From: glevy@PRATT.EDU
Date: Mon Jul 12 2004 - 11:57:34 EDT
---------------------------- Original Message ---------------------------- Subject: measurement of abstract labor - correction From: "Jurriaan Bendien" <andromeda246@hetnet.nl> Date: Mon, July 12, 2004 5:36 am -------------------------------------------------------------------------- I wrote: "In Marx's theory, utilising the concept of surplus-value (practically speaking, the net income yield on value added regardless of any particular economic source), that is of course perfectly explicable,..." That should of course really be: "In Marx's theory, utilising the concept of surplus-value (practically speaking, the net income yield to the owners of productive capital assets on the value-added, regardless of any particular economic source), that is of course perfectly explicable,..." The essential difference between Marx and conventional economics as regards value-creation is that for Marx only human labor creates new (economic) value, whereas according to the ""factors of production" theory, land, labor and capital are all sources of new (economic) value. The concept of "value-added" (sales less costs), which is central to the product account in social accounting, is very clearly based on a value theory, and it is this value theory which causes costs and revenues to be aggregated, grossed and netted within a system of transactors to estimate the new wealth produced. However, when workers go on strike or are absent, such that no more value is added and capital assets deteriorate in value, it becomes clear that only human labor conserves and creates new output value. The "factors of production" theory enables a view of production costs which abstracts from the social relations of production in general and ownership relations in particular (except for identifying distinct enterprises in the private and punlic sectors), since property can be an independent source of new net output value, separate from labor. In that case, the only reason for excluding e.g. most "capital gains" in the product account is, because capital gains do not arise from production. If however "capital gains" do not arise from production, they must arise from exchange, and this leads to the view that new net value can be generated through exchange also, rather than being a redistribution of income. But if that is the case, the Keynesian income-product identity cannot be true, i.e. it cannot be true that total incomes received are equal to the total value of output produced. In the US, capital gains for tax purposes only are measured by the Internal Revenue Department of the federal government. In 2001, net capital gains were $326.4 billion, compared to $432 billion in 1998 and $355 billion in 1997. That is equal to about 3-4% of GDP, i.e. a value equal to or exceeding the value of the increase in real GDP. Jurriaan
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