A few questions regarding economics

[ALB]

Here's some notes Marx once made on the difference between the German words for "value" and "worth". Not sure that we need to go into that much detail though 

Quote:

The only thing which clearly lies at the bottom of the German stupidity is the fact that linguistically the words value [Wert] or worth [Würde] were first applied to the useful things themselves, which existed for a long time, even as “products of labour,” before becoming commodities.  But this has as little to do with the scientific determination of the “value” of the commodity as the fact that the word salt was first used by the ancients for cooking salt, and consequently sugar, etc. also figure as varieties of salt from Pliny onwards (indeed, all colourless solids soluble in water and with a peculiar taste), and therefore the chemical category “salt” includes sugar, etc.As the commodity is bought by the purchaser not because it has value but because it is a “use-value,” and is used for definite purposes, it goes without saying that 1. use-values are “assessed,” i.e. their quality is investigated (just as their quantity is weighed, measured, etc.); 2. if different sorts of commodities can be substituted for one another for the same use, one or the other will be given preference, etc., etc.In Gothic there is only one word for Wert and Würde: vairths, τιμη, //τιμαω, assess, i.e. evaluate; to determine the price or value, to rate; metaphorically: to appreciate, esteem, honour, distinguish.  Τιμη—assessment, hence: determination of value or price, evaluation, valuation. Then: estimation, also, value, price itself (Herodotus, Plato), αι τιμα—expenses in Demosthenes.  Then: estimation, honour, respect, place of honour, honorary post, etc., Rost's Greek-German Dictionary.(….)Furthermore it should be noted that—even in this linguistic connection—if it follows automatically, as if by the nature of the thing, from the original identity of Würde and Wert that this word also referred to things, products of labour in their natural form—it was later directly applied unchanged to prices, i.e. value in its developed value-form, i.e. exchange-value, which has so little to do with the matter that the same word continued to be used for worth in general, for honorary offices, etc. Thus, linguistically speaking, there is no distinction here between use-value and value.

I think, YMS, that the Anglo-Saxon word is: veordh, vurdh. The English word value must come from French.

[DJP]

Young Master Smeet wrote:

Quite right, but we still have a notion of worth behind the price, so, yes, price and value will (usually) not be equal: if you buy a rolls royce for a penny you know that someone has undervalue it (or you have overvalued a crock). [/quote]Sure, but when we use the word "value" in this way I don't think we're using to mean the same thing as we do when we talk about "value" in the context of Marxian economics. As I'm sure you'd agree.

[Young Master Smeet]

DJP wrote:

Sure, but when we use the word "value" in this way I don't think we're using to mean the same thing as we do when we talk about "value" in the context of Marxian economics. As I'm sure you'd agree.

Well, I was using value in the context of Marxian economics, and using the examples of rip-off and bargain to explain the difference between value and price.  The value is there, even if the person making the contract isn't consciously aware of it.

[DJP]

Young Master Smeet wrote:

Well, I was using value in the context of Marxian economics, and using the examples of rip-off and bargain to explain the difference between value and price.  The value is there, even if the person making the contract isn't consciously aware of it.

The mistake is to think that "value" in Marx is something like "natural price", or that the price of individual commodities is determined by the amount of labour time necessary to produce them. It's only in the aggregate, the totals across the whole economy, that "price" and "value" are equal.If you were making this mistake I don't know..

[Anonymous]

http://www.worldsocialism.org/spgb/education/study-guides/guide-value-price-and-profit   This is a very good explanation about the concept of value , price and profits

[DJP]

mcolome1 wrote:

This is a very good explanation about the concept of value , price and profits

It doesn't cover the transformation of values to prices though… I'm not sure if Marx had fully formulated this at the time when "Value, Price and Profit" was written.

