Unfortunately, by now I've not yet found neither Dobb's work nor Robin's
one. The library of my city has many Dobb's book, but not that one. :-(
Next week I'll go and search for them to/in the library of university
faculty of Economics. I hope to find them. I'm also going to search for
Schumpeter's history of economic analysis or something like that.

However, in the meantime, I'm reading Wicksell's "Value, capital and
revenue". It seems to me that there are no newer valuable argumentations
against Marx's LTV [he quote a Bohm Bawerk's example - to show how
"utility" is the only-and-right unit of measure of value, of course].

There is just one question he does that I would you take a look at,
because it maybe is the only one worth speaking of. While criticizing
LTV, he says [it's a my - id est, wrong :-) - on-the-fly translation]:

«A manufacturable area* in the center of a populous town has, as anybody
knows, a very high value: is also this value a product of human labour?»

* I mean an [empty] area where one can edify upon. I hope I have chosen
the right term: though I think it's wrong, my Babylon dictionaries
hadn't found any better term. :-(

Well. I've formuled an answer to "justify" this situation according the
LTV. But I'd like to see how marxists would answer to that question.

Thanks!
L.

ps. sorry for my English!

From:	Ron Peterson
Subject:	Re: Value as product of human labour...
Date:	Wed, 12 Jan 2005 10:53:30 CST

"Loràn" wrote:
> On Sat, 8 Jan 2005 23:39:03 CST, "Ron Peterson"
> wrote:

> > Land isn't strictly a commodity,

> If one would search for the essence of value, I think it has to deal
> with all the exchangeable things. Or not? Land is exchangeable.

Society can ascribe ownership to land, but it's qualitatively different
from commodities since it can't be moved. If you are looking for an
essence of value, it has to be use-value. I am not sure that any type
of number can be associated with use-value.

> > Proximitiy to markets and a labor force also makes land more
valuable.
> > Land in a city area can be gained by tearing down existing
buildings so
> > there is a labor content to its value.

> This is similar to the solution I thought.
> And there is the same problem: this is not *embodied* labour, because
we
> are assuming that no-one has ever worked on that area.
> It could be just... how can I say it? mmm "potential labour".

In a capitalist economy, the market value will depend on how much the
site lowers the cost of production and the prevailing return on
investment.

> However, I think that changing Marx's LTV in this way - by adding
that
> embodied labour contains also this kind of "potential labour" - would
> not wreck it. Well, probably I'm wrong and it's already contained in
it.

I don't think that it's desirable to try to identify use-value with
labor-time-value since they are different concepts.

> > Marx distinguishes between labor-time value, exchange value, and
use
> > value.

> And average price, cost price and so on. :-)
> I've read Kapital vol I and Marx supposes that commodities are
exchanged
> at their labor-time value, that's called "exchange value". He builds
his
> value and surplus value theories upon the assumption that value is
> social labor-time embodied in the commodity.

Labor-time value is but one type of value and Marx was addressing
aggregate values for all commodities to illustrate the origin of
surplus value. To try to determine an embedded value for any one
commodity can be very difficult.

For instance, a doughnut company may produce doghnuts and doughnut
holes but their is no way to allocate the labor-time between those two
products.

--
Ron

From:	tijluilenspiegel
Subject:	Re: Value as product of human labour...
Date:	Wed, 12 Jan 2005 19:20:55 CST

"Ron Peterson" a écrit dans le message de
news:1105545595.161365.57170@z14g2000cwz.googlegroups.com...
>
> "Loràn" wrote:
> > On Sat, 8 Jan 2005 23:39:03 CST, "Ron Peterson"
> > wrote:
>
> > > Land isn't strictly a commodity,
>
> > If one would search for the essence of value, I think it has to deal
> > with all the exchangeable things. Or not? Land is exchangeable.
>
> Society can ascribe ownership to land, but it's qualitatively different
> from commodities since it can't be moved. If you are looking for an
> essence of value, it has to be use-value. I am not sure that any type
> of number can be associated with use-value.
>
> > > Proximitiy to markets and a labor force also makes land more
> valuable.
> > > Land in a city area can be gained by tearing down existing
> buildings so
> > > there is a labor content to its value.
>
> > This is similar to the solution I thought.
> > And there is the same problem: this is not *embodied* labour, because
> we
> > are assuming that no-one has ever worked on that area.
> > It could be just... how can I say it? mmm "potential labour".
>
> In a capitalist economy, the market value will depend on how much the
> site lowers the cost of production and the prevailing return on
> investment.
>
> > However, I think that changing Marx's LTV in this way - by adding
> that
> > embodied labour contains also this kind of "potential labour" - would
> > not wreck it. Well, probably I'm wrong and it's already contained in
> it.
>
> I don't think that it's desirable to try to identify use-value with
> labor-time-value since they are different concepts.
>
> > > Marx distinguishes between labor-time value, exchange value, and
> use
> > > value.
>
> > And average price, cost price and so on. :-)
> > I've read Kapital vol I and Marx supposes that commodities are
> exchanged
> > at their labor-time value, that's called "exchange value". He builds
> his
> > value and surplus value theories upon the assumption that value is
> > social labor-time embodied in the commodity.
>
> Labor-time value is but one type of value and Marx was addressing
> aggregate values for all commodities to illustrate the origin of
> surplus value. To try to determine an embedded value for any one
> commodity can be very difficult.
>
> For instance, a doughnut company may produce doghnuts and doughnut
> holes but their is no way to allocate the labor-time between those two
> products.

