Deep into our discussion concerning the order of determination of commodity values and prices, Paul C. writes in 6444: >The issue of definition is relevant here. > >If you define value to be the average of techniques used by capitalists >then the rate of exploitation would determine value through its influence >on choice of techniques. If on the other hand you say that the >value of a commodity is determined by that combination of the >techniques in current use which would if genrally used minimise >the labour content, then values are independent of prices >since we define value in terms of the labour minmising technique >rather than the mean technique. This is one of the abiguities >implicit in the notion of socially necessary labour time. Ah. It's taken awhile for the lightbulb to click on, but finally it has. I see now that the issue of definition is not only "relevant" to the discussion, as you've mildly put it, but central to it. As your above comment suggests, I've been presuming a notion of "socially necessary labor time" based on the mean of production techniques actually in use at a given time, while you're using a notion based on a hypothetical generalization of an existing technique that minimizes required labor time. I should have picked this up from one of the papers of yours I've downloaded in the past--sorry about that. In any event, my exploration of this notion over the past few days leads me to the following comments and questions. 1) Is your definition really what Marx had in mind? I agree that the passage in which he introduces the term leaves some room for maneuver: "Socially necessary labour-time is the labour-time requred to produce any use-value under the conditions of production normal for a given society and with the average degree of skill and intensity of labour prevalent in that society." [I, 129]. However, it seems more plausible to interpret the phrase "required...under the conditions of production normal for a given society" as *average* or mean conditions rather than "the minimum possible given existing techniques." Furthermore, in subsequent passages in Volumes I and III, Marx explicitly uses "normal" as a synonym for "average." Examples: "If under normal, *i.e. average* social conditions of production, x pounds of cotton are made into y pounds of yarn, then a day's labour does not count as 12 hours' labour unless 12x lb. of cotton have been made into 12y lb. of yarn; for only socially necessary labour-time counts towards the creation of value." [I, p296, emphasis added] "A further condition [for the determination of socially necessary labour-time] is that the labour-power itself must be of *normal* effectiveness. In the trade in which it is being employed, it must possess the *average skill, dexterity and speed prevalent in that trade*, and our capitalist took good care to buy labour-power of such *normal* quality. It must be expended with the *average* amount of exertion and the *usual* degree of intensity...." [I, p303, emphasis added] "If the *labour-time of the worker is to create value in proportion to its duration, it must be *socially necessary labour-time. That is to say, the worker must perform the *normal social* quantity of useful labour in a given time. The capitalist therefore compels him to work at the normal social *average* rate of intensity....For every intensification of work above the *average rate* creates surplus value for him...[Resultate, p. 987; emphases in original] "It is always...in the form of the governing market price or the market price of production, that the nature of commodity value presents itself, its character being determined not by the labour-time needed by a certain individual producer...but by the socially necessary labour-time; by the labour-time required *under the given average social conditions of production* to produce the total socially required quantity of the species of commodity available on the market." [III, p. 780, emphasis added.] I note in this connection that in the excerpt you cite from Volume I, Ch. 15, Marx never says that the labor value of commodities produced by "labor-squandering" [but presumptively cost-minimizing!] techniques is less than the labor actually expended. Thus, at best it is not clear that the definition of SNLT you adopt is the one Marx had in mind. But maybe it should have been? What would happen if we did so? 2) As you've no doubt established under more general conditions than I examined, when alternative techniques for producing a given commodity are available to all firms in the market, and these firms take input commodity prices as given, the labor content-minimizing technique will exhibit a higher organic composition than the capitalist cost-minimizing technique so long as surplus value exists. This result is of course consistent with the excerpt you cite from Vol. I, Ch. 15 (though perhaps not uniquely so--see below). Thus arises the *possibility* you note that factors influencing the cost-minimizing technique need not affect the value-determining technique. 