[OPE-L:6360] FW: [MIKE W] Re: Historical, real and current costs

andrew kliman (Andrew_Kliman@CLASSIC.MSN.COM)
Fri, 27 Mar 98 15:58:22 UT

Sent: Thursday, March 26, 1998 12:59 PM
To: ope-l@galaxy.csuchico.edu
Subject: RE: [OPE-L] [MIKE W] Re: Historical, real and current costs
Importance: High

A reply to the PIAF:

From: owner-ope-l@galaxy.csuchico.edu on behalf of Gerald Levy
Sent: Tuesday, March 24, 1998 9:50 PM
To: ope-l@galaxy.csuchico.edu
Cc: multiple recipients of list
Subject: [OPE-L] [MIKE W] Re: Historical, real and current costs

Michael wrote: "But Andrew, you have to date not said anything about this
specific issue."

This is true. What impressed me, and what I was commenting on, was Chris'
discussion of methodology.

Michael: "My reference to averaging, at any rate, was not merely to the
empircial, but to the real. Specifically that the MELT in reality is a macro
concept, that can be determined only in terms of the average intensity of
labour (which was my gloss on Andrew's reference to Marx's distinction between
the period of work and the period of production)."

Right. And I have already noted that the MELT is also a macro concept in my
example. Moreover, I have noted, as has Alejandro Ramos, that it is possible
to doll-up the example with "n" sectors so that it gives the superficial
appearance of being "even more" macro -- but nothing is really different, so
why bother?

I'm afraid I still do not understand Michael's proposal concerning the average
intensity of labor. I don't understand how it resolves the problem I've
posed, and I don't understand how it yields conclusions different from those
I've suggested. As I've noted, I think that the labor contained in the 100
chunches finished at 9 pm is 100 hours. I think proponents of the
simultaneist MELT would agree with that. It is by no means clear to me that
Michael's averaging proposal would yield a different result.

Michael: "As the MELT is a macro concept, I think the insights one can gain
about it from a one-good 'model' will be slight."

Perhaps, but perhaps not. In any case, the chunche example is constructed to
yield ONE insight only: the MELT pertaining to capital and to output must be
allowed to differ in order not to violate Marx's theoretical conclusions
concerning the origin of profit. I think the example succeeds famously in
doing this.

Michael: "There is an alternative to conceptualisng this, implausibly[,] as
workers exploiting capitalists. Those commodities that are 'caught' by such a
price drop will (actually, may) simply fail to be successful commodities. If
this is not a transient change, then the MELT will adjust, and such failing
capitals will either have to adjust or go under."

Well, I think we may have different definitions of the MELT -- i.e., we may
not even be talking about the same thing. I think that, in both the
simultaneist and the temporalist conceptions of the MELT, its magnitude is
affected by even transient changes.

Leaving aside whether the concept of "successful commodities" is consonant
with Marx's theory, I do not think Michael's alternative is adequate to a
GENERAL conceptualization of the money/labor-time relation. For instance, I
don't think it can deal adequately with the opposite case, in which the price
level *rises* between the time when workers spend their wages and the time
when the output is finished.

To me, this is self-evident even without any numbers, but I shall provide some
numbers for the benefit of those to whom this may not be self-evident. We
have the same basic set-up as in the earlier widget example. However, the
numbers are different. The workers expend 100 labor-hours thru 5 pm, and
receive $100 in wages, which they spend on widgets before 9 pm. The widgets
are dry at 9 pm. The price per widget is $1 until 9 pm., but $2 from 9 pm
until midnight, the period during which the widgets are sold. The technique
of widget production has always been the same, so one labor-hour is required
to produce each widget that the workers bought and consumed before 9 pm, and
one labor-hour is obviously required to produce each of the widgets finished
at 9 pm.

Now, it is clear that the $100 wages allowed the workers to consume 100
widgets, the equivalent of 100 labor-hours. They did 100 labor-hours of work.
Temporalists will therefore conclude that surplus-labor is zero. (The
physical surplus of widgets is also 0 -- 100 consumed by workers, 100
produced.) There is "profit" of $100 (sales revenue of $2/widget times 100
widgets, minus wages of $100), but this is only *nominal* profit, resulting
from the inflation in the monetary expression of value. *Real* profit is 0.

As I have heretofore understood the simultaneist MELT, however, its proponents
would argue that the MELT *throughout* the day is $200/(100 hrs.) = $2/hr.
Hence, the wages of $100 represent 50 labor-hours, and surplus-labor is 50
hrs., corresponding to the $100 in "profit." However, the magnitude of
surplus-labor is here influenced by the price level. Had it remained
constant, the capitalists would supposedly not have exploited the workers,
but, due only to the rise in the price level, the workers have suddenly become

It does not seem to me that Michael's "unsuccessful commodity" answer can say
anything about this case. All the commodities are "successful" when they sell
for $1 each, and when they sell for $2 each. If not, then I would ask Michael
to further clarify his proposal.

I had written:

> 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
> 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.

Michael replies: "I have yet to see any reason to belief that these are
anything but random imperfections."

So what? Again, I think that, in both the simultaneist and the temporalist
conceptions of the MELT, its magnitude is affected by even transient changes.
Conceptual rigor requires that concepts deal with *all* cases they are
supposed to cover, not only typical ones.

Andrew Kliman