# [OPE-L:2294] Re: Re: : value-form theories

From: Fred B. Moseley (fmoseley@mtholyoke.edu)
Date: Tue Jan 25 2000 - 11:34:33 EST

Hi Michael,

Thank you very much for your response in (2280), which I found helpful and
clarifying. I am very glad to learn that VF theory does not in fact
object to unobservable entities in economic theory. I only persisted in
glad that we agree on this general point.

My "core" objection to VF theory remains, as I have expressed in previous
posts, that it does not provide a quantitative theory of prices (or value
added) and profit. In a recent post, Geert argued that value-form theory
does indeed present a quantitative theory of value added, which is
represented by the same kind of equation as in my interpretation of Marx's
theory:

(1) Y = m L

As I have argued, this one equation has three variables. Therefore, if
this equation is to express a meaningful theory of value added, then the
other two variables, L and m, must somehow be determined outside this
equation, and taken as given in this equation. Otherwise, the equation
would be a tautology (true by definition) or indeterminant (too many
unknowns with one equation) or (as Riccardo put it) an "accounting
identity."

Michael has replied briefly in (2280) that the causal relation between
labor and value added is not one-way, but rather "TWO-WAY".
L depends on Y, as well as Y on L.

But, Michael, this is not possible with only one equation. If this
equation is to determine the magnitude of Y, then L must be determined
outside this equation, and taken as given in this equation. If the causal
relation were indeed "two way", then one would need a second equation to
express the dependence of L on Y. And this second equation cannot be
equation (1), turned around, i.e.:

(2) L = Y / m

This is a tautology or an accounting identity. In order to determine both
Y and L, the second equation must be linearly independent of equation (1).

I don't think this fundamental law of mathematical logic is somehow
overruled by systematic dialectics. Am I wrong?

I look forward very much to further discussion.