[Dave B]

Ok The value of something is the amount of human effort that has been expended to produce it; for convenience measured in labour time. At this point whether you accept that or not or whatever it is a definition, predicate, premise blah blah. What you can’t or shouldn’t do, or if you do you get yourself in a mess is start with a definition, predicate, premise blah blah and start messing around with it later on. So then if idealistically, from a formal logical proposition etc; if the (‘substance’) of the value of something is the amount of human effort that has been expended to produce it then; in feudalism, simple commodity production, capitalism, communism and Robinson Crusoe on his non social Island of one, things that are produced have value. Karl and Marx also said they did, and would, and had. This is hard for some of us, particularly value in communism; Fred covered that part of it in Ante Durhring, under socialism theoretical. And I think it is illustrative of the conceptual problem. In my communism I want the amount of human effort required to make everything, it’s value, in the free access store recorded and displayed on the label. [Just like you get nutritional information you get on food products. Which, as part of my game, is notoriously systematically inaccurate and is in fact only a guideline.] Why? Because I don’t want to be consuming gold toilet seats which whilst, it might not be a problem now for me now because I can’t afford them. Could otherwise become a problem for third generation socialists who don’t have our helpful market price system to give us any indication of what things are ‘worth’ or their value. You see my stupid proletarian factory farther used to tell me to look after stuff because a load of work had gone into making stuff; which for me hit home more than its price, which was all a bit confusing at the time. Anyway the scientific Greek logic? If two things are equal (In exchange value), then for whatever reason, it is because something about them is the same.

[ALB]

Dave B wrote:

So then if idealistically, from a formal logical proposition etc; if the (‘substance’) of the value of something is the amount of human effort that has been expended to produce it then; in feudalism, simple commodity production, capitalism, communism and Robinson Crusoe on his non social Island of one, things that are produced have value.Karl and Marx also said they did, and would, and had.

No they didn't. All they said was that in all societies, including socialism, wealth (something useful fashioned from materials that originally came from nature)would be the product of human work, which could be measured by time taken. But that, it was only in societies where wealth was produced for sale that products of work assumed the form of value.That's the way they defined "value". Of course we are not bound to follow their definitions and if you want to define value in your way as labour-time you are free to but not to attribute it to Marx. And you'll need to explain why products of labour have an "exchange value" in some societies but not in others.

[robbo203]

Dave B wrote:

 In my communism I want the amount of human effort required to make everything, it’s value, in the free access store recorded and displayed on the label. [Just like you get nutritional information you get on food products.  

 Dave But "value" is not the amount of human effort required to make everything, strictly speaking.  It is not actual labour time.  It is "socially necessary labour time" which is an abstraction baxsed on average levels of productivity etc . Marx argued that the only way  in which you could ascertain value is through the market and in the absence of a market economy it is a meaningless term.I really dont see the point of labour time accounting in a socialist society (not to be confused with labour vouchers which I also dont agree with).  How would you go about calculating the amount of labour time embodied in a tube of toothpaste as opposed to a bottle of hair gel? Woud you include in your calculations the labour time embodied in the machine that produced the machine that produced the machine  that produced the hair gel  by a process of infinite regress? It would seem to me to be adding another layer of unneccesary and resource-consuming bureaucracy to achieve a result of questionable validity and of dubious practical value.

[Dave B]

