hospital contributed say 7 Million pounds whereas the private
> hospital contributed say 10 Million pounds. The difference of 3 Million
> would be profit plus consultancy fees for the private doctors.

> Thus where communist production relations prevale in healthcare,
> the money cost to the rest of society is only the necessary labour
> time expended in healthcare. The surplus labour expended is appropriated
> by society as a whole in kind without getting a monetary representation.
> To the extent therefore to which the socialised sector of the economy
> grows (shrinks) with time, the monetary categories used for measuring
> it become less (more) accurate as a means of measuring the cost to
> society in terms of social labour expended.

This is true, but it is only the same as the fact that in general, society
must sustain a class of people who merely consume and do not produce. If,
therefore, the profit were used not for unproductive consumption but for
the expansion of capital, this would be no less efficient that what you
designate 'communism'. The difficulty is to trace through the payments that
are made by the privatised institutions to their final destination. This is
made particularly hard by NIPA because they on the whole do not tell us who
consumes what. We therefore do not easily know how much of the surplus
value is frittered away and how much is re-invested. This is a consequence
of the general cultural and social values in the given society at a given
time. Very puritanical stages or conditions of development lead to most
being spent on investment.

What remains true under all circumstances is that privatisation places
the decisions as to what should happen to this money outside of the
sphere of politics, of public life in general, and places it under
the dominion of capital of self-expanding value. It is therefore
fundamentally undemocratic, because society is unable to *decide* whether
this surplus value should be spent on investment or consumption, nor
whether it should be spent by a small minority or for the needy.
> Ultimately therefore, when looking at mixed economies, and even more
> when looking at primarily socialist economies, we should try to
> measure the national income in terms of national labour budgets.
> By using the actual labour time expended we can
> escape from distortions of using monetary measures. The alternative
> would be to impute profits to the NHS and education sectors. But how
> would one arrive at these imputed profits?

I agree with this also: but the problem is that we don't agree on how
to do this. My proposal is to go as far as is possible using purely
monetary measures, which also provides a firm foundation for each of
us to calculate labour values in our different ways, and to compare
the differences.