(OPE-L) Re: Dynamic value and natural price

From: Philip Dunn (pscumnud@DIRCON.CO.UK)
Date: Mon Nov 10 2003 - 14:04:45 EST

Quoting Paul Cockshott <wpc@DCS.GLA.AC.UK>:

>   Phil:
> Suppose nominal value added totals 2 million dollars.  Then the
> _absolute_ value of money  is 0.5 hours per dollar.
> To get from a nominal price to a price measured in hours just
> multiply by the absolute value of money.
> For simplicity I will assume that the real and the absolute values of
> money are constant in time.
> Marx's 'value of labour-power' is gone.  Instead there is
> labour-power value.  The actual, recognised labour-power value of a
> clock hour of labour-power is equal to the real wage paid for it.
> The value creating power of labour-power is identically this real
> labour-power value.   Also there is a potential-for-recognition for
> this actual labour-power value. This is the natural real wage.
> ------------------------------------
> Paul:
> I don't quite follow this.
> You seem to have gone from a distinction between labour and labour
> power to a distinction between absolute and real values of money.
> How is this an advantage?
> ----------------------------------


Hi Paul

"The value of labour-power is determined, as in the case of every other
commodity, by the labour-time necessary for the production, and consequently
also the reproduction, of this special article. So far as it has value, it
represents no more than a definite quantity of the average labour of society
incorporated in it. Labour-power exists only as a capacity, or power of the
living individual. Its production consequently pre-supposes his existence.
Given the individual, the production of labour-power consists in his
reproduction of himself or his maintenance. For his maintenance he requires a
given quantity of the means of subsistence. Therefore the labour-time requisite
for the production of labour-power reduces itself to that necessary for the
production of those means of subsistence; in other words, the value of
labour-power is the value of the means of subsistence necessary for the
maintenance of the labourer." [CI ch 6]

If Marx's labour incorporated theory of the value of labour-power is rejected,
new idea is needed of what the intrinsic value of the producer commodity is.
The recognised value of the produced commodity is identical to its embodied
labour and equal to the absolute value of the money it sells for.  In analogy,
the recognised value of the producer commodity is identical to its labour-power
and equal to the real value of the money it costs to buy. This real
labour-power value is quite different from the absolute embodied labour value
of the produced commodity.  They cannot be compared quantitatively.  This means
that the rate of surplus value cannot be formulated as e = s/v.  It can be
expressed only in money as the profit wage ratio.  So e = profits/wages.  It
does not matter whether profits and wages are measured in dollars or absolute
money hours or real money hours. The ratio is the same.

Since the value of the producer commodity is identical to its labour-power, and
its labour power is value-creating power then the value of the producer
commodity is identical to its value-creating power.

> To measure it we need to do a least squares fit to price data:
> minimize with respect to x the square of  (y - Mx)
> where x is a vector of hourly natural real wage rates, y is a vector
> of recognized labor activity, measured by money, expressed in hours.
> In other words y is equal to a vector of firms' absolute value added
> (nominal value added in dollars times the absolute value of money).
> M is a matrix.  The element M(f,t) gives the hours worked in firm f
> by workers of skill type t.  We need to have the number of firms much
> greater than the number of skill types to get a good fit.
> The dimensions of y and M are hours.  x is dimensionless -- wages
> measured in money hours divided by clock hours.
> -------------------------------------------------
> Whatdo you expect these xs to be, >1 or <1?


I would expect them to be dispersed around a mean of 1, but I have not tried
prove that yet.


Philip Dunn

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