From: Alejandro Agafonow (alejandro_agafonow@YAHOO.ES)
Date: Wed Aug 22 2007 - 11:37:41 EDT
Dear Ian:
By definition a heretic doesn’t pontificate, and I’m one. If your training as economist or social scientist has passed inside the happy land of one single doctrine, I could understand your astonishment by the opinions of a doctrinal foreigner. But the master rule to follow in scholarly debates is to be as rational as possible and avoid discrediting the opponent with spurious accusations.
So let’s concentrate in the real problem. Of course, you are free not to discuss with me.
1) Ian Wright: «You expressed surprise by the Engel quote. And you are also surprised "that the mismatch between the labour-embodied in a commodity and the labour-commanded" don't worry me. Perhaps your repeated surprises are due to the fact that you do not yet fully understand what is meant by "the law of value".»
But when, referring to Engels, I wrote that only when market reaches the point where commodities are fully useful, then commodities have their full labour value (otherwise market mechanism depreciates its labour content) you formulated the question: Isn't it precisely the other way around?
Why do you believe that market prices lag labour-values? Because you (1) have in mind a fictitious concept: that of an attractor; and because you (2) are not considering price as a sharp mechanism for rationing goods according to gained and lost individual marginal utilities. You can’t accept the second one without harming the first one. Labour time is reallocated in a market economy thanks to the full action of entrepreneurs according to the profitability of production but, what hides back profitability? The willingness of consumers with sufficient buying power to execute it. The primary motion of market mechanism in Capitalism rests on monetary capability to consume, and on a plain willingness to consume in Market Socialism provided that the distribution of income is almost equal.
The idea of an attractor could be useful to imagine the steady state of an equilibrium provided that there is not technological change and consumer’s preferences are static. But when you liquidate these provisos the metaphor becomes problematic. I think that you still can use it as an equivalent for ratios of market-clearing prices provided that they are equal to unity, as in Strumilin’s theory. But then you have to face a crude reality: labour value in itself doesn’t attract prices, but you as a planner have to follow prices to allocate labour. If you do not so, consumer market will depreciate the labour content of products and you will have an imbalanced economy with overproduction of some products and underproduction of others. You will have not sold inventories and long lines of consumers trying to catch their most subjectively valued products.
So I affirm, it is precisely the other way you pointed.
2) Ian Wright: «[…] the fact that market prices do not coincide with natural prices doesn't imply that the law of value is false.»
The law of value would not be false but as I argued above, the direction of causality you pointed, that is, market prices lag labour-values, is wrong. The usefulness of attractor metaphor rests only upon a macro scale but it brakes when you have to explain micro allocation of resources.
3) Ian Wright: «In the social sciences we cannot create experiments that produce closed systems in which social mechanisms are revealed in their "pure form". We therefore have to use the power of abstraction instead. The "law of value" is just such an abstraction.»
I agree with you. But some abstractions are better than others. When you think in the law of value operating in an open system, my remarks in the point 1 above prevail.
4) Ian Wright: «A product that cannot sell fails to command labour. But this event does not imply labour is not embodied in its production. A product has labour-value regardless of whether it meets a social demand or not. In this situation, a fraction of the total social labour has not been equalized with another part.»
The interpretation of value as labour, directly clashes with the idea that a product has value regardless of whether it meets a social demand or not. If something has the faculty of conferring the property to be valuable, it must do so without the possibility of lose that faculty during the accidents of productions. That’s why I see a dichotomy that subjective value has not, because in the later a product has the property to be valuable as long as it could be of usefulness for somebody, independently of the accidents of production.
Kind regards,
Alejandro Agafonow
----- Mensaje original ----
De: Ian Wright <wrighti@ACM.ORG>
Para: OPE-L@SUS.CSUCHICO.EDU
Enviado: martes, 21 de agosto, 2007 22:48:04
Asunto: Re: [OPE-L] A startling quotation from Engels
> I also could express my doubts about your knowledge of Austrian and
> Liberal-Socialist economic literature. But it could embark us in a sterile
> mutual accusation.
Express your doubts since I know very little of the Austrian
literature and said so on your arrival on this list. But one rule I
think it wise to follow is to not pontificate on subjects one knows
little about, especially in the context of a scholarly debate.
In your contributions you are rather quick to characterize what
Marxists understand by the theory of value. But your characterizations
do not correspond to what I understand Marx's theory to be. It seems
more like caricature.
You expressed surprise by the Engel quote. And you are also surprised
"that the mismatch between the labour-embodied in a commodity and the
labour-commanded" don't worry me. Perhaps your repeated surprises are
due to the fact that you do not yet fully understand what is meant by
"the law of value".
Regarding the issue of the dynamic interaction between labour-embodied
and labour-commanded as an essential moment of the law of value then
you could read this paper
http://65.254.51.50/%7Ewright/sce.pdf
which is to appear in Review of Political Economy.
You have not responded to my introduction of the important distinction
between market prices and natural prices, and the difference between
laws operating in open and closed systems.
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