Capital Vol. III Part VIIRevenues and their SourcesChapter 49. Concerning the Analysis of the Process of Production   Secondly, after the abolition of the capitalist mode of production, but still retaining social production, the determination of value continues to prevail in the sense that the regulation of labour-time and the distribution of social labour among the various production groups, ultimately the book-keeping encompassing all this, become more essential than ever.  https://www.marxists.org/archive/marx/works/1894-c3/ch49.htm   OK from my perspective. I propose that Karl was using an old Greek logic analysis, that also has its place in science. It goes something like this. The generalisation If two things are equal in some way or another, then there must be something about them that is the same, identical. When two things are equal it automatically pre-supposes that they are being measured in some way or another. It is probably easier to start with the weights as an analogy; and one Karl used with his sugar loaf and block of iron. What is happening in reality is that ‘gravity’ is acting on something, a ‘substance’, in the sugar loaf and in the iron. That same identical (“third”) substance (“common to both”) is present in equal amounts in the sugar loaf and the iron. Gravity doesn’t see a sugar loaf and the iron all it recognises or acts on is the substance of mass which is identical and the same in both and present in the same amounts in both. We can’t see the (at first) baryonic matter eg the (two types) protons and neutrons in the iron and sugar but they are there and there in the same amount. If you bothered to count them up. We have moved on now to higgs bosuns. Actually this logical proposition ignores at first what the measuring device is or how it works. We can think about that later when we discover what the common substance is. So lets go back to Karl in chapter one volume 1 ……….wheat, x blacking, y silk, z gold, &c., must, as exchange values, be replaceable by each other, or equal to each other. Therefore, first: the valid exchange values of a given commodity express something equal; secondly, exchange value, generally, is only the mode of expression, the phenomenal form, of something contained in it, yet distinguishable from it.  Let us take two commodities, e.g., corn and iron. The proportions in which they are exchangeable, whatever those proportions may be, can always be represented by an equation in which a given quantity of corn is equated to some quantity of iron: e.g., 1 quarter corn = x cwt. iron. What does this equation tell us? It tells us that in two different things – in 1 quarter of corn and x cwt. of iron, there exists in equal quantities something common to both. The two things must therefore be equal to a third, which in itself is neither the one nor the other. Each of them, so far as it is exchange value, must therefore be reducible to this third. …………   https://www.marxists.org/archive/marx/works/1867-c1/ch01.htm   and …….……………In fact we started from exchange value, or the exchange relation of commodities, in order to get at the value that lies hidden behind it. We must now return to this form under which value first appeared to us.   The amount of effort or work expended on something exists independently of whether or not it is measured ‘directly’ or in the market place or even if we know or aware about it or it influences human activity or not. Of course I have this debate before in a long running thread on libcom. And there is a bishop Berkley counter argument that if we are not aware of it doesn’t exist and Neptune didn’t exist in 1533 or whatever. Labour time value manifests itself in exchange most simply in simple commodity production where it is even obvious to the participants exchanging an equal amount of my effort for an equal amount of someone else’s. I can rummage about for the Rubin quote if required. It is fairly simple really in simple commodity production and capitalism the exchange value system is ‘accurately’, like the ‘true born Briton Robinson’ decided to do, measuring something , imperfectly mostly; human effort or value. In agricultural, feudalism because of the nature of its system- which we can go into if required- stuff didn’t exchange at its value. However that did’t mean that value and even suplus value didn’t exist.   ……….But this identity of surplus-value with unpaid labour of others need not be analysed here because it still exists in its visible, palpable form, since the labour of the direct producer for himself is still separated in space and time from his labour for the landlord and the latter appears directly in the brutal form of enforced labour for a third person………..  https://www.marxists.org/archive/marx/works/1894-c3/ch47.htm as for Robbo SNLT was required to bat away some daft objections and more importantly to deal with the fact that the analysis required to look at the whole thing in terms of it being dynamic rather as a static one. I am not suggesting accurately measuring the value of products. Just enough to allow us to understand how much effort has gone into making one thing versus another so we can consume responsibly. I think will stop there as I am sure it will run on.

[ALB]

Two things are being mixed up here:(1) Did Marx think that "value" would continue to exist in socialism as a society that no longer produces for sale?and(2) Did Marx consider that labour-time accounting would exist in socialism?While he probably did think labour-time accounting would exist in socialism, he certainly didn't think that value would.The quote you give, Dave B, is merely saying that what determines value in a capitalist society, i.e. a product of labour's labour-time content, will continue in socialism. That's obvious as products of labour will still be …. products of labour. What they won't be is products that are bought and sold (exchanged) so that their labour-time content won't express itself as "exchange value". I take it you agree that exchange value won't exist in socialism.I would think that there will be accounting/measuring of labour used in socialism, but it won't be labour in general, but specific numbers and time required of specific types if work. In other words, it will be part of calculation in kind with the "kind" in question being capacity to work, alongside the materials and energy needed to produce something.

