[OPE-L] New article at artefact

From: Jurriaan Bendien (adsl675281@TISCALI.NL)
Date: Tue Feb 21 2006 - 18:37:28 EST


> In the real world the common substance of which commodities represent
> respective aliquots is in fact social labor time, no?

I think so, but point is that this is only an economic theory - in Marx's
argument, the common substance is "value", and the substance of value is
society's labor-time. I think though my remarks are correct, and that
Marx's "proof" in the introductory chapter of Das Kapital was flawed.
What commodities "have in common", could be simply e.g. that:

- they have prices
- they are offered for exchange
- they possess utility
- they are needed
- they are scarce.

Because this is so, many different rival theories of economic value have
been proposed in the history of economics, and the credibility of each
depends on their coherence and explanatory power. However, it is impossible
to prove conclusively with logic that any theory of value is true and the
others false, because of the nature of value itself, which can be
interpreted as a subjective, intersubjective, objective, transformative or
transcendent criterion/quality/relationship. So each theory is only an
interpretation which is more or less credible or plausible. One way that
Marx does advance the discussion is by asking "what, in the real world,
decides the popularity of one interpretation of value over another?".
Broadly speaking, if unemployment is low, few people believe in the
LTV. If unemployment is high, many people believe in the LTV.

It is interesting to note that Marx became irritated with the idea that
he had to "prove" his concept of value, he refers to the idea that
"the truth is the whole", i.e. that he was able to provide an integral
conception of economic life based on his concept. This refers to
the explanatory power of an interpretation. His "Hegelian" introductory
chapter, it seems, was mainly aimed at explaining "the obvious",
having in mind clueless German professors "pontificating" about
value without having thought the matter through till the end, using
examples that could be understood by workers making their
come-uppance in the world. Indeed, Marx remarked something
like "ordinary workers and businesspeople can understand my book,
only the academics hacks fail to understand it." Maybe so, but
that is not a proof either. There is no absolute proof possible,
only a more or less plausible interpretation, with more or less
explanatory power. And in all of that, we have to be precise
about what the explanans and the explanandum are.

In analysing and defining the nature of the commodity (tradeable product),
it is not logically required to assume, as Marx does, a "common substance",
only its practical exchangeability. We only need assume minimally the
Aristotelian value-in-use (utility) and value-in-exchange (tradeability). I
agree there is a difference between simple commodity production and
capitalist commodity production, but this does not really affect the basic
concept of what a commodity is, at most you can say the commodity form
develops over time, through increasingly sophisticated forms of trade. In
a primitive or undeveloped market, the exchange-value of commodities (what
they are really worth) is often not easily comparable, because there is no
readily available yardstick of comparison, but this does not mean that the
commodities aren't traded, for that reason. They are traded, and through the
experience of regular trade, it becomes apparent what their comparative
value really is. The most abstract commodity is probably credit-money
which has a probable future earnings-potential.

Economic value is an attribute of labor-products, which is a quality
with a definite magnitude, and this quality exists by virtue of relations
between people, between people and their products, and between
their products. But Marx was often insufficiently precise in his use
of the term "value", referring rather loosely to value as a substance,
quality, magnitude or as a relation
(bear in mind also he did not publish Vols. 2 & 3).

He was basically interested in the value relationships that exist
behind prices. For an experienced econometrist or businessman
this is no particular problem, the problem is more how you can
empirically verify those relationships. And there is not just "one way"
to do that. What you have is quantities of labour-time performed,
and quantities of transactions during an interval, which you can group
into stocks and flows of various kinds, with some monetary
assumptions. So, any verifiable measurement has to include
the temporal dimension anyway.

We have now available, for most countries in the world, an
enormous amount of data on hours worked and value produced
in aggregate. This creates the possibility for testing out many
hypotheses about the relationship between labor and value.
Yet almost NOBODY is doing it.

As regards the TP, the Dutch student W. van Drimmelen argued
in his 1976 Phd thesis on the topic (following Seton) that the TP is
solvable if one introduces an assumption about the price level
(choice of numeraire, or invariance postulate). The problem was that
as he quotes, "there does not seem to be any objective basis
for choosing any particular invariance postulate in preference
to all the others" (Seton 1957, p. 153). Additionally, production
prices can obviously be obtained without any reference to
labor-values. Neither Marx nor Engels in truth believed that
there would be an exact identity between production prices
and values (or total surplus values and total profits) in a moving
reality, and they said so, explicitly. But Marx did think, there was
a relatively close correspondence between them. The deviations
between production values and production prices would not
be so great. And to some extent, you can model or test that.
In that sense, Ian has got to be correct.

What mathematics forces us to do is to make our economic
concepts more exact, but mathematics itself
cannot supply the concepts, it can only operate on them
quantitatively, to reveal their implications, i.e. if you mean
this, it has this quantitative or logical implication, and if
you mean that, it has another implication and so on. That's
useful if it encourages more rigorous thought, i.e. a better
framing of problems or categorisation (you cannot mean
this and also mean that, if you are consistent etc.).
But I doubt whether a timeless, self-replicating three-sector
model of the economy is very informative; I could of
course be wrong (Leontief's input-output tables are
another story).

I do not think talk of "dialectics" will solve very much,
what is required is a better understanding of how
the micro and the macro levels reciprocally affect each other.
This takes us into a discussion of what markets are,
and how they function, what prices are, and so on.
Marx was only trying to trace out how the law of value would
operate under specifically capitalist conditions, in its "ideal
average", but his sketch by no means exhausts the problem.
Extra surplus value might be the fulcrum of capitalist
competition, but it is not the only dimension of

Ilyenkov talking about dialectics is a bit like the
pope talking about christianity. A "general rate of profit" and
an "average rate of profit" are not the same thing; a "general"
rate implies that a rate of e.g. 10% becomes the ruling
norm (i.e. a certain rate becomes "generalised"),
and an average rate means that different rates
"average out" to e.g. 10% on capital invested. You can
investigate the implications if 10% becomes the ruling
norm, but in reality of course there is usually only a
statistical average. Marx talks about the "formation"
of a general rate, i.e. a tendency of different rates
to level out to one uniform rate, and then you can
investigate what the outcome would be, if that rate
existed. But this is only examing the problem in its
"pure form". I don't have the time to develop all this
in detail just now.


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