OPE-L message, Re: [OPE-L] questions on the interpretation of labour values

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Re: [OPE-L] questions on the interpretation of labour values

Hi Ian,

Your question is one of the typical questions that due to the ambiguity of
the terms (ambiguity in which all of us fall) can be misleading and generate
many misunderstandings. However it is a crucial question that deserves to be
answered after trying to reduce ambiguity to a minimum.

The answer is yes or not, depending on what is what you are exactly meaning
by "labour-values" and "price magnitudes". This is not a joke. All of us
should be extremely careful with the terms. Let me explain in what sense I
say this. We have on the one hand market prices (m), production prices (p)
and direct prices (w), and on the other hand market values (mH), production
values (pH) and direct values (wH). The three later are measured in hours of
labour, the three former in euro. Let's call wH, pH and mH "A values", and
call w, p, and m "B prices". Now you must clarify whether you are asking if
A values can be calculated independently of B prices, or if wH and w can be
calculated independently of mH and m.

The following table can help in the understanding of this point:

A values

B prices

Values and prices with profits proportional to variable capital

Values and prices with profits proportional to total capital

III

Values and prices including different rates of profit in each sector

(or w = m·A + l in monetary terms).

Let's call (1) the traditional formula, and (2) the "correct" formula. My
point is that if (1) has replaced (2) in the historical debate is due to the
fact that Marx assumes in Capital I and II that m = w (which is a legitimate
assumption), and in Capital III that m = p (which is a legitimate
assumption). But he knew that in general m is different from w and p, so
that the "general" _expression_ need to be (2).

The debate about the TP registers different interpretations. Most authors
believe that the transformation is the pass from wH to p, Shaikh thinks that
it is the pass from w to p, Duménil thinks that it is the pass from wH to
pH. My view is that: 1) it affects both columns and 2) it is "double".
Therefore the transformation goes from I to II, and then from II to III.

Now I can come back to your question. The value of a commodity includes
direct labour plus indirect labour, but the latter has to be computed as the
labour countepart (mH) of the money spent in purchasing the inputs at their
market price (m). Marx insisted: it doesn't matter which valuation we use
for the inputs since the important thing is the process of creation of new
value. In my opinion, in a general context where the State, the ground rent,
etc. are present, it is market prices (market values), including taxes and
rents among other things, what has to be used for valuating the inputs.

This is why I conclude that "values" (i.e. values and prices "I") cannot be
calculated independently of prices (i.e. values and prices "III").

Best wishes,
Diego