Marx knew very well of course the work Ricardo and in the beginning
inspired by his thougths:
and Ricardo says(in the principels):

"Possessing utility, commodities derive their exchangeable value from two
sources: from their scarcity, and from the quantity of labour required to
obtain them. There are some commodities, the value of which is determined by
their scarcity alone. No labour can increase the quantity of such goods, and
therefore their value cannot be lowered by an increased supply. Some rare
statues and pictures, scarce books and coins, wines of a peculiar quality,
which can be made only from grapes grown on a particular soil, of which
there is a very limited quantity, are all of this description. Their value
is wholly independent of the quantity of labour originally necessary to "

Speaking about land ownership later(cap 3) Marx used the term "monopoly":

"Landed property is based on the monopoly by certain persons over definite
portions of the globe, as exclusive spheres of their private will to the
exclusion of all others.[26] With this in mind, the problem is to ascertain
the economic value, that is, the realisation of this monopoly on the basis
of capitalist production. With the legal power of these persons to use or
misuse certain portions of the globe, nothing is decided. The use of this
power depends wholly upon economic conditions, which are independent of
their will"(cap.book 3 chap 37)...
and:
"One of the major results of the capitalist mode of production is that, on
the one hand, it transforms agriculture from a mere empirical and mechanical
self-perpetuating process employed by the least developed part of society
into the conscious scientific application of agronomy, in so far as this is
at all feasible under conditions of private property;[27] that it divorces
landed property from the relations of dominion and servitude, on the one
hand, and, on the other, totally separates land as an instrument of
production from landed property and landowner - for whom the land merely
represents a certain money assessment which he collects by virtue of his
monopoly from the industrial capitalist, the capitalist farmer; it dissolves
the connection between landownership and the land so thoroughly that the
landowner may spend his whole life in Constantinople, while his estates lie
in Scotland. Landed property thus receives its purely economic form by
discarding all its former ""(cap.book 3 chap 37
"
I understand that the money value of land represents de possibility to
realize
"the money assesment"-(the french translation says "the taxation") imposed
by the owner to those who rent ,the value of which is finaly produced by the
farmers and their labour, or in the case of constructable land within urban
aereas, by the workers (directly or via their employers) who are going to
live there.

regards tijl

From:	Loràn
Subject:	Re: Value as product of human labour...
Date:	Fri, 14 Jan 2005 02:46:57 CST

On Wed, 12 Jan 2005 19:20:55 CST, tijluilenspiegel@club-internet.fr

("tijluilenspiegel") wrote:

> Ricardo says(in the principels):

> ...

I've started to read its first chapter - "On Value" :) - some days ago!

> "Landed property is based on the monopoly by certain persons over definite

> portions of the globe, as exclusive spheres of their private will to the

> exclusion of all others.

Apart of Wicksell's example, I've known several people that bought a

building at low price, waited that the State had built streets and

services all around it and then had sold the same building (no embedded

labour was physically added to it) at (very) higer price.

Of course, if we look at the entire district instead of looking only at

that building, we could say that some physical works have been made. So

the entire district - but not only that building - still seems to

respect LTV.

Another example? see the other post. :-)

> I understand that the money value of land represents de possibility to

> realize "the money assesment"-(the french translation says "the taxation")

> imposed by the owner to those who rent ,the value of which is finaly

> produced by the farmers and their labour, or in the case of constructable

> land within urban aereas, by the workers (directly or via their employers)

> who are going to live there.

Ok, as Ron said me in the beginning, land isn't strictly a commodity.

As Ricardo pointed out, LTV does not explain some commodities value.

I think that a LTV admirer has to determine the scope of the meaning of

"commodity": Ricardo did that, by talking about commodities which can be

increased by human industry [almost without limitations]. Marx didn't.

My best,

L.

ps. thanks for quotes!

From:	tijluilenspiegel
Subject:	Re: Value as product of human labour...
Date:	Fri, 14 Jan 2005 10:56:09 CST

""Loràn"" a écrit dans le message de
news:i97eu0hgrr159emkndekdjnchsmf21gik0@4ax.com...
> On Wed, 12 Jan 2005 19:20:55 CST, tijluilenspiegel@club-internet.fr
>
> ("tijluilenspiegel") wrote:
>
snip>
>
> Apart of Wicksell's example, I've known several people that bought a
>
> building at low price, waited that the State had built streets and
>
> services all around it and then had sold the same building (no embedded
>
> labour was physically added to it) at (very) higer price.
>
>
>
> Of course, if we look at the entire district instead of looking only at
>
> that building, we could say that some physical works have been made. So
>
> the entire district - but not only that building - still seems to
>
> respect LTV.

Well as far as I can see their is no direct correspondence between
the price of the ground and the quantity of work embodied in it.
The value in terms of price of the ground only(or mostly) result from the
monopoly situation of it's owner, that allows him to "
realize
"the money assessment" that means the taxation of those that need to rent
the ground .
But the real origin of the value that is obtained(under the form of
money) is the work of those who rent the ground or the buildings on the
ground or those who were exploited by the rent payers

>snip

There are differences between book 1 and 3 of the capital
and one of those is that Marx did not accept Ricardo's strict relationship
between LV and prices and that he gave a larger place to imperfections in
competition.
I really can prove that Marx accepted the Ricardian idea that
LTV is only valid for reproductable goods, it would take a long study to
prove what seems an evidence .

Most of the time when Marx did not agree with Ricardo , Smith or other
economist he said it clearly.

I didn't found any thing going in this direction but , you know, he wrote a
lot-))

regards

From:	Loràn
Subject:	Re: Value as product of human labour...
Date:	Mon, 17 Jan 2005 20:48:14 CST

On Fri, 14 Jan 2005 10:56:09 CST, tijluilenspiegel@club-internet.fr
("tijluilenspiegel") wrote:

> The value in terms of price of the ground only(or mostly) result from the
> monopoly situation of it's owner ...

