From: ajit sinha (sinha_a99@YAHOO.COM)
Date: Fri Dec 01 2006 - 17:46:14 EST
--- clyder@GN.APC.ORG wrote: > Quoting ajit sinha <sinha_a99@YAHOO.COM>: > > > allow you to move another step. Now, the > proposition > > Marx is making is not that empirically profits and > > surplus labor are observed to go together but > rather > > the *cause* of profit lies in surplus labor. This > > proposition is simply asserted but never proved by > > Marx. > > Marx proves it subject to the proposition that > exchange > value is proportionate to labour content. This > proposition > is taken over from classical political economy, and > as > such did not have to be proven against then existing > opponents. To demand that in the 1860's he addressed > alternative approaches to value that came into being > later is surely anachronistic. _____________________________ Paul, this is a myth. Don't believe in myths. Let me first quote to you one para from my chapter on Ricardo: [However, after admitting that labor is not the sole cause of variation in the value of commodities and that changes in distribution was another cause of variation in value, Ricardo goes on to argue that the variations caused by changes in distribution is of minor magnitude compared to the variations caused by the changes in labor expenditure. He considered that in the real world changes in distribution cannot cause more than six to seven percent changes in relative values and thus for all practical purposes it could be ignored in considering the cause of changes in the values of commodities: "The reader, however, should remark, that this cause of the variation of commodities is comparatively slight in its effects. With such a rise of wages as should occasion a fall of one per cent. in profits, goods produced under the circumstances I have supposed, vary in relative value only one per cent.; they fall with so great a fall of profits from 6,050l. The greatest effects which could be produced on the relative prices of these goods from a rise of wages, could not exceed 6 or 7 per cent.; for profits could not, probably, under any circumstances, admit of a greater and permanent depression than to that amount. … In estimating then, the causes of the variations in the value of commodities, although it would be equally incorrect to attach much importance to it; and consequently, in the subsequent part of this work, though I shall occasionally refer to this cause of variation, I shall consider all the great variations which take place in the relative value of commodities to be produced by the greater or less quantity of labour which may be required from time to time to produce them" (p. 36-37). This has led Professor Stiglar (1958) to characterize Ricardo’s theory as 93% labor theory of value. It should, however, be noted that Ricardo’s statement only refers to the cause of change in the relative values. As far as the divergence of value ratios from their labor ratios due to differences in time structure of capitals is concerned, it could be considerable. It should also be noted that Ricardo’s results have no general validity and are the products of his particular example. The variation in values could be much larger if Ricardo started from much higher rate of profits and thus allowed a larger fall in it. Furthermore, the variations in value would be much larger the two goods were far apart in terms of their composition of the direct and indirect labor-time. As a matter of fact, Ricardo was well aware of it and in the first edition of the Principles he had worked out examples of variations in relative values of two commodities produced by equal amount of capital investment but one produced by labor only and the other produced by machine only. Ricardo showed that a fall in rate of profits from 10% to 3% would cause the relative values to vary “68% if the machine would last 100 years; 28% if the machine would last 10 year; 13% if the machine would last 3 years; and little more than 6% if the machine would last only 1 year” (Works I, p. 60). It appears that Ricardo’s comments in the third edition relate to the relative value deviation from his chosen ‘money commodity’, which was supposed to be produced by a capital composition close to the average of the ‘most of the commodities produced’, leaving out the extreme cases.] Later on I show that contrary to Stiglar's thesis Ricardo's theory of value was analytical and not empirical in nature. In any case, no major political economists (such as Adam Smith, J.B. Say, T.R. Malthus and David Ricardo) believed that price ratios of commodities were determined by labor-time ratios. The two I know who thought this way were James Mill and McCullouch and Ricardo explicitly in writing tells them that he disagrees with them. Marx, of course, did not have much respect for either of them. As a matter of fact Marx is very proud of his theoretical distinction between values and prices of production and nowhere he tries to claim that the divergence of prices of production from labor-values would be minor one and so labor-values could be taken as a good empirical theory of price determination. So your subject to the proposition does not hold, and there is no proof provided by Marx. _____________________________ > > This does leave the interesting scientific questions > > 1. Was classical political economy right in assuming > that actual exchange values were closely > proportional > to labour content. _______________________ But they never did. This is just unsubstantiated allegation. _____________________ > 2. If this is the case, why is it the case. > > We now know that 1 is true, which leaves question 2. ________________________ No! 1 is not true, so 2 is irrelevant. ___________________ > > I think an adequate theory was provided by Farjoun > and Machover. They use statistical mechanics to give > a theoretical explanation for the regularities that > classical political economy had observed and taken > as > givens. So we do now have a 'theory of horses', even > if the classicals worked largely on the basis of > observed > regularities. ___________________________ To say that classical political economists had observed LTV and had taken it as given is simply preposterous! Now, I don't care about Farjoun and Machover's theory as long as you call it by their name. The problem arises when all kinds of people come up all kinds of theories and then tell me, 'you know what? This is Marx's theory of value' as if the rest of the world is totally illiterate about Marx's theory of value. Why can't people come up with their theory of prices and call it by their name and see whether it floats or sinks? Why all kinds of things must be imputed to Marx? And Marx had no theory of horses, btw. ____________________________ > > As I understand it, Ian has an additional theory of > his > own as to why the law of value holds, one whose > logical > consitency he has subjected to the test of > exhaustive > simulation, so you are being a bit harsh when you > say > he has no theory. _________________________ I don't know Ian's theory. I was referring to his logical argument about his theory of horses. I might not be able to respond for sometime as I have to get little busy with preparing for my seminar and other research work. So I hope you will not mind if I don't respond immediately. Cheers, ajit sinha ____________________________________________________________________________________ Do you Yahoo!? Everyone is raving about the all-new Yahoo! Mail beta. http://new.mail.yahoo.com
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