[OPE-L:6350] RE: Re: Historical, real and current costs

andrew kliman (Andrew_Kliman@CLASSIC.MSN.COM)
Tue, 24 Mar 98 17:06:07 UT

A reply to the PIAF:

From: owner-ope-l@galaxy.csuchico.edu on behalf of C. J. Arthur
Sent: Monday, March 23, 1998 3:59 PM
To: ope-l@galaxy.csuchico.edu
Subject: Re: [OPE-L] Re: Historical, real and current costs

Chris writes: "It is surely wrong to dismiss this problem on the ground that
the cases are unusual; because
we are not interested in an empirical approximation, we are interested in
conceptual clarity - we want to be sure exactly what theory we are defending.
Where conceptual clarity is concerned we must actively seek out marginal cases
just to secure this. For example it is typical in philsophy to invent 'desert
island cases'; .... This case is decisive for deciding whether the obligation
is absolute or conditional on people being upset.

"In our case we have to be clear whether we are defending the proposition that
value is created in production or whether we are defending the proposition
that value is created by labour. Even if empirically it was always the case
that production time equalled labour time it would be our duty to invent a
case where they were different just in order to clarify this."

Yes! I couldn't have said it better. In fact, I couldn't have said it even
half as well. I'm very glad Chris could, and did.

BTW, Keynes and Sraffa were among those who maintain that economic concepts
must be rigorously precise, even if good empirical approximations could be
obtained through imprecise concepts. I agree with this, and therefore reject
notions that the discrepancy between the timing of wages and the timing of
output and sale can be ignored because, empirically, it is (supposedly)
resolved through averaging. Whatever may happen empirically, is it not
theoretically *necessary* that this be so.

Chris: "May I point out to Andrew and others engaged in this debate that from
a marxist point of view it is absolutely impermissable to consider one product

I think there is more than one "marxist point of view." That's been the case
historically, and I hope it remains the case.

As for what is permissible to consider, I think a lot depends on what one
means by "consider." Chris defends the above by arguing that

"Value is constituted as an abstraction from use value and this itself occurs
in practice only in exchange where heterogeneous good are identified with each
other. Comodities have value 'in themselves' only by reflection into them of
the value form whether this is understood as the commodity form, the money
form or the capital form."

I agree with this, of course. It would be absurd to hold that value could
*exist* in a one-good world. (I also think the notion of a one-good world is
pretty absurd itself.) I also think it is invalid to derive conclusions from
the premise of a one-good world and then argue that they apply to a multi-good
world. I think it is valid, however, to argue that the conclusions apply to a
multi-good world, when they have been derived from an example that postulates
a one-good world, if the conclusions do not depend on that premise.

I think my widget/chunche example is of this latter type. It concerns the
implications, for Marx's theory of profit, of different conceptions of the
money/labor-time relation (the monetary expression of labor-time, or MELT). I
think that, if one holds that the magnitude of the MELT that pertains to
constant and variable capital must be the same as the magnitude of the MELT
that pertains to the product, one implies that workers can exploit the
capitalists simply because the price level drops.

Thus, the purpose of the widget/chunche example is to provide material for
calculation of the MELT under conditions in which the price level drops
between the time that workers receive and spend their wages, and the time that
the product is completed and sold. It was to "motivate" the possible gap in
time between these events, which alone allows for a drop in the price level
between them, that I specified the gap in time between the end of working time
and the end of production time.

Now, as Alejandro Ramos has noted, we could doll-up the example with "n"
sectors, a money commodity (or paper money), constant capital, etc. It would
still be possible for the example to exemplify what the present example
exemplifies, namely, differences between the timing of wage payments and
workers consumption, on the one hand, and the timing of the completion and
sale of the products on the other.

For instance, it is self-evident that, in all "n" sectors, working time could
end at 5 pm and the production time end only at 9 pm. We'd just have the same
issue in a more cumbersome form. Hence, no conclusions concerning the MELT or
its relation to Marx's theory of profit depend on the one-sector premise, even
when the problem is *illustrated* by means of that premise.

Moreover, what we'd have in an n-sector example is a bunch of "rugs" under
which the problem at hand could be swept. My example prevents that, by
removing the rugs. I hoped that the example would thereby bring the problem
at hand into sharp focus, and show that it does need to be confronted
directly. I still hope it will, i.e., that proponents of the simultaneist
MELT, to whom the example was addressed, will reply when they have time.

So, in order to avoid the cumbersomeness of n-sector examples, and to remove
the n-1 rugs they provide, what is wrong with considering the timing issue,
and its implications for the MELT, in the context of a one-good economy?

Andrew Kliman