Ok, also that Wicksell's example is demystified. :-)
I'm sorry I hadn't understood you before.

> I really can prove that Marx accepted the Ricardian idea that
> LTV is only valid for reproductable goods, it would take a long study to
> prove what seems an evidence .

I'd say that LTV's [the only existing theory] valid to explain permanent
prices variations of reproductables goods. All along vol I, Marx doesn't
introduce any other form of market rather than free-market. If we - or
Wicksell - talk about a piece of land, we are assuming that we are not
dealing with a "typical free-market commodity". I've noticed that, for
each example marginalists made to confute LTV, they weren't dealing with
this kind of commodities/weren't dealing with a free-market at all.

Their malicious intents make me trust Marx was too much right. :-)

Thanks!
L.

From:	tijluilenspiegel
Subject:	Re: Value as product of human labour...
Date:	Tue, 18 Jan 2005 00:00:11 CST

""Loràn"" a écrit dans le message de
news:mdlnu013qbejeeqa3gf1k14rcogufncqje@4ax.com...
> On Fri, 14 Jan 2005 10:56:09 CST, tijluilenspiegel@club-internet.fr
> ("tijluilenspiegel") wrote:
>
> > The value in terms of price of the ground only(or mostly) result from
the
> > monopoly situation of it's owner ...
>
> Ok, also that Wicksell's example is demystified. :-)
> I'm sorry I hadn't understood you before.
>
> > I really can prove that Marx accepted the Ricardian idea that
> > LTV is only valid for reproductable goods, it would take a long study to
> > prove what seems an evidence .
>
> I'd say that LTV's [the only existing theory] valid to explain permanent
> prices variations of reproductables goods. All along vol I, Marx doesn't
> introduce any other form of market rather than free-market.

Basicly book 1 is the theory(a model we would say to day)
Book 3(and 2 perhaps) is the application of the model to reality, and
people who have any pratice of capitalism know that non perfect comptition
situations are the majority and perfect and free competition an exception.

Even if that doesn't please the neoclassical economists who like complete
and pure compétion easeer to modelize by mathematics-))
Regards

snip

From:	Loràn
Subject:	Re: Value as product of human labour...
Date:	Fri, 14 Jan 2005 02:47:59 CST

On Wed, 12 Jan 2005 10:53:30 CST, "Ron Peterson"

wrote:

> Society can ascribe ownership to land, but it's qualitatively different

> from commodities since it can't be moved.

Ricardo («On The Principles of Political Economy and Taxation», 1821)

says that LTV can explain «the exchangeable value of all things,

excepting those which cannot be increased by human industry». And that

«There are some commodities, the value of which is determined by their

scarcity alone» - "tijluilenspiegel" has just quoted the kind of

commodities Ricardo is referring to.

«These commodities, however» - Ricardo goes on - «form a very small part

of the mass of commodities daily exchanged in the market. By far the

greatest part of those goods which are the objects of desire, are

procured by labour, and they may be multiplied».

If I recall correctly, Marx did not mention these commodities in Capital

vol I. Neither I remember he did made any distinction between

commodities which can or cannot «be increased by human industry» as

Ricardo says. But I did read its first chapters too many months ago, so

I could be wrong.

According to Marx, is LTV valid as it was according to Ricardo - that

is: isn't LTV valid to explain a rare picture value? Nowadays, how big

is the part of commodities which are not «procured by labour»?

> In a capitalist economy, the market value will depend on how much the

> site lowers the cost of production and the prevailing return on

> investment.

Do you mean with "market value", the price of that area? or its exchange

value? By the way, as I already said you, Marx in vol I says that

exchange value is related to the labour embodied - that is equal to 0 -

in that area, and that prices are only the semblances of exchange values

in the market: that area should be free of charge? :-)

According to Ricardo, that area shouldn't be regulated by labour time.

> > However, I think that changing Marx's LTV in this way - by adding

> > that embodied labour contains also this kind of "potential labour" -

> > would not wreck it. Well, probably I'm wrong and it's already contained

> > in it.

> I don't think that it's desirable to try to identify use-value with

> labor-time-value since they are different concepts.

I think I'm not doing that.

I said that exchange value should be related to the labour necessary to

_obtain_ an equal commodity and not (only) to the labour embodied in it.

According this "new definition" (?) of LTV, the value of that area could

be mathematical approximated by the labour necessary to pull down a

same-size area next to the empty area.

This won't be the exact value of that area, but if we do an average

between all the areas next to the empty area, we could approximate its

value - we have to suppose that this empty area isn't a particular one;

id est, there is a oil-well upon it! ;-)

Maybe we could take as value the _minimal_ labour necessary between all

the possibilities: let's imagine prices are objectified labour times; so

we should buy an area next to the empty area and pull down all the thing

there are upon it. We could consider to buy - mmm maybe there is no need

to consider this purchase - the area at minimal price between all the

areas there are all around the empty area.

So the value of the empty area would be equal to objectified labour time

contained in that price + labour time to pull down what we have just

found upon it.

I think all this could be not coherent with Marx's LTV. :(

Maybe I'll try to see if reality reflects something. :-)

> For instance, a doughnut company may produce doghnuts and doughnut

> holes but their is no way to allocate the labor-time between those two

> products.

Hadn't exchange value nothing to do with physical properties? :-) So

there's no need to allocate the labor-time between those "two" products.

Thanks!

L.

From:	Ron Peterson
Subject:	Re: Value as product of human labour...
Date:	Fri, 14 Jan 2005 08:56:22 CST

"Loràn" wrote:
> On Wed, 12 Jan 2005 10:53:30 CST, "Ron Peterson"

> wrote:

> > Society can ascribe ownership to land, but it's qualitatively
different
> > from commodities since it can't be moved.

