[OPE-L:2007] Re: Re: A possible paradox in the theory of value

From: Paul Cockshott (clyder@gn.apc.org)
Date: Sun Jan 02 2000 - 15:23:56 EST

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At 08:37 02/01/00 +1100, ope-l@galaxy.csuchico.edu wrote:
>I think you're double-counting the 500K hours for the production of the
>means of subsistence of the operators. If I'm paid a wage of $1,000, and
>then spend it all on commodities, then it counts just as $1,000.

>However you've got a point on the skilled labor input, and I believe this
>is a paradox for the standard interpretation.

My point is that with respect to the reproduction of labour power the
two are the same. So the paradox remains.

Harvey flagged this in 1985
>ROPE paper. If you'll forgive me quoting extensively from my notes on the
>paper (I'll also note at the outset that Harvey wrongly attributed what he
>calls the "cost of production" approach to the value of skilled labor to
>Hilferding; as I commented in my 1995 JHET paper, Hilferding in fact used
>Marx's use-value/exchange-value dialectic to argue that the value-creating
>power of skilled labor was totally independent of its cost of production.
>But Harvey's characterisation was an accurate description of how most
>Marxists, and especially Sweezy, Meek and Dobb, approached the subject):
>He focuses solely on the omission of unpaid labour from Marx's accounting
>of the value of skilled labour, rather than any divergence between exchange
>value and use-value. For example, when discussing the value of
>labour-power, he says that if a worker needs 2,000 hours of labour-time to
>be produced, with that time divided equally between paid and unpaid (e.g.,
>commodities versus household labour), then the true labour-value of the
>labour-power is 2,000 hours, whereas Marx's system puts it at only 1,000
>hours. He continues the argument with
>"let us suppose that it takes an *additional* 2000 hours of simple labour
>spent on and by a worker for that worker to acquire a special skill. Let us
>further assume that this labour, too, is evenly divided between that
>provided `free' by the worker him or herself, and that embodied in the
>purchase of goods and services constituting the `costs' or `expenses' of
>special training.
>According to a genuine labour theory of the value of labour-power, the
>lifetime value of this type of skilled
>labour-power would be equal the value equivalent of 4000 hours of simple
>labour (the total labour-time required to produce the worker's simple
>labour-power plus the additional labour-time required to produce the
>worker's special skill). According to the cost of production theory which
>Marx actually used, however, the
>value of this type of skilled labour-power is equated to the value
>equivalent of only 2,000 hours of simple labour (the value of the means of
>subsistence required for the production of the worker's simple labour-power
>plus the value of both the means of subsistence consumed by the worker
>during the special training period and the value equivalent of the expenses
>incurred for special educational goods and services)." (p. 86.)
>Harvey is on the right track in what is in fact a critique of the
>Sweezy/Meek approach when he says that "what is involved is essentially the
>same as what is involved in tracing the preservation of value embodied in
>means of production." (p. 87.)
>"Is is really accurate then to say that the Hilferding approach attributes
>an increased value-creating capacity to skilled labour? I think not. It
>would be more correct to say that it attributes a value-preserving capacity
>to skilled labour such as means of production possess." (p. 87)
>He sums up with three points: "the procedure does not really attribute any
>extra value-creating capacity to skill. It merely assigns to skill a
>value-preserving capacity such as means of production possess. Second, any
>extra surplus value which the Hilferding approach credits to an exercise of
>skill is actually the product of `unpaid' labour which has been embodied in
>the skill. Third, the variability in the rate of surplus value across skill
>levels which is a corollary of the Hilferding approach is a necessary
>product of the way in which the Hilferding approach interacts with Marx's
>theory of the value of labour-power. The Hilferding approach equates the
>extra value-creating capacity of skilled labour to the extra labour-time
>required to produce the
>skill, whereas Marx attrributes the extra value of skilled labour-power to
>the additional incurred cost of acquiring the skill. As these two
>quantities bear no determinate relation to one another, neither will the
>rate of surplus value of skilled labo bear any determinate relationship to
>the rate of surplus value of simple labour." (p. 88)
>He restates one paragraph of Hilferding (which does correspond to the
>Sweezy approach), substituting simple labour for skilled labour, to reach
>the conclusion that simple labour simply adds a value equivalent to the
>value of the labour which went into creating it. "Could this proposition be
>accepted as proper in the context of Marxian value theory? I think not.
>Marx himself would obviously have rejected it as contradicting his
>fundamental claim that living labour is capable of producing *more* value
>than could all of the labours required to produce the commodity
>labour-power. If Hilferding's formulation cannot be applied to
>simple labour, though, what justifies its application to skilled labour? If