3) But does this possibility translate into the categorical result you've claimed in the passage displayed at the beginning of this post? I think it depends on the explanation given for why firms do not universally adopt the cost-minimizing technique over the labor content- (LC-) minimizing one; that is, why it occurs that something other than the cost-minimizing technique is in "current use," since presumably the cost-minimizing capitalists would be able to compete the LC-minimizing capitalists out of business. Once this happens, of course, the cost-minimizing and LC-minimizing technique is the same, and my interpretation of the connection between commodity prices and values remains valid. I can think of four scenarios in which the two alternative techniques might coexist: A) The market for a given commodity is in flux, so there has not yet been an opportunity for competition among sellers to drive out the non-cost-minimizing firms. This interpretation clashes with Marx's contention that values regulate the respective magnitudes of *average* commodity prices, that is, those that emerge after netting out the effects of supply and demand *oscillations* (see, e.g, I, p. 269, footnote). It's also hard to see how such a situation could legitimately be termed "normal." B) Some capitalists pursue an objective other than profit, and thus are willing to forego some profit in favor of meeting some other objective that somehow translates into LC minimization. This interpretation clashes with Marx's stipulation that he treats each capitalist as representative, since he clearly sees the representative capitalist as intendedly profit-maximizing and thus cost-minimizing. Thus, for example, this passage from Volume III: "No capitalist voluntarily applies a new method of production, no matter how much more productive it may be or how much it might raise the rate of surplus-value, if it reduces the rate of profit. But every new method of production of this kind makes commodities cheaper." [III, p. 373] C) Some firms enjoy competitive cost advantages not enjoyed by other firms, leading to a situation of "pure competition" if all firms still take output prices as given. For example, some firms have managers with unique abilities to utilize labor-reducing machines in cost-effective ways relative to other competitors. While this scenario is not inconsistent with Marx, and indeed he explicitly treats it in V. III Chapter 10, it is precisely the case in this scenario that one *can't* plausibly generalize the LC-minimizing technique to the entire market, because the production advantages are scarce and thus non-generalizable. If this weren't the case, we'd return to the condition of scenario (A). D) There exists monopoly or monopsony power in input markets that translates somehow into wage discrimination, so that some firms' cost-minimizing technique produces commodities with less labor content than others. This seems inconsistent with the sense that Marx intended the notion of labor values to apply even to (*especially* to) markets that are "competitive," i.e.-nonmonopolistic in nature, and again there is a problem of generalization: In general, the LC-minimizing firm would be the one that faces the discriminately high wage rate (per comment 2 above), and to "generalize" this is to imagine that labor values are constructed by insisting that actors with market power quit wage discriminating. I note that with the possible exception of scenario (D), in none of the above scenarios is it guaranteed that the LC-minimizing technique is unaffected by relative input commodity prices. For example, in (B), even non-profit-maximizing capitalists might make marginal tradeoffs with production cost, and in (C), even with unique production advantages, otherwise cost-minimizing firms would still respond to changes in relative input prices. Thus even if one could conjure up coherent cases in which LC- and cost-minimizing techniques differ yet coexist, it would arguably still be the case that relative input prices influence commodity values even as *you* define them. 4) It seems to me that this definition of labor value would be difficult to implement empirically. That is, if it weren't the case that all firms use the same technique (in which case, supposing that that technique were cost-minimizing, my comments about the connection between input commodity prices and labor values would again apply), one would have to have data on *all* of the extant production techniques in *each* market in order to calculate commodity values, rather than average direct and indirect labor expenditures, which would be a very difficult empirical exercise indeed. Do you attempt to find and incorporate such data in your empirical work with Allin, for example? 5) Finally. One way of reconciling the above with Marx's usage of the term "labor-squandering" in the excerpt you cite is to distinguish two notions of commodity, one (based on average production conditions) that putatively relates to commodity prices, and one (based on generalizing the extant LC-minimizing technique) that relates to a *normative* condition based on minimizing total labor expenditures. I wonder if Marx might not have had something like that in mind. Gil
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