> Ricardo («On The Principles of Political Economy and Taxation»,
1821)
> says that LTV can explain «the exchangeable value of all things,
> excepting those which cannot be increased by human industry». And
that
> «There are some commodities, the value of which is determined by
their
> scarcity alone» - "tijluilenspiegel" has just quoted the kind of
> commodities Ricardo is referring to.

For a commodity to have exchange value it must have a use value or in
some respect be desired. Scarcity alone isn't enough to establish an
exchange value because there are plenty of things that are scarce.

> «These commodities, however» - Ricardo goes on - «form a very
small part
> of the mass of commodities daily exchanged in the market. By far the
> greatest part of those goods which are the objects of desire, are
> procured by labour, and they may be multiplied».

> If I recall correctly, Marx did not mention these commodities in
Capital
> vol I. Neither I remember he did made any distinction between
> commodities which can or cannot «be increased by human industry» as
> Ricardo says. But I did read its first chapters too many months ago,
so
> I could be wrong.

> According to Marx, is LTV valid as it was according to Ricardo - that
> is: isn't LTV valid to explain a rare picture value? Nowadays, how
big
> is the part of commodities which are not «procured by labour»?

The value has to be relative to the desires of consumer. If I can't
tell the difference between an original oil painting and a forgery, why
should I want to pay more for the original? The LTV establishes a
minimum for the exchange value since if the sales are inadequate to pay
the employees, nobody will manufacture the commodity.

> > In a capitalist economy, the market value will depend on how much
the
> > site lowers the cost of production and the prevailing return on
> > investment.

> Do you mean with "market value", the price of that area? or its
exchange
> value? By the way, as I already said you, Marx in vol I says that
> exchange value is related to the labour embodied - that is equal to 0
-
> in that area, and that prices are only the semblances of exchange
values
> in the market: that area should be free of charge? :-)

Yes, I think that market value, price, and exchange value are
equivalent as far as this discussion is concerned.

"Embodied labor" only sets a minimum for the exchange value of a
commodity.

> > I don't think that it's desirable to try to identify use-value with
> > labor-time-value since they are different concepts.

> I think I'm not doing that.
> I said that exchange value should be related to the labour necessary
to
> _obtain_ an equal commodity and not (only) to the labour embodied in
it.

> According this "new definition" (?) of LTV, the value of that area
could
> be mathematical approximated by the labour necessary to pull down a
> same-size area next to the empty area.

The purpose of Marx's LTV was to get something that was mathematically
tractable and identifiable with an economic model consisting of
workers, capitalists, and manufacturing plants. If a labor-time value
is identified with a piece of land that in fact consumed no labor-time
than the equations break down.

--
Ron

From:	Loràn
Subject:	Re: Value as product of human labour...
Date:	Mon, 17 Jan 2005 20:49:17 CST

On Fri, 14 Jan 2005 08:56:22 CST, "Ron Peterson"
wrote:

> The LTV establishes a minimum for the exchange value since if the sales are
> inadequate to pay the employees, nobody will manufacture the commodity.
> ...
> "Embodied labor" only sets a minimum for the exchange value of a
> commodity.

I don't know if this is a Marx's statement he made in vol III, but in
vol I he clearly says that embedded/emboided/objectified labor time is
_equal_ to exchange value. He describes an hypothetic free-market into
which prices on long term are equal(*) to exchange value. In these
conditions - prices equal to embedded labor time - he proves that, in a
capitalist society, selling commodities at their exchange value will
give a profit to the capitalist. IIRC, he never talk about any minimun
for the exchange value.

(*) I know that in vol III he says that this is not really true. But
this is the so-called "transformation (of values in prices) problem".

> The purpose of Marx's LTV was to get something that was mathematically
> tractable and identifiable with an economic model consisting of
> workers, capitalists, and manufacturing plants.

But this implies that the source of value is explained by referring to a
capitalist mode of production. Somewhere (I'd search if you asked it to
me) in vol IV ("Theories of Surplus Value") Marx says that the source of
value has to be searched for without supposing anything more than goods.

> If a labor-time value is identified with a piece of land that in fact
> consumed no labor-time than the equations break down.

According to Marx's LTV, that piece of land has a value equal to zero.
But its price is different than zero because, as "tijluilenspiegel" has
just said, this is not a free-market situation, and then that price will
«result from the monopoly situation of it's owner».

I don't know how did I forget that (long term) prices and values are
equal only for free-market situation! :-(

By the way, one could ask why the price of that piece of land is exactly
that one and not another one. This is explainable only by looking at its
social use-value: that is, looking at the supply and demand law.

In conclusion, according to me the *value* of a commodity is given by
embedded social labor time contained in it, while *prices* depend, prima
facie, by that value and, secondly, by the supply and demand law.

IIRC, when Marx talks about transformation of values into prices, he
says something like that. In fact he says that a variation in productive
power of labor is the most important event which permanently changes
prices of commodities (and the only one which explains these changes).
[he is supposing, like Ricardo did, an average profit rate on the long
run; that is, according to me, the result of the supply and demand law]

The problem is that his value and surplus value are explained upon the
assumption that exchange value are equal to prices. :-(

Have I correctly reasoned till now?

Thank you for your help!
L.

From:	Alexander Recht
Subject:	Re: Value as product of human labour...
Date:	Tue, 18 Jan 2005 15:25:35 CST

Loràn wrote:

> In conclusion, according to me the *value* of a commodity is given by
> embedded social labor time contained in it, while *prices* depend,
> prima facie, by that value and, secondly, by the supply and demand
> law.

