In the discussion about abstract labor, Michael
Perelman asked Paul Cockshott about the
valuation of constant capital. In his reponse, I
think Paul reveals some of the problems created in
attempting to derive value from labor hours while
ignoring money. Let me explain by way of example.
If I buy a machine produced in, say, Period I for $500
and that machine "embodies" 50 hours of abstract
labor, then I am ready to begin production in Period II
with my fine new machine. Now, if, as I produce, the
producers of my machine are able to produce it in less
time, say 25 hours, do we then say that I am out $250?
Where's the loss in Paul Cockshott's method of assigning
values to constant capital? Is there a loss? If my
workers only created $50 in surplus value, I would be
short $250 as I gain $50.
It would seem that assigning values in Paul's fashion would
force us to take up our erasers in earnest as replacement
costs fall. Note that I have tried to follow Paul's ideal method,
heaven only knows what happens when we look at National
Income Stats.
-- John Ernst