Re: [OPE] Mastering Marxian Economics

From: Ian Wright (
Date: Tue Jul 29 2008 - 14:26:02 EDT

> Yes, I understand your wish to preserve the "´╗┐quantitative difference
> between the labor-value of the real wage and the direct labor supplied".
> The difference is said to be surplus value. However, I do not wish to
> preserve it as an element in value theory. The embodied labour value of
> the real wage, a bundle of use-values consumed, is certainly equal to
> the *absolute* value of money wages, or at least that part spent rather
> than saved. 
> By absolute value I mean the following. The absolute value of money is
> the ratio of aggregate labour time to aggregate value added, hours per
> dollar. To covert from the dollar price of any bundle of produced
> commodities to the absolute value, just multiply by this ratio.

So "absolute value" is the inverse of Dumenil and Foley's MELT.

You say that the "embodied labour value of the real wage ... is
certainly equal to the *absolute* value of money wages".

But I think this cannot be true unless prices are proportional to
labor-values. (I note that below you say just this).

> I also entertain the notion of real value. The real value of money is
> the ratio of aggregate labour time to the aggregate wage bill.

So "real value" is the inverse of the average wage rate.

> Money has two values. The reason for this is that produced commodities
> and producer commodities are incommensurable in exchange. They have no
> common measure. 

One of the problems I think with Dumenil and Foley's "new
interpretation" is that monetary magnitudes are linked to labor-time
magnitudes in two quantitatively different ways:
(i) The nominal wage rate.
(ii) The MELT.

Link (i) makes sense -- since money is objectively exchanged in the
market to command labor time.

But link (ii) makes less sense to me -- since the aggregate labor time
supplied is not objectively exchanged against the monetary value of the
net product. As Foley emphasizes, the MELT is an ex-post accounting
identity imposed by the theorist. But the objective basis of equating
these two magnitudes, in terms of actual economic processes, seems to be

I'm averse to committing to the idea that "money has two values". But I
do also think that the Dumenil/Foley approach naturally leads to this

> Absolute money measures the value of produced
> commodities. Real money measures the value of producer commodities.
> There are two disjoint spheres of equal exchange. In a money economy the
> medium of money ensures that effectively everything exchanges with
> everything else. Produced commodities exchange equally with produced
> commodities. Producer commodities exchange equally with producer
> commodities. But exchange between produced and producer commodities is
> neither equal nor unequal because they have no common money measure.
> This incommensurability is what makes surplus value possible.

Why "two disjoint spheres of equal exchange"? There is only one circuit
of capital.

How can you say that "this incommensurability is what makes surplus
value possible" when it seems natural to think that to explain the
*quantity* of surplus-value produced the "producer" and "produced" very
much need to have a "common measure"?

> My usual hobby-horse of the non-existence of price value deviations is
> implied throughout.
> I also have not brought in the distinction between relative and
> equivalent value. 

I am beginning to understand your point-of-view more clearly. But have
you considered the following:
(i) Price-value deviations are necessary for the law of value to operate.
(ii) Without a common measure we lose the ability to talk about the
quantity of surplus-value produced.
(iii) It seems incongruous to talk about money representing labor time
in 2 different ways.

Of course I have the beginnings of my own solution to these issues,
which is in the background of this response.

Best wishes,
ope mailing list

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