No, I do not agree with your substantialistic view of value. Value is
only created in the EXCHANGE of two commodities. Imho, it would be wrong
to say that value is given by "embedded social labor CONTAINED in it",
because this would imply that even without exchange, a commodity would
have value. But Marx did insist on the relevance of exchange:

"Die Reduction der verschiednen konkreten Privatarbeiten auf dieses
Abstractum gleicher menschlicher Arbeit vollzieht sich nur durch den
Austausch, welcher Producte verchiedner Arbeiten thatsächlich einander
gleichsetzt." (MEGA II.6, p. 41)

In English: "The reduction of different useful labors to this abstractum
of equal human labour only comes about through the exchange which
equates products of different useful labours." (MEGA II.6, p. 41,
translation: Alex Recht)

>From this follows that I do not agree with your use of the notions
"value" and "price". The value of a commoditiy MUST be expressed in the
social form of money, i.e. as a price:

"The expression of the value of a commodity in gold — x commodity A = y
money-commodity — is its money-form or price." (Marx, Karl: Capital I,
www.marxists.org/archive/marx/works/1867-c1/ch03.htm#S1)

Besides, I do not think that the value is only a static and price a
dynamic element. As value is not created in the sphere of production but
needs to be realized in the sphere of exchange after it hat been
"produced" in the sphere of production, value can also change and in
fact changes. There are three so called reductions of different useful
labors to the abstractum of equal human labour:

Imagine, the average productivity increases. Then, the value per
commodity (of course expressed as a price) decreases. Imagine, there is
an enterprise which does not increase its productivity to the extent of
the society. Although the same amount of embedded social labor time is
contained in the commodity, the value decreases. This is the FIRST
REDUCTION:

"We see then that that which determines the magnitude of the vaue of any
article is the amount of labour socially necessary, or the labour-time
socially necessary for its production." (Marx, Karl: Capital I,
www.marxists.org/archive/marx/works/1867-c1/ch01.htm#S1)

Imagine now, the social demand is lower than the social supply of a
commodity. Then again, like in the case of increasing productivity, the
value per commodity (of course expressed as a price) decreases. I
repeat: Although the same amount of embedded social labor time is
contained in the commodity, the value decreases. This is the SECOND
REDUCTION:

"Lastly, suppose that every piece of linen in the market contains no
more labour-time than is socially necessary. In spite of this, all these
pieces taken as a whole, may have had superfluous labour-time spent upon
them. If the market cannot stomach the whole quantity at the normal
price of 2 shillings a yard, this proves that too great a portion of the
total labour of the community has been expended in the form of weaving.
The effect is the same as if each individual weaver had expended more
labour-time upon his particular product than is socially necessary. Here
we may say, with the German proverb: caught together, hung together. All
the linen in the market counts but as one article of commerce, of which
each piece is only an aliquot part. And as a matter of fact, the value
also of each single yard is but the materialised form of the same
definite and socially fixed quantity of homogeneous human labour. (Marx,
Karl: Capital I,
www.marxists.org/archive/marx/works/1867-c1/ch03.htm#S1)

Imagine at last, the amount of embedded social labor time which is
contained in the commodity stays the same but gets less complicated -
e.g. as a consequence of mass production. Nevertheless, the value per
commodity (of course expressed as a price) decreases again. This is the
THIRD REDUCTION:

"Skilled labour counts only as simple labour intensified, or rather, as
multiplied simple labour, a given quantity of skilled being considered
equal to a greater quantity of simple labour. Experience shows that this
reduction is constantly being made. A commodity may be the product of
the most skilled labour, but its value, by equating it to the product of
simple unskilled labour, represents a definite quantity of the latter
labour alone. The different proportions in which different sorts of
labour are reduced to unskilled labour as their standard. are
established by a social process that goes on behind the backs of the
producer (...)" (Marx, Karl: Capital I,
www.marxists.org/archive/marx/works/1867-c1/ch01.htm#S1)

In all these three reductions, the value of a commodity CAN change even
if the "embedded social labor CONTAINED in it" stays the same. But
indeed, the point you focus on is the difference between MARKET-value
and MARKET-price. This question is first raised in Capital III which
deals with the apparent and visible surface of the economic process. The
sequence is: value expressed as a price - production price -
market-value - market-price.

First of all: Value is expressed as a price. Yet because of competition,
value is transformed and then expressed as a price of production. The
transformation works as follows: "Hence, the price of production of a
commodity is equal to its cost-price plus the profit, allotted to it in
per cent, in accordance with the general rate of profit, or, in other
words, to its cost - price plus the average profit." (Marx, Karl:
Capital III, www.marxists.org/archive/marx/works/1894-c3/ch09.htm)

As a consequence, the rates of profit are equalized in the different
spheres. From this also follows that the individual profit is different
from the individual surplus value. If the individual organic composition
of capital is higher than the social one, the individual profit is
higher than the individual surplus value, et vice versa.

The average production price represents the market-value: "(...)
market-value is to be viewed as the average value of commodities
produced in a single sphere, and, on the other, as the individual value
of the commodities produced under average conditions of their respective
sphere and forming the bulk of the products of that sphere. (...) What
has been said here of market-value applies to the price of production as
soon as it takes the place of market-value." (Marx, Karl: Capital III,
www.marxists.org/archive/marx/works/1894-c3/ch10.htm)

Finally, we come to your point, Loràn: There is an everyday change of
supply and demand. This everyday change is the basis of the difference
between market-value and market-price:

"Hence, if supply and demand regulate the market-price, or rather the
deviations of the market-price from the market-value, then, in turn, the
market-value regulates the ratio of supply to demand, or the centre
round which fluctuations of supply and demand cause market-prices to
oscillate." (Marx, Karl: Capital III,
www.marxists.org/archive/marx/works/1894-c3/ch10.htm)

Greetings,
Alex

From:	wilfred
Subject:	Re: Value as product of human labour...
Date:	Tue, 18 Jan 2005 21:30:50 CST

""Alexander Recht"" wrote in message
news:354khbF4i1c93U1@individual.net...
> Loràn wrote:
>
> > In conclusion, according to me the *value* of a commodity is given by
> > embedded social labor time contained in it, while *prices* depend,
> > prima facie, by that value and, secondly, by the supply and demand
> > law.
>
> No, I do not agree with your substantialistic view of value. Value is
> only created in the EXCHANGE of two commodities. Imho, it would be wrong
> to say that value is given by "embedded social labor CONTAINED in it",
> because this would imply that even without exchange, a commodity would
> have value. But Marx did insist on the relevance of exchange:

I've commented on Marx's view of the relevance of exchange later. On value
as 'created by exchange'.....

