[OPE] Reply to Paul Cockshott on Ochoa indirect labour methodology (correction)

From: Jurriaan Bendien (adsl675281@tiscali.nl)
Date: Thu Jul 24 2008 - 17:33:57 EDT


I do not deny the merits of this type of research at all, but statistically speaking the central questions are the extent to which the results obtained are simply an artifact of the method used, and what level of error is associated with the results if the method is accepted as valid. A statistician has to pay attention to all possible sources of significant error in his estimates, since otherwise he produces results of which he cannot even specify how well they might reflect the true situation.

If I cannot even reliably identify the total working hours associated with the production of an output due to a paucity of relevant data, the claim that the method can closely approximate the "true labour-value" simply falls down. 

Obviously it is one thing to argue that there exists an observably close correlation between changes in aggregate hours worked to produce an aggregate output and the magnitude of the output in price terms, but another thing to argue that time worked determines price levels or price relativities. Hence also my more modest reference to "empirical corroboration", rather than "robust evidence". I think to provide "robust evidence" you would need to show that a variety of different measurements all obtain empirical results which are mutually consistent. All you have proved so far, is that the empirical results obtained with one sort of method are at least consistent with what you would theoretically expect or predict.

I don't doubt at all that the law of value, correctly understood, exerts an important constraint on output prices (output prices, not all prices), but I dispute that: 

(1) this on its own is an adequate explanation of output price formation or output price relativities, since I think that in Marx's theory price movements mediate the contradiction between the "law of value" and the "law of competition" he mentions, a contradiction which causes systematic price-value divergences (within certain limits). 

(2) the law of value regulates all trade in the capitalist economy as a whole (contrary to most Marxist texts). 

I intend to write that up in an article in reply to Thomas Sekine, who argues essentially that the law of value is only a principle in the pure theory of capitalism, which has no empirical application whatsoever.  


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