From: Paul Cockshott (wpc@DCS.GLA.AC.UK)
Date: Tue Nov 07 2006 - 08:25:20 EST
I have now made Dave Zachariah's new 18 country study of profit rates and labour values available on the web. http://reality.gn.apc.org/econ/Zachariah_LabourValue.pdf This is his conclusion -------------------------- We have found that market prices and labour value of industry outputs are highly correlated for a fairly broad sample of economies covering different sizes, levels of development and institutional structures. The results are in line with similar studies done for the US, Britain, Greece, Italy, former Yugoslavia and Mexico. (See Tsoul¯dis and Maniatis [18].) The distribution of price-value ratios remains narrow in relation to the distribution of profit rates and alternative value bases and is broadly consistent with the prediction Farjoun and Machover made some twenty years ago. The results for the alternatives indicate that the empirical strength of labour is not a statistical artefact. Production price is not found to be a superior predictor of market price and indeed deviates little from labour values. The equalisation of profit rates does not appear to operate in the way assumed by the theory of production prices: The distributions of profit rates were wide and showed no consistent sign of narrowing over time. Whatever forces pushing profit rates closer, they are always checked by counter-forces so profit rates should instead be thought to conform to some statistical distribution when the economy is in a stable condition. The profitability mechanism that pushes firms to move from low to high return industry sectors is likely to operate on a longer time-scale than the more immediate constraints imposed by the need to pay the wage-bill and by technical conditions represented by the production matrix. Reducing the scale of production in one sector while building up capital stocks in another is by its nature a relatively slow process. These constraints explain why the simple labour theory of value is better in accounts with empirical data than the theory of production prices. ----------------------
This archive was generated by hypermail 2.1.5 : Thu Nov 30 2006 - 00:00:06 EST