[OPE-L:22] [OPE-L:244] Re: Re: Re: Metric Spaces, equivalence relations, and

Allin Cottrell (cottrell@ricardo.ecn.wfu.edu)
Wed, 28 Oct 1998 23:11:18 -0500 (EST)

Sorry for the delay in responding.

On Sun, 25 Oct 1998, Gil wrote:

> My point was that, if this were so, ...

[i.e., if the formal properties of a set of arbitrage-free
exchanges were taken to establish that some substance is present
in equal quantities on each side of the exchange]

> ... the candidate "substance" would have to be something
> common to non-commodities such as unimproved land and mental
> productions like honor, conscience, or (patented) ideas,
> since all of these goods may be subject to exactly the same
> formal properties of exchange identified by Paul...

Granted. The 'formal properties' argument threatens to "prove
too much" from the standpoint of the labour theory of value,
since non-reproducible commodities (or 'exchangeable items' if
one does not want to call them 'commodities') partake equally of
the formal properties of exchange relations, yet their prices
are unrelated to the labour-time (if any) that they embody.

Gil had written:

> Even granting a strong correlation between imputed labor
> values and, let's say, prices of production...

to which I came back:

> No, let's not say prices of production; let's say observed
> market prices.

and he returned:

> Gladly (but even for Nike sports shoes, for example?).

One can't speak of a correlation between two observations (price
and labour content of Nike shoes). So I suppose Gil means to
ask: Do we expect the correlation to hold up even when Nike
sportswear is included in the data-set? Well, yes: "hot"
consumer items are in the upper tail of the statistical
distribution of ratios of market-price to socially required
labour content, is all. The distribution as a whole is fairly
well concentrated, although of course there are outliers.

> [T]he valid sense, if any, in which "the expenditure of
> labour-time required to procure [various products] from the
> materials provided by nature" constitutes "the 'true cost'
> of producing the[m]" has nowhere been established.

Established demonstratively from incontrovertible axioms? Well
then, no. But, Gil, do you (personally) really dispute this? As
I see it, this claim depends on very general facts about the
sort of world we live in. If we were tightly hemmed in by
existing stocks of non-reproducible natural resources in most
branches of production, then the idea that labour-time is the
true cost of producing stuff would not have much attraction.
But we're not, and so it does.

> If something systematic is in fact going on here, it might
> well be that a) as an empirical matter relating to
> competitive conditions, market prices turn out not to
> diverge much from production prices, and b) as an empirical
> matter relating to existing technology, production prices
> turn out not diverge much from calculated labor values.

It's subtler and more interesting than that. You're relying on
the standard ("post-Sraffian") view, that market prices must
inherently be closer to prices of production that to labour
values, and if market prices happen to be close to the latter it
must be "by courtesy" of prices of production, so to speak (e.g.
if organic composition of capital turned out to be rather
narrowly distributed). That's not what Paul Cockshott and I
have found. Actual prices are in a sense (stochastically)
"midway" between prices of production and 'naive' labour values.
profit rates, across sectors, are more uniform that one would
expect on the basis of the simple labour theory of value - yet
they are negatively correlated with organic composition.