Re: Dynamic value and natural price

[Paul Cockshott <wpc@xxxxxxxxxxxxx>]

Phil Dunn wrote:

 
I associate these R-potentials with natural wages and natural prices
(or, more accurately, natural price markups).  These natural wages
and prices are not sums of money.  In a simple reproduction model
money prices and wages would be equal to natural prices and wages but
natural prices and wages come under intrinsic value.  A natural price
markup is a property of an individual valorization process.  A
natural wage is a property of an individual producer commodity (an
producer commodity is individuated by skill -- so all plumbers would
come under one individual producer commodity).

Adam Smith distinguishes between natural and market prices and wages.
I am dropping his ideas of natural rates of profit and rent.  Market
prices fluctuate and at any one time are dispersed about natural
prices.  To measure the natural price markup we use wage data.  We
use real wages -- the average hourly wage is equal to 1. Then we
recalculate each firm's wage bill using not the actual wage paid to
each worker, but the economy-wide average wage paid for each type of
skill.  Since these economy-wide averages will be statistically
independent, the recalculated real wage bill will be immunized
against market noise.  The greater the number of different skills
used by the firm the better this works.

This seems an interesting procedure could you please elaborate
on what data one would need for this.
Would you need a breakdown in the wage bill of each sector into
types of labour for which the wages were paid?
 
 
>  This recalculated real wage
> bill is an estimate of the natural price markup, the R-potential for
> value creating labor activity.

Is the wage bill an estimate of natural price markup, or is the
ratio of wage bill to selling pirce a measure of natural price markup?
 
 

 

The natural wage is a bit more complicated.  We use price data.  We
need to do a least squares fit:

minimize with respect to x the square of  (y - Mx)

where x is a vector of hourly natural real wage rates, y is a vector
of recognized labor activity, measured by money, expressed in hours
and M is a matrix.  The element M(f,t) gives the hours worked in firm
f  by workers of skill type t.  We need to have the number of firms
much greater than the number of skill types to get good immunization.

The potential price markups should be equal to wage bills
recalculated at natural wage rates.

Have you done any studies using this method?
-- 
Paul Cockshott
Dept Computing Science
University of Glasgow



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