Were value to be created in the exchange of commodities, value ought to be
able to be created without production, merely by swapping around the
existing stock of commodities. Marx himself noted the absurdity of this -
"the capitalist class as a whole cannot defraud itself". -
http://www.marxists.org/archive/marx/works/1861/economic/ch12.htm. What you
presumably mean is that value is arbitrated in the final instance by
utility. Marx would agree, in that the ultimate source for exchange value is
use-value. However, the ratio by which commodities are exchanged is an
*objective* amount reflected in the market price which is given by the
*subjective* utility functions of market participants.

I think what Marx means in the passage you outline is that markets are
neccesary in the sense that they provide the impetus for prices to converge
to labour values. Without exchange, prices would not correspond to labour
values. This doesn't mean that value is 'created' in exchange any more than
my gearbox 'creates' the forward motion in my car. The gearbox is neccesary,
but it is the combination of many components that gets it going.

> "The expression of the value of a commodity in gold - x commodity A = y
> money-commodity - is its money-form or price." (Marx, Karl: Capital I,
> www.marxists.org/archive/marx/works/1867-c1/ch03.htm#S1)
>
> Besides, I do not think that the value is only a static and price a
> dynamic element. As value is not created in the sphere of production but
> needs to be realized in the sphere of exchange after it hat been
> "produced" in the sphere of production, value can also change and in
> fact changes. There are three so called reductions of different useful
> labors to the abstractum of equal human labour:

Because value is 'realised' doesn't mean it changes. It means that the value
can be 'got at' via selling. Without the opportunity of exchange, prices are
meaningless, but equally, a system of pure exchange would not create any new
value - spheres of both production and exchange are neccesary. Hence both
spheres are where value is 'created' - a point which Marx makes in the first
part of Capital vol 1

> Imagine, the average productivity increases. Then, the value per
> commodity (of course expressed as a price) decreases.

Maybe in nominal terms. But not in terms of socially neccesary labour
productivity gains could well would be eaten up in a higher real wage, which
would become the new (socially determined) level of subsistence.

> Imagine, there is
> an enterprise which does not increase its productivity to the extent of
> the society. Although the same amount of embedded social labor time is
> contained in the commodity, the value decreases. This is the FIRST
> REDUCTION:

But the whole definition of 'social labour time' is that it is an average of
the time taken to produce a given commodity. So if there is one enterprise
which uses old methods, then socially neccesary labour time still goes down.
In time, this enterprise will go out of business, forced out by the usual
market methods by more efficient and productive firms. And everyone comes to
use the better method.

> "We see then that that which determines the magnitude of the vaue of any
> article is the amount of labour socially necessary, or the labour-time
> socially necessary for its production." (Marx, Karl: Capital I,
> www.marxists.org/archive/marx/works/1867-c1/ch01.htm#S1)
>
> Imagine now, the social demand is lower than the social supply of a
> commodity. Then again, like in the case of increasing productivity, the
> value per commodity (of course expressed as a price) decreases. I
> repeat: Although the same amount of embedded social labor time is
> contained in the commodity, the value decreases. This is the SECOND
> REDUCTION:

A exogenous drop in demand would mean that the price would fall. However,
the time taken to produce the commodity is the same. UNTIL capitalists
transfer capital out of the market which has suffered a fall in price (as it
earns more profit/returns elsewhere). At which point, the amount of labour
time required to produce the commodity rises due to the fall in available
capital. Eventually, prices tend towards labour values.

> "Lastly, suppose that every piece of linen in the market contains no
> more labour-time than is socially necessary. In spite of this, all these
> pieces taken as a whole, may have had superfluous labour-time spent upon
> them. If the market cannot stomach the whole quantity at the normal
> price of 2 shillings a yard, this proves that too great a portion of the
> total labour of the community has been expended in the form of weaving.
> The effect is the same as if each individual weaver had expended more
> labour-time upon his particular product than is socially necessary. Here
> we may say, with the German proverb: caught together, hung together. All
> the linen in the market counts but as one article of commerce, of which
> each piece is only an aliquot part. And as a matter of fact, the value
> also of each single yard is but the materialised form of the same
> definite and socially fixed quantity of homogeneous human labour. (Marx,
> Karl: Capital I,
> www.marxists.org/archive/marx/works/1867-c1/ch03.htm#S1)

The nominal price can vary. The real value (or even real price, given a fast
enough acting capitalism) does not, given the 'reductions' above, which
assume a fast . Marx's reductions are the case for when markets work almost
instananeously and work perfectly in the neoclassical sense. Even in an
imperfect market, there is a tendency towards prices to equal labour values.

From:	Alexander Recht
Subject:	Re: Value as product of human labour...
Date:	Wed, 19 Jan 2005 02:46:29 CST

"wilfred" wrote:

> ""Alexander Recht"" wrote in message
> news:354khbF4i1c93U1@individual.net...

