Re: [OPE-L] questions on the interpretation of labour values

From: Diego Guerrero (diego.guerrero@CPS.UCM.ES)
Date: Sun Feb 25 2007 - 11:46:44 EST

 Hi Diego

> The formula is the same in both cases: wH = l + mH·A. That is values are
> the
> sum of direct labour (l) plus the value of the inputs (measured by the
> labour-equivalent of market prices). Note that this is not a contradiction
> but represents Marx's idea that in the analysis of the process of value
> formation what matters is the duration, the intensity and other aspects of
> the process of spending living labour whereas the value of the inputs is a
> secondary issue so that they can be taken as given (data). This is why I
> quoted Marx's about the "retorts and other vessels" being necessary to a
> chemical process, BUT DISTINCT FROM IT, which is what really matters.

How do you compute the MELT?



In the paper I say I compute it (it is not exactly the MELT but the ‘the
average social productivity of labour’, π) in this way:

“As for the exact quantification of π, and having into account that total
output holds invariable through both transformations (see below):

 (9)       wx = px = mx,

we reach the result that π can be defined either in gross terms (what we
call π1):

 (10)     π1 = mx/lx

= px/lx

= wx/lx

or alternatively in net terms (π2):

 (11)     π2 = m·(I-A)x / lx

= p·(I-A)x / lx

= w·(I-A)x / lx”

And in a note I add: “Of course, the magnitude of π1 is not the same as π2,
but the fact that they are respectively, let us say, 30 euro or 60 euro per
hour of labour does not make any difference as regards the problem involved.
So we will simply speak of π from now on.”


You stated that your formula for values in the case of equilibrium
prices of production is:

> pH = mH·(A+B)·(1+r)

Looking briefly at your paper it seems that B is the workers
consumption matrix. If so your formula above is mathematically the
*same* formula that I derive in my paper

v = vA*(1+r)

where v are (nonstandard) labour values, A* is the technique augmented
by workers consumption and r is the *labour value* rate of profit.

I agree that this (nonstandard) formula is the correct definition of
labour values in the context of capitalist production, in contrast to
the standard definition. Once the correct definition is adopted then
all Marx's aggregate equalities obtain, and other important paradoxes
of the labour theory of value get resolved too.



I agree that our papers have quite a lot of points in common, but yours is
even longer than mine, so I need some time to investigate its details. I’ll
let you know then.



But I do not agree that these nonstandard labour values must be
computed from market prices. I prove they are independent of the price
system (although of course in dynamic contexts there are causal
relations between the dual accounting systems).



But note that the mH are neither more nor less dependent on market prices
than the pH or the wH are. When you write that “A* is the technique
augmented by workers consumption” you are probably thinking that A* is a
physical matrix and as such independent from other variables. But A* depends
on both labour and prices. On the one hand the magnitude of each coefficient
depends on the duration, intensity, etc., of the labour process. On the
other hand market prices clearly co-determine A and A*: if the price of gold
were lower than the prices of aluminium and steel, the cars would probably
be built in gold. Leontief was aware of this. And if you put aside the
physical matrices and look directly at labour, how do you measure the labour
“included” in the means of production? You need to turn to A again, but A
depends on market prices.



I have briefly skimmed your paper. I should read it more carefully
before saying more. But it seems that our view on this specific issue
is close. :)




I’ll do the same and am happy that our views are close.

I thank you too. Cheers,


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