From: Rakesh Bhandari (bhandari@BERKELEY.EDU)
Date: Fri Jun 29 2007 - 19:06:38 EDT
> Hi Rakesh > >> This kind of accounting probably represents the strongest common sensical >> rejection of the labor theory of value. Not labor but ideas, genius and creativity add value. Against materialism for idealism, etc. > > In my mind, "ideas", "genius" and "creativity" are buzz-words for kinds of concrete labour. So the main issue these facts highlight is that variable capital represents that part of the material process of production that is precisely "variable" in terms of the value it adds. Or do you think there is a deeper issue here? > > Best wishes, > -Ian. > Value created (as monetarily expressed) by these kinds of concrete mental labor (product design) does not seem to be proportional to (objective) abstract labor time or (subjective) toil and trouble expended. That is what the accounting relayed by Varian seems to indicate, that the labor theory of value had some relative validity for nineteenth century industrial economies but is now a materialist superstition. How would Marxists speak to this common sense objection to the labor theory of value? Or how would a Marxist speak to a company like Altera which makes programmable chips, spending as I discovered in an informal interview some $400 million dollars a year on R and D on algorithms and making profit of 28 cents on every dollar (almost 3x the corporate average)? The costs and difficulty of concentrating the complex mental labor required seems to have created a barrier to entry (the few companies in the business are all located in Silicon Valley and no where else, Stanford and UC Berkeley played an important role in the creation of this product which also creates questions about academic and business relations). Perhaps because the market for this kind of chip used primarily I think in testing is small and not growing rapidly--only about 2 billion a year compared to the memory chip market which I would get is many tens of times as large--venture capital does not seem to be financing competitors, yet the value added in the programmable chip business does not seem explicable in terms of a labor theory of value. The value added by creative design and complex mathematical work does not seem explicable in terms of the expenditure of abstract, homogeneous labor. Rakesh
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