In the dispute that some of us are having
with Andrew, there seem to be three fundamental
points at issue.
The first, concerns what we are trying to do.
1) Are we attempting to produce an interpretation
of Marx, or are we attempting to develop a theory
of the laws of motion of modern society?
The next two questions fork off from this.
2) Is Andrews theory of value a better scientific theory
than the commonly understood labour theory of value?
3) Did Marx share Andrews theory of value?
Aims
----
I can not speak for others, but my motivation is
definitely not to interpret Marx, or even the world,
but to better understand the laws of motion of modern
i.e., capitalist and socialist society. It is only
by grasping the laws which govern a process that the
process can be brought under conscious control. Thus
to change the world one must understand its laws.
In particular, if one is to bring economic activity
under democratic control, we must understand the key
laws under which it operates. Central to these are
the laws regulating the distribution of human activity
between different branches of production, and how
these operate under different production relations.
My interest in the labour theory of value, is not
philosophical, but arises from a conviction that the
understanding and use of it, is central to the successful
construction of socialist economy.
In the past, I have also been interested in it as
a component of understanding the unfolding of particular
conjunctural crises in capitalist economies. This for
the very practical reason that any political intervention,
election program etc, has a better prospect of
success if its remedies are based upon what is happening
or likely to happen.
Quality of the theory
---------------------
This aim means that a theory has first of all to be
judged on its scientific merits.
At one level this is a pragmatic matter.
If one calculates ones actions on the basis of it,
is one likely to be decieved?
But there are more general considerations involved.
There is the principle of economy of information.
Other things being equal one will prefer a simple
and concise formulation of a law to a complex one.
There is the principle of breadth of application.
A theory with a wide field of application is to
be prefered to one with a narrow compass.
There is the principle of unification. A theory
that unifies otherwise distinct domains within
a single explanatory framework is particularly
powerfull. The applies whether it is the unification
of physical laws in Maxwells electromagnetism or
in the 'Standard Model', or whether it applies to
apparently quite divergent fields: Shannon's use
of Boltzmann's entropy measure, Edelman's neural
Darwinism, Kaufmann's integration of Boolean circuit
theory with enzymatic regulation.
Another principle is that of transformational independence.
If one changes ones frame of reference - within
certain constraints - the theory should still hold.
The more general the transformation under which the
theory holds good, the more powerful the theory.
On all these grounds, a theory which develops the
concept of value in terms of the labour required to
produce something, is to be prefered to one which
derives values from prices as well as labour.
It obeys the principle of simplicity, value is derived
from labour alone rather than labour and price, and
is determined by the recursive application of a single
rule. It does not bring an as yet unexplained variable,
price, into the definition, nor does it have to
explain why, in calculating values, the first step
of the proceedure can not be applied recursively.
It obeys the principle of generality. Value defined
as labour time socially necessary for production, can
be applied to the understanding of non-capitalist
economies. For instance, if one knows the values of
the different outputs of a socialist economy, one can
decide from the outset that certain economic plans are
infeasible - if their output entails using more than the
total available labour time. Again, if one knows the
value of two different machines, it provides a way
in a socialist economy to gauage which is likely to be the
more efficient on a social scale. If one defines
value in terms of price, then one is in danger of
conceeding the Austrian objections to the impossibility
of rational economic calculation in a non-market
economy.
Allied to this the standard formulation of the
labour theory of value is independent of juridical
transforms, whereas Andrew's theory is not. Suppose
that in 1920 the production of mineral oil is controled
by a quite different cartel from the refining of that
oil. According to Andrews method of calculation, the
monopoly price paid by the oil refiners for their crude
oil must be treated as a true expression of that
oils value when determining the labour content of
refined petroleum. Suppose in 1921, the mineral oil cartel
takes over the refineries and these no longer buy
their crude from a distinct company.
Andrews method of calculating the socially necessary
labour time will make it appear that the value of
refined oil products has now fallen, since we no
longer have to take into account the crude that
was purchased above itsvalue, being able instead
to count the labour expended both in crude production
and refining.
Thus Andrew's version yields a set of answers that
for values that is specific to the particular
company organisation obtaining at the time. The
conventional labour theory of value is independent
of such juridical transforms.
In terms of unification, the classical labour theory
of value is to be prefered since it brings two
domains together, labour and prices, and explains how
the latter is a reflection of the former.
Consistency with Marx
---------------------
Much of what I intended to say in this context has
already been pointed out by Allin and Gil. Basically
it is that whilst in Capital, The Contribution to
the Critique, and in Wages Prices and Profit, Marx
repeatedly defines value in terms of the labour time
necessary to produce something, he nowhere, as far
as I am aware, states that value is determined by
the price of a commodities inputs, except insofar
as these price changes reflect value changes.
He moreover, goes out of his way to distinguish
between prices and values in Capital I, and
to criticise Smith for confusing the labour required
to produce a commodity with the labour that it
will command. That he should make all these points,
but in some secret or occult way still hold to a
labour commanded theory of value, scarcely accords
with the demands of parsimony.