> Were value to be created in the exchange of commodities, value ought
> to be able to be created without production, merely by swapping
> around the existing stock of commodities. Marx himself noted the
> absurdity of this - "the capitalist class as a whole cannot defraud
> itself". -
> http://www.marxists.org/archive/marx/works/1861/economic/ch12.htm.
> What you presumably mean is that value is arbitrated in the final
> instance by utility. Marx would agree, in that the ultimate source
> for exchange value is use-value. However, the ratio by which
> commodities are exchanged is an
> *objective* amount reflected in the market price which is given by the
> *subjective* utility functions of market participants.
>
> I think what Marx means in the passage you outline is that markets are
> neccesary in the sense that they provide the impetus for prices to
> converge to labour values. Without exchange, prices would not
> correspond to labour values.

Maybe, I did not write exactly anough. What I meant to say is: Exchange
value of a commoditiy depends on two conditions to be fulfilled: 1)
"(...) the value of a commodity is determined by the quantity of labour
spent on it (...). (Marx, Karl: Capital I) The traditional
interpretation only deals with this aspect: The quantity of labour spent
on producing a commodity determines its value. In this sense, labour
forms indeed the substance of value.

2) But there is a second condition which has to be fulfilled. Marx
wrote: "The labour, however, that forms the substance of value, is
homogeneous human labour, expenditure of one uniform labour-power." In
this sense, labour indees forms the substance of value, but it is
expenditure of one UNIFORM labour-power. However, the individual
expenditure of labour-power is always different and not uniform. Thus,
the question how much labour counts can only be answered at the market.
Only at the public sphere of the market, the individual expenditure of
labour-power can prove to be socially necessary.

"The labour-time socially necessary is that required to produce an
article under the normal conditions of production, and with the average
degree of skill and intensity prevalent at the time." How can this
question be answered without the market??? Thus, value, that is exchange
value, expressed in the form of money as a price, is "created" by
production and exchange as well. Without production, no value. And
without exchange, no value. Therefore, I would object to the
classification of the labour theory of value as an objective theory of
value.

Just one further comment: Everything Marx writes in "Capital I" has to
be understood at a rather abstract analysis. In capitalism however,
there is capital, accumulation and more or less competition. This means
that in capitalism, (exchange) value is no more expressed as simple
price - as described in "Capital I" - but is expressed as market-price
which is the result of the supply with its average price of production
(market-value) and the demand.

>From this follows that in capitalism, according to Marx, even with
exchange, prices do not "converge to labour values" (wilfred). Rather,
market-prices converge to the market-value as the average price of
production.

Best regards, Alex Recht

From:	wilfred
Subject:	Re: Value as product of human labour...
Date:	Fri, 21 Jan 2005 22:44:51 CST

""Alexander Recht"" wrote in message
news:355se8F4i4akpU1@individual.net...
> "wilfred" wrote:
>
> > ""Alexander Recht"" wrote in message
> > news:354khbF4i1c93U1@individual.net...

> 2) But there is a second condition which has to be fulfilled. Marx
> wrote: "The labour, however, that forms the substance of value, is
> homogeneous human labour, expenditure of one uniform labour-power." In
> this sense, labour indees forms the substance of value, but it is
> expenditure of one UNIFORM labour-power. However, the individual
> expenditure of labour-power is always different and not uniform. Thus,
> the question how much labour counts can only be answered at the market.
> Only at the public sphere of the market, the individual expenditure of
> labour-power can prove to be socially necessary.

I think that what Marx means is that value is counted in uniform labour
value, but of course the actual labour which is done on the commodity will
differ, as you say. I think your question is "what, apart from markets, will
reveal what the value of abstract, socially neccesary labour is?".

I agree..... :) However, revelation is not the same as existence of the
value. The commodity will still presumably have value if socially neccesary
labour is contained in it. The level of productive capacity of the economy
determines the value of the labour. Goods produced under a feudal system,
for instance, will have socially-neccesary value, even if they are produced
for subsistence or payment in kind, and never see the market.

> "The labour-time socially necessary is that required to produce an
> article under the normal conditions of production, and with the average
> degree of skill and intensity prevalent at the time." How can this
> question be answered without the market??? Thus, value, that is exchange
> value, expressed in the form of money as a price, is "created" by
> production and exchange as well. Without production, no value. And
> without exchange, no value.

I don't think so. value is there, but we don't know what the level of the
value is. I don't know what the value of my coffee cup is, unless I try to
sell it, but it still contains a value.

From:	Ron Peterson
Subject:	Re: Value as product of human labour...
Date:	Sat, 8 Jan 2005 23:39:03 CST

"Loràn" wrote:

> There is just one question he does that I would you take a look at,
> because it maybe is the only one worth speaking of. While criticizing
> LTV, he says [it's a my - id est, wrong :-) - on-the-fly
translation]:

> «A manufacturable area* in the center of a populous town has, as
anybody
> knows, a very high value: is also this value a product of human
labour?»

> * I mean an [empty] area where one can edify upon. I hope I have
chosen
> the right term: though I think it's wrong, my Babylon dictionaries
> hadn't found any better term. :-(

Land isn't strictly a commodity, but Marx addressed its value in
relation in how it is more useful than marginally productive land. Land
that can produce a 100 bushels/acre of corn a year is more valuable
than one that can produce 90 bushels/acre of corn a year. Proximitiy to
markets and a labor force also makes land more valuable. Land in a city
area can be gained by tearing down existing buildings so there is a
labor content to its value.

Marx distinguishes between labor-time value, exchange value, and use
value.

