From: Fred Moseley (fmoseley@MTHOLYOKE.EDU)
Date: Wed Jun 02 2004 - 23:25:47 EDT
I have been very interested in the current discussion of Marx's theory of
value and money between Rakesh, Hans, Ajit, Howard, Ian, Riccardo, and
others (greetings to all). I have been trying to find the time to join
the discussion. This has been OPEL at its best.
I would like to begin by responding to Ajit's important question: "how
does one arrive at the measure of 10 hours of labor?" In other words, how
does one measure abstract labor?
My answer will be in terms of how I understand Marx's theory deals with
this question.
1. Marx assumed that the basic unit of measure of abstract labor, as the
"substance of value", is one hour of simple, unskilled labor, of average
intensity, and using average conditions of production.
2. Marx assumed further that, in the production of value, one hour of
skilled labor is equivalent to (or counts as) a multiple of one hour of
simple, unskilled labor (with different multiples for different kinds of
skilled labor).
"More complex labour counts only as intensified,
or rather multiplied, simple labour, so that a smaller
quantity of complex labour is considered equal to
the product of simple labour, hence it represents only
a specific quantity of simple labour." (C.I. 135)
Algebraically, Marx assumed in effect that
Lu = ks Ls
where Ls is the hours of skilled labor, ks is the specific skill
multiplier for each type of skilled labor, and Lu is the equivalent hours
of simple, unskilled labor.
3. Marx did not explain what determines these "skill multipliers" (the
ks's), that convert hours of skilled labor into a equivalent number of
hours of simple labor, but instead took these multiples as given, as had
Smith and Ricardo before him.
4. Ricardo's justification for taking these multiples as given was that
the precise magnitudes of these multiples DID NOT AFFECT THE MAIN
CONCLUSIONS OF HIS THEORY. Specifically, they did not affect the trends
of relative prices over time, especially the relative prices of
agricultural goods and manufactured goods, and the resulting trend in the
wage and profit shares in the UK economy, on the assumption that the Corn
Laws continue to be in effect. In other words, Ricardo's main question
was: what effect will the continuation of the Corn Laws likely to have on
the relative shares of wages and profit? The precise magnitudes of the
skill multipliers are not likely to have much effect on this conclusion.
5. I think that Marx's assumption of given skill multipliers can be
justified on similar grounds - that the precise magnitudes of these
multiples DO NOT AFFECT THE MAIN CONCLUSIONS OF HIS THEORY. The main
conclusions of Marx's theory are:
1. money is the necessary form of appearance of abstract labor.
2. total surplus-value is proportional to total surplus labor
3. inherent conflict over the length of the working day
4. inherent technological change
5. technological changes causes the rate of surplus-value to rise
6. technological changes causes the composition of capital to rise
faster than the rate of surplus-value
7. therefore, technological changes causes the rate of profit to
fall.
I don't think that the precise magnitudes of the skill multipliers are
likely to have much effect on these conclusions. Whatever these
magnitudes are, and whatever determines these magnitudes, they either have
no effect (nos. 1-4) or not likely to have much effect (nos. 5-7) on these
conclusions. Therefore, they are unimportant in Marx's theory.
6. The lack of an explanation of the determination of these skill
multipliers has long been considered a serious problem in Marx's theory
(from Bohm Bawerk on), and even a "fatal" weakness. But this is not
true. The precise magnitudes of the multipliers have little or no effect
on the main conclusions of Marx's theory.
7. I think Howard made a similar argument in a post on 28 May in which he
said that the "causal potency of the theory [Marx's theory] does not
depend on my being able to conceive it [the reduction of skilled to
unskilled labor]". In other words, the causal potency of Marx's theory
does not depend on it providing an explanation of the reduction of skilled
to unskilled labor. The particular reduction does not affect the main
conclusions of the theory.
Howard, what do you think?
8. These presumed quantities of labor-times are then used in Marx's
theory to determine the PRICES of commodities. More specifically, the
prices of commodities (Pi) are determined by the relative quantities of
labor-times in these commodities (Li ) and in the money commodity
(e.g. gold) (Lg ), as represented by the equation:
(1) Pi = Li / Lg
These prices that are determined by relative quantities of labor-time in
Volume 1 are very abstract. They are certainly not actual market
prices. Nor are they the actual long-run equilibrium prices, because they
do not take into account the equalization of profit rates across
industries (this more concrete phenomenon is explain in Part 2 of Volume
3). But at the high level of abstraction of Volume 1, this is the
"labor" theory of price that is presented by Marx.
I think I will stop there for now, and see what others have to say.
I also would like to eventually get back to the question of Marx's theory
of money, and especially his explanation of the endogenous necessity of
money. But I hope the above gives us enough to discuss for now.
Ajit and Howard and others, I look forward to your responses and to
further discussion.
Comradely,
Fred
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