From: Ian Wright (iwright@GMAIL.COM)
Date: Mon Sep 20 2004 - 00:47:56 EDT
Hi Ajit Thanks for the pointer to Garegnani, and your note that prices can be proportional to labour values in other models. > Ian, I think you need to distinguish between the 'law > of value' and the 'theory of value'. <..snip..> > The theory of value on the other hand > deals with predictions of particular exchange ratios. > They are entirely two different things and cannot be > conflated into one. I don't quite follow you here. Are you saying that a complete "theory of value" must predict prices? Therefore, the "law of value" is not a "theory of value" because it does not predict prices? I am happy to accept your distinctions for the sake of argument, with the caveat that it appears that the "law of value" is a reasonable predictor for prices. But it seems to me there is a problem with the criteria that a "theory of value" must predict prices. That's because prices can undergo all kinds of arbitrary transformations due to property rights specific to a particular economic organisation. For example, capitalist profits via ownership of the means of production fall into this category, and the price transformation due to this appropriation results, theoretically at least, in prices of production. But if we follow this criterion then a "theory of value" is specific to particular economic setups. For example, consider a hypothetical society of co-operatives, in which means of production are not privately owned, and firm revenue is allocated to firm members according to some democratic principle. That is, all members of society receive the same type of income. In this society prices will not be transformed due to equal returns on capital invested, although they may be transformed in other ways. Therefore, according to your criteria, this society will need a different "theory of value" to predict prices. But in both cases there are goods being exchanged in markets with prices attached to them. Both societies have concepts of economic value. It would seem natural to require a general theory of economic value that can apply to both cases. I think that a complete "theory of value" should be trans-historical, or more precisely, trans-social. That is, there are objective determinations of economic value that are necessarily reflected in any viable social system. We're still toiling in the realm of necessity after all. This is Marx's point about the trans-social necessity for every society to allocate social labour-time. The key point is that work must be performed and it takes time. But there isn't a trans-social necessity for capitalists to earn a return on investment. The latter is a distributional quirk of capitalism. And further, I guess that a general economic theory of value should also theorise different forms of value, and therefore not necessarily refer to quantitative prices at all. -Ian.
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