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

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Hi Ajit,

Remember the table I used in a previous message:

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

This table is a simplified version of the table I put in my paper. But it suffices to better understand the extensive quotation of myself I make now (apologies for this) that, I believe, it is difficult to summarize in other words:

âNow, the relationship between A and B expresses the necessary relation between the inner magnitudes of values and their monetary _expression_ as exchange values. As true values only exist when all products are produced as commodities, and this implies the existence and functioning of a general equivalent of all other commodities, values have to be expressed in certain quantities of the general equivalent, money. Therefore, all variables in the A side of the table are expressed in hours per unit of commodity, and those of the B side are measured in euro per unit of commodity. But as money is and acts as a special commodity because it is the only general equivalent of all other commodities, it is clear that when any singular commodity is actually being related to money in the market it is in fact being related (as values) through the market with all other commodities (as values).

Therefore, converting values from labour into money is thus just to compare each type of commodity (and its content) with the rest of them (and their content). It is just to interpret the value of each commodity in a comparative or relative way, either it is compared with any other specific commodity (as commodities i and j in column B1 of the table) or with the âaverageâ or âsocialâ commodity, only susceptible of being represented by moneyâeither gold money (column B2) or credit money (column B3).

However, linking a specific quantity of labour-value necessary for reproducing one unit of commodity i with the exact specific quantity of money representing the same basic factâthe need to spend a certain quantity or fraction out of the mass of social labour for reproducing one unit of iârequires something more. It requires in addition conceiving of and measuring value as a certain quantity not of one or another type of labour but of âaverageâ, âsocialâ labour (simple human labour). Thus, dividing any price in the right side of the table, any âB-priceâ as can be called, by the average, social productivity of labour in terms of moneyâwhat we call Ï and is equivalent to the âmonetary _expression_ of labour-timeâ, but preferable to the âinverse of the value of moneyââ, amounts to measuring the values, or âA-valuesâ, in hours of average, social, simple, abstract labour, which is the only sort of labour that can appear in Table 1.

As a consequence, and this is an important conclusion, all B-prices in the table (i, w, p, m) can be interpreted as the simple result of multiplying the A-values (iH, wH, pH, mH) by Ï. And likewise, the A-values are just the result of dividing B-prices by Ï.

It can be seen that our âdefinitionâ coincides as a practical result with the âmonetary _expression_ of valueâ (DumÃnil and Foley, 2006) or the inverse of what Fine, Lapavitsas and Saad-Filho (2004) calls the âlabor _expression_ of moneyâ. However, it is preferable to use âthe average, social productivity of labour in terms of moneyâ than the inverse of the âvalue of moneyâ often used in the literature (see for instance Foley, 1982), in order to taking into account what according to Marx is the âcontradictionâ between the âtwo valuesâ of money. As Foley himself writes, âthe value of money as defined here will not be equal to the labour value of the money commodityâ (1982, p. 39). And RodrÃguez-Herrera has emphasized the same idea by insisting on Marxâs idea of the âcontradictory character of the form of valueâ and its application to money, what means that any producer selling his product for money appropriates on the one hand the âvalue embodied in the use valueâ of a certain quantity of money, and on the other hand âthe value representedâ in it (1994, p. 20).

In any case, our defence of the average social productivity of labour is at least as much an âunambiguous method of measuring the monetary _expression_ of labourâ as that of the NI, and thus cannot be the object of the criticism made by Foley to the TSS definition of the monetary _expression_ of value of not being âsingleâ nor âconsistentâ (Foley, 2000, pp. 24, 33). Similarly this method avoids other criticisms made against the NI: âThis calculation, based on the definition of the value of money simply as the value commanded by money in circulation, detaches both money and its value from the monetary and financial processes that link money to the general movement of capital accumulationâ (Fine, Lapavitsas and Saad-Filho, 2004, p. 9).

As for the exact quantification of Ï, and having into account that total output holds invariable through both transformations (see below):

(9) wx = px = mx,

we reach the result that Ï can be defined either in gross terms (what we call Ï1):

(10) Ï1 = mx/lx

= px/lx

= wx/lx

or alternatively in net terms (Ï2):

(11) Ï2 = mÂ(I-A)x / lx

= pÂ(I-A)x / lx

= wÂ(I-A)x / lx

Therefore if we call all the A-values simply Î, and all the B-prices Î, we can express every horizontal movements going from A to B and vice versa in Table 1 as done in equation (12), whereupon we can conclude that this kind of movements are simply a sort of âtranslationâ from one language to another, which can be checked in the apparent chaotic way of _expression_ of Marx in Capital, that is not but the result of this double correspondence:

(12) Î = Î ÂÏ;

(or: Î = Î/Ï)

II. As for your questions âWhat do these "values" do in your theory? In other
words, what questions they help you answer?â:

As I think that you are not asking me about the role of labour-values in general but the role of my version of them, my answer is that I would like just to contribute, as I believe all of us want to do, to a better and better definition of a tool like the LTV, that must help to better understand the real world, especially the level and movement of real prices and their connection with real processes of labour. I defend these definitions of values and prices because I think they explain better actual prices and are more concrete and general that the traditional ones. On the other hand they can help to defend the LTV against some of its critics by showing that, once values and prices are (re)defined in this way, many of the criticisms become trifling.

Cheers,

Diego