[OPE-L] Yet another TP solution

From: Ian Wright (iwright@GMAIL.COM)
Date: Wed Apr 20 2005 - 13:17:35 EDT

Phil asked me to forward this to the list. Our exchange was initially off-list.

Hi Ian

> Phil:
> > Note that command over labour [sc. labour-power] and command over the
> produce
> > of labour [sc. living labour, labour-content??] are the same thing here.
> We
> > are in "that early and rude state of society which preceeds both the
> > accumulation of stock and the appropriation of land".  They diverge later.
> > Ricardo's objection relies on using the first measure.
> Ian:
> In that rude state, it is clear that there is a dynamic relationship
> between labour-embodied and labour-commanded. Out of equilibrium,
> where the allocation of labour to productive activities is unbalanced
> and does not match the composition of demand, labour-embodied and
> labour-commanded measures will diverge for each sector. If there is
> too much (resp. little) labour in one sector, then labour-commanded by
> the produce of that sector is less (resp.more) than the
> labour-embodied in the produce of that sector. Market feedback via the
> circulation of money will synchronise these meaures until labour
> allocation is balanced and labour-embodied equals labour-commanded for
> every commodity. In this hypothetical equilibrium state the two
> measures are identical.

That could well be what Adam Smith was thinking.  What I am doing is ex-post
value accounting.  I throw any old prices in and there are no price value
deviations.  They prices could be market prices, prices of production, prices
equal the the number of letters in the name of the commodity, prices all equal
to $99.99 (a nuclear power station is $99.99, a cup of tea is $99.99 etc.)
the accounting system soaks them all up and expresses then as differences
between value created, as recognised by money prices, and the power to create
value, as recognised by money wages.

This is the drawer I leave open.  All these TP solutions leave one or more
drawers open. DF, for example, has total price <> total value and price rate of
profit <> value rate, while closing the rate of surplus value and value added
drawers. Loranger does the opposite.

In ex post value accounting all these drawers are closed, even down to the
diaggregated level.  I leave open the one that most Marxists would hate to
open, the determination of value by SNLT.

> > Since money is the universal equivalent the relative value of a produced
> > commodity, its intrinsic embodied labour value, is precisely equal to the
> value
> > of the sum of money it sells for.  Smith was right.  "The exchangeable
> value of
> > every thing must always be precisely equal to the extent of this power
> which
> > it conveys to its owner."
> Ian:
> Given the above dynamic relation between
> labour-embodied/labour-commanded in the rude state without capital and
> land, does this affect your conclusions for economies with capital and
> land?

I was always talking about the latter state.


Philip Dunn

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