>a given expenditure of labour spent producing simple labour-power results
>in a value-creating capacity greater than the value equivalent of that
>labour expenditure, then why should the very same expenditure of labour
>spent producing skilled
>labour-power result in a value-creating capacity exactly equal to the value
>equivalent of that labour expenditure?" (p. 89)
>"The Hilferding approach conceives of the extra value-creating capacity of
>skilled labour as entirely
>*dependent* upon the amount of labour required for the production of
>skilled labour-power, while the value-creating capacity of simple labour is
>conceived as entirely *independent* of the amount of labour required to
>produce simple labour-power." (p. 89)
>He develops the theme that this approach contradicts reality. After saying
>that there is no reason to assume that the value-creating capacity of
>labour-power is equivalent to its value, he comments
>"Is not the same thing true of a special skill? Is there any reason to
>suppose that the augmented physical productivity attributable to an
>acquired skill will tend to equal that of the training labour spent
>producing the skill? I can think of none, yet that is what the Hilferding
>approach implicitly assumes. This, I believe, is a fundamental flaw in the
>approach. A skill is an ability which does more than simply store labour.
>It *saves* labour. An accounting procedure which categorically rejects this
>possibility strikes me as simply
>wrong." (p. 90)
>Using Hilferding's actual method (and not the method of Sweezy/Meek/Dobb,
>which Harvey erroneously attributes to Hilferding), the training inputs
>will determine the wage paid to skilled labor, but the additional
>productivity of the skilled laborer--the use-value of the education
>imparted--is independent of the cost of education, and the "value-creating
>power" of education can only be determined ex-post. Skilled labor can
>therefore add much more value than the education cost--which as Hilferding
>points out means that education can be a source of additional surplus
>value. In contrast, as Harvey observes, the Sweezy/Meek characterization of
>education echoes Marx's portrayal of machinery as "unproductive" in that it
>simply preserves value, rather than increasing it (Harvey 1985, p. 87).
>So I believe there is a paradox!
>At 10:33 1999-12-30 GMT, you wrote:
>>I have thought of a possible paradox in value theory.
>>Let us assume
>>1. That the value of a product is the aliquot share of the
>> total social labour time required to reproduce it.
>>2. That labour power requires inputs to reproduce it.
>>3. That the inputs required to reproduce different concrete
>> labours differ.
>>Thus to produce 10,000 hip replacement operations over a year would require
>>the labour time of operating staffs plus the labour time allocated to
>>reproducing these people as surgical teams. The reproduction of the surgical
>>team would include obviously their food and clothing plus the time that
>>society has to allocate to training sufficient nurses and doctors to
>>replace those who retire or leave the profession over the year.
>>Suppose that each operation requires 100hours of direct labour, and
>>that a total national staff of 1000 people work for 1 million hours directly
>>on these operations. They consume goods worth 500K hours, and
>>society has to allocate a further 400K hours to keep up the training
>>levels of the teams. Assume that the materials used up amount to 100K hours.
>>Thus to reproduce 10,000 hip operations per year requires
>>2million hours of labour, and the value of each operation is
>>thus 200hours.
>>The paradox here is that the share of the social labour required
>>to produce the 10,000 hip operations is 2 million hours, whereas the
>>standard method of calculation used by Marx would make it 1.1 million
>>hours ( the million hours of direct labour plus the 100k of indirect
>>labour in the titanium hip joints.)
>>The implication is that if we define the value of a product to be
>>the share of total social labour required to reproduce it, then we
>>have to include the wage as labour time that is passed on in just the
>>same way as marx treats raw material inputs. This is a paradox
>>given the standard interpretation.
>>In this scheme of accounting all direct labour constitutes the surplus
>>value, wages are no longer accounted for as being paid out of current
>>direct labour.
>>In this accounting scheme there is no problem of defining skilled
>>labour multipliers, all direct labour counts as simple labour. One
>>can obviously model it for an economy of n products and m concrete
>>labours by a (n+m) square matrix of technical reproduction coeficeints
>>for both labour and products. There would be the usual L vector of
>>direct labour inputs, but the first (n) elments of the L vector would
>>be null.
>>Can fellow list members see an error in this paradox.
>>Paul Cockshott (clyder@gn.apc.org)
>Dr. Steve Keen
>Senior Lecturer
>Economics & Finance
>University of Western Sydney Macarthur
>Building 11 Room 30,
>Goldsmith Avenue, Campbelltown
>PO Box 555 Campbelltown NSW 2560
>s.keen@uws.edu.au 61 2 4620-3016 Fax 61 2 4626-6683
>Home 02 9558-8018 Mobile 0409 716 088
>Home Page: http://bus.macarthur.uws.edu.au/steve-keen/
>Workshop on Economic Dynamcs: http://bus.macarthur.uws.edu.au/WED
Paul Cockshott (clyder@gn.apc.org)

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