From: Jurriaan Bendien (adsl675281@TISCALI.NL)
Date: Mon Jul 09 2007 - 16:24:42 EDT
Ajit,
You said to me once something to the effect that an "embodied labour theory of value" was the only labour theory of value that could be logically sustained. I was thinking of that again, when I read your article in the Westra book. But what if Marx doesn't really have an embodied theory of labour? What if embodied labour is only an expository simplification?
"Indirect labour" can I think be thought of in at least two ways:
1) The actual amount of labour hours historically expended to produce the capital goods being worked with, to produce the new commodities ('dated labour" stretching into the past)
2) The amount of labour which is, on average, currently socially necessary to produce the type of goods being worked with, to produce new commodities.
In the second interpretation, there is no "dated labour", since the value of a commodity is valued only according to the current average valuation of its component parts - implying that previously produced commodities could be revalued or devalued at all stages of production, according to what the current social valuation of their component parts happens to be. This may admittedly be difficult to measure or model, but it is not an unclear notion. (In fact modern financial reporting standards, adjusting to the high mobility of capital and the speculative profit it makes possible, increasingly require the "current market valuation of assets" irrespective of historic cost).
It seems to me that the second interpretation is more credible in the light of what Marx actually writes. An "embodied labour theory of value" might, and here I agree with you, make some sense in the context of petty commodity production however, i.e. where you don't have an integrated market for all inputs and outputs, determining price formation.
Marx insists among other things, that price is never *reducible* to value, i.e. value and price are qualitatively separate aspects which can quantitatively vary independenly of each other, and indeed a good may have a price but no value, or a value but no price. In discussing ground rent, Marx furthermore states quite explicitly that in capitalist society the commodity values, their average prices of production, and their average market prices can, within certain limits, all vary independently of each other, to the advantage of some trading parties and disadvantaging others (i.e. they get more or less money in return for the labour they use, that is the critical commercial problem).
What now is the point of such an analysis? Presumably it is an attempt to explain the longrun pattern of movements in commodity trade in reproducible labour-products, the competitive stakes in that trade, and the way in which capitalist production will accordingly develop. If you only have market prices in your analysis, all you can state is e.g. that price X went up because price Y went up, and price Y went up because price Z went up, and so on ad infinitum. That theory may work for practical purposes, with a limited set of prices critical to your activity, but it does not work if you want to explain the economic movement of a whole society.
I don't follow your model of a two-sector economy in your article, because for my reading you don't define adequately enough what the quantities and descriptors mean in this case, and what is being assumed. Any model is useful only to the extent its assumptions are realistic and to the extent that the analogy to the real situation is reasonably good.
You also say it is "unclear on what grounds Marx could assert that a commodity exchange relation must be conceived as a relation of equality". I fail to see the problem here. If you say that
10 units of commodity A = 5 units of commodity B
then you have a simple relation of equivalence, for which no LTV is even necessary. Value theory is invoked, only if you try to explain how it comes about that this particular equivalence exists, i.e. why 10 units of A rather than 5 units, or why 5 units of B rather than 10 units etc.
At the beginning of Das Kapital Marx tries to prove that commensurability in trade is ensured by the fact that the products traded represent quantities of homogeneous abstract labour. But that proof fails, at most Marx shows that traders are able to recognise each other's products as labour-products, which can be brought into relation with each other and valued on that basis, which implies that the traders effectively abstract from the concrete labours involved, even if they are unaware that they are doing it. But that is not the only possible basis for valuation there is. The reason is that I could just as well argue that the products traded are commensurated simply because people want to trade them for various motivations (not just utility), or because they have a price, or because access to alternatives is more costly. In primitive communities, goods may not exchange according to their labour-value at all, although some necessary proportions probably had to be maintained, for survival reasons, i.e. you could only buy so much of a product because you could only produce so much of the product for which it exchange in a given time.
Marx's LTV is essentially a theory of the regulation of economic exchange, applying to reproducible labour-products in a market economy. But that regulation does not assume equal exchange. If equal exchange occurred naturaly, no regulation would be necessary, the market would regulate itself.
If, as Marx himself says, commodity values, production prices, and market prices can all deviate from each other, positively and negatively, then unequal exchange to some or other degree is in reality the norm, and equal exchange is only a simplifying assumption. It is just that, if the regulation theory is correct, the "law of value" places limits on the amount of unequal exchange you can have (above a certain socially established price norm, buyers will not buy, and below a certain price norm, sellers will not sell, and the argument is that this norm is in the long term set or constrained by value relations reducible to labour-time).
Jurriaan
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