[Dave B]

To add the following 15As long ago as 1844 I stated that the above-mentioned balancing of useful effects and expenditure of labour on making decisions concerning production was all that would be left, in a communist society, of the politico-economic concept of value. (Deutsch-Französische Jahrbücher, p. 95) The scientific justification for this statement, however, as can be seen, was made possible only by Marx's Capital. https://www.marxists.org/archive/marx/works/1877/anti-duhring/notes.htm  And the Emile Burns translation; 15As long ago as 1844 I stated that the above-mentioned balancing of useful effects and expenditure of labour on making decisions concerning production was all that would be left, in a communist society, of the concept of value as it appears in political ecomomy (Deutsch-Französische Jahrbücher, p. 95) The scientific justification for this statement, however, as can be seen, was made possible only by Marx's Capital  There are a few points here I think. For Robbo  I would expand on Fred; With balancing of useful effects and expenditure of labour on making decisions concerning personal consumption. As regard how hard it is it is very easy and takes about 15 minutes to calculate how much labour time we add to the raw material to produce a litre of juice. It was about 6 seconds I think last time I did it. I am on the production plan circulation list so I know what is being produced so I can check it and know how many people work on site and nearly all of them are productive workers. Another guy I know worked in milk packing his number was 7 seconds or something unbelievably similar. In capitalism, say, labour time expresses itself in exchange value. The social system or social relations of capitalism whatever act on labour time value and the EFFECT is exchange value. In Karl’s analysis of capitalism he works back from the consequence to unravel the cause, as we all do. The social relations of communism could act on labour time value in communism in a different way the EFFECT being to minimise the value of everything?; which is something capitalism also does by a slightly different mechanism. Minimising the value of everything is no small part of what capitalism does.   The other thing is a bit deeper and that is value being ‘real’ or a concept. Concept being what otherwise would be called a scientific abstraction or as Fuerbach might have it a scientific object. Or in other word this kind of stuff about chapter one commodities being material envelopes that contain expended, past tense, human effort. Fred in 1844 was far less ambiguous about what communism re his thing on the moneyless shaker communes etc. There are arguments in the scientific community related to this kind of thing like do imaginary numbers represent anything real and is gravity a force re Einstien. I am actually not that bothered much one or another to what extent if at all we will measure value in free access communism and whether value will express itself at all. With it just disappearing like Bishop Berkely’s furniture does when he leaves the room. I am just using it as an illustration on the substance of value.

[Anonymous]

ALB wrote:

Two things are being mixed up here:(1) Did Marx think that "value" would continue to exist in socialism as a society that no longer produces for sale?and(2) Did Marx consider that labour-time accounting would exist in socialism?While he probably did think labour-time accounting would exist in socialism, he certainly didn't think that value would.The quote you give, Dave B, is merely saying that what determines value in a capitalist society, i.e. a product of labour's labour-time content, will continue in socialism. That's obvious as products of labour will still be …. products of labour. What they won't be is products that are bought and sold (exchanged) so that their labour-time content won't express itself as "exchange value". I take it you agree that exchange value won't exist in socialism.I would think that there will be accounting/measuring of labour used in socialism, but it won't be labour in general, but specific numbers and time required of specific types if work. In other words, it will be part of calculation in kind with the "kind" in question being capacity to work, alongside the materials and energy needed to produce something.

Marx very clear indicated that the law of value is only a particular phenomenon of the capitalist society, therefore, the law of value will not exist in a socialist society, as well, the wage slavery system will cease.The only ones who want  us to believe that the law of value will exist in socialism  are the left wingers,  because within their phony so called socialist  societies the law of value did exist, and  capitalism prevailed and still prevails in those society, and wage slaves tooThe opportunist Lenin said that state capitalism was a step toward socialism, and the worst part is that they said that it was for the