In reply to Andrew's OPE-L:5239:
>In reply to Duncan's ope-l 5229.
>
>
>(1) He writes: "the conception of surplus value in UC would always include
>the surplus value generated in luxury sectors, since it equals the non-wage
>share in value added, which includes luxury production. The idea was
>precisely
>to define an aggregate surplus value that would be distributed over various
>sectors by prices (perhaps, but not necessarily to equalize profit rates),
>but
>in such a way that the total surplus value is conserved, and proportional to
>the unpaid labor time."
>
Andrew replies:
>This is not at issue. The issue concerns determination: do changes in
>production conditions in luxury sectors lead to changes in the general profit
>rate?
>
>What you have stipulated can be satisfied even if they don't. You define
>(the
>monetary expression of) aggregate surplus-value in such a way that it must
>always equal aggregate profit. That will be the case even if w is determined
>as w = pb with fixed b, or b is determined by preferences and the budget
>constraint w = pb, in which w (in terms of a numeraire commodity) is a
>daturm.
> Yet in these latter cases, changes in technical coefficients in nonbasics
>will not lead to changes in the general rate of profit.
>
>As I've shown , given the simultaneist equation system
>
>p = (pA + wl)(1+r)
>
>and the aggregate budget constraint of workers
>
>w = pb
>
>the level of r is independent of technical coefficients in luxury sectors.
>Nonetheless, (1/m)lx - wlx, where (1/m) = [p(I-A)x]/lx, necessarily equals
>[p(I-A)x] - wlx.
Duncan comments:
Maybe this is a quibble, but it seems to me that w = pb is an additional,
auxiliary hypothesis in this argument. What I would say is that, _given_
the value of labor-power in the NS sense, the composition of demand
(including luxury consumption) can affect the surplus value. But if we
assume that the value of labor-power always adjusts to maintain w = pb, the
endogenous fluctuations in the value of labor-power offset these effects.
>
>
>(2) Duncan: " I took w* as given in my reply to you because it seemed to me
>that was the "ground rule" of the transformation problem in the abstract. In
>fact I suppose the value of labor-power in the UC sense is determined
>conjuncturally by the intersection of a whole bunch of concrete
>determinations. What makes me somewhat uncomfortable is my feeling that
>there is a longer-run conception of workers' standard of living that plays a
>real role in the system and is not just the ex post outcome period by period."
>
Andrew comments:
>My critique of keeping w* the same in the imaginary "value system" and the
>actual economy is that Marx's transformation deals with the values and prices
>of one economy, not two different economies. Yet the "transformation
>problem"
>is also not at issue.
>
>What is at issue is whether, in the *actual* economy, changes in production
>conditions in luxury sectors can lead to changes in the general profit
>rate.
>When one stipulates that the w* of the actual economy is exogenous, one is
>not
>saying it is invariant across two economies. Rather, one is asserting that,
>in the actual economy, the wage share of NNP is determined prior to prices,
>the money wage rate, the means of subsistence that workers need, etc., and
>that it determines them.
In the _actual_ economy, many, many factors come together to produce an
historical pattern, and I don't think the purpose of theory is to try to
mimic this very complex interaction through a simplified set of relations.
The NS concept of the value of labor-power is _ex post_, not _ex ante_. It
allows one answer questions like: "what was the rate of surplus value in
the U.S. economy in 1996?" Both Dumenil and I commented on this point in
some detail, proposing that the "transformation problem" made more sense as
the question: what economy with prices proportional to embodied labor
coefficients corresponds to a real economy with prices not proportional to
embodied labor coefficients. I'm aware that this is a key obstacle to the
acceptance of the NS position by, for example, Ajit Sinha, Anwar Shaikh and
David Laibman, but it does allow one to link up Marx's categories directly
with data on real capitalist economies.
Cheers,
Duncan
Duncan K. Foley
Department of Economics
Barnard College
New York, NY 10027
(212)-854-3790
fax: (212)-854-8947
e-mail: dkf2@columbia.edu