--
Ron

From:	Loràn
Subject:	Re: Value as product of human labour...
Date:	Wed, 12 Jan 2005 02:15:44 CST

On Sat, 8 Jan 2005 23:39:03 CST, "Ron Peterson"
wrote:

> > «A manufacturable area* in the center of a populous town has, as anybody
> > knows, a very high value: is also this value a product of human labour?»
> ...
> Land isn't strictly a commodity,

If one would search for the essence of value, I think it has to deal
with all the exchangeable things. Or not? Land is exchangeable.

> but Marx addressed its value in
> relation in how it is more useful than marginally productive land. Land
> that can produce a 100 bushels/acre of corn a year is more valuable
> than one that can produce 90 bushels/acre of corn a year.

I think that Wickseel did not mean properly a "land" intended as "rural
ground", but just only an empty - we could assume it asphalted - area.
*Price* of this area seems to be not equal to the labour embodied in it
- that is about zero, if it'd be asphalted. So its value would be about
0 but its price would be very high. Due to its scarcity.

> Proximitiy to markets and a labor force also makes land more valuable.
> Land in a city area can be gained by tearing down existing buildings so
> there is a labor content to its value.

This is similar to the solution I thought.
And there is the same problem: this is not *embodied* labour, because we
are assuming that no-one has ever worked on that area.
It could be just... how can I say it? mmm "potential labour".

However, I think that changing Marx's LTV in this way - by adding that
embodied labour contains also this kind of "potential labour" - would
not wreck it. Well, probably I'm wrong and it's already contained in it.

> Marx distinguishes between labor-time value, exchange value, and use
> value.

And average price, cost price and so on. :-)
I've read Kapital vol I and Marx supposes that commodities are exchanged
at their labor-time value, that's called "exchange value". He builds his
value and surplus value theories upon the assumption that value is
social labor-time embodied in the commodity.

Thanks!
L.

From:	Ron Peterson
Subject:	Re: Value as product of human labour...
Date:	Mon, 17 Jan 2005 19:01:42 CST

"Loràn" wrote:

> In conclusion, according to me the *value* of a commodity is given by
> embedded social labor time contained in it, while *prices* depend,
prima
> facie, by that value and, secondly, by the supply and demand law.

But, what happens when a commodity can be produced by half the price
because of new technology? Does the earlier produced commodity still
have its original "embedded" value?

> IIRC, when Marx talks about transformation of values into prices, he
> says something like that. In fact he says that a variation in
productive
> power of labor is the most important event which permanently changes
> prices of commodities (and the only one which explains these
changes).
> [he is supposing, like Ricardo did, an average profit rate on the
long
> run; that is, according to me, the result of the supply and demand
law]

Doesn't competition cause the average rate of profit drop over time?

> The problem is that his value and surplus value are explained upon
the
> assumption that exchange value are equal to prices. :-(

I think that one has to base that on the aggregate of all commodities
produced.
Some will sell below their labor-time equivalent and some will sell for
more, but
on the average, they will balance out.

--
Ron

From:	wilfred
Subject:	Re: Value as product of human labour...
Date:	Tue, 18 Jan 2005 21:31:51 CST

"Ron Peterson" wrote in message
news:1106010024.743706.91910@f14g2000cwb.googlegroups.com...
>
> "Loràn" wrote:
>
> > In conclusion, according to me the *value* of a commodity is given by
> > embedded social labor time contained in it, while *prices* depend,
> prima
> > facie, by that value and, secondly, by the supply and demand law.
>
> But, what happens when a commodity can be produced by half the price
> because of new technology? Does the earlier produced commodity still
> have its original "embedded" value?

According to Marx, no, as we're talking about socially neccesary labour
time, which is reduced by technological progress (as you should well know,
Ron, you sophist, you :) )

I think Marx applies a mix of the labour 'embodied' and labour 'commanded'
definitions of how labour related to value. I always thought that (in Cap
1), Marx follows the assumptions of perfect competition (in the neoclassical
sense) in order to establish that exploitation carries on under perfect
competition. Labour 'embodied' would equal labour 'commanded'. In other
words, he assumed that the effects on labour 'embodied' value of
technological progress would be overridden by the effects of markets
(including the labour market) in quickly rejigging prices, labour supply etc
to the point where prices equalised labour embodied and commanded.

Classical Economists (of which Marx was a heretical member) tended to
explain short run fluctuations in prices as supply and demand, but noted
that there tended to be a price which the fluctuations fluctuated *around*,
and tried to express this in other ways. Even were we to accept that in the
long run, prices are determined by D+S, we have to accept that goods will
not be sold for less than their cost of production, and market pressures
will tend to damp down prices towards the cost of production. Thus we have
an explanation for why prices have boundaries and a tendancy to fluctuate
around a 'natural price', for want of a better phrase, independant of D+S
considerations.

> > IIRC, when Marx talks about transformation of values into prices, he
> > says something like that. In fact he says that a variation in
> productive
> > power of labor is the most important event which permanently changes
> > prices of commodities (and the only one which explains these
> changes).
> > [he is supposing, like Ricardo did, an average profit rate on the
> long
> > run; that is, according to me, the result of the supply and demand
> law]
>
> Doesn't competition cause the average rate of profit drop over time?

Competition plus increasing amounts of capital used in production. It will
drop until profit rates are zero, baring the now famous 'countervailing
forces', at which point, commodity prices will converge with labour time,
though labour power will still be paid for at less than the value of its
labour, as capitalists control the means of production, have greater market
power than labour sellers, etc.

> > The problem is that his value and surplus value are explained upon
> the
> > assumption that exchange value are equal to prices. :-(
>
> I think that one has to base that on the aggregate of all commodities
> produced.
> Some will sell below their labor-time equivalent and some will sell for
> more, but
> on the average, they will balance out.

Or, the perfectly competative market creates an outcome where commodity
prices tend towards their labour time equivalent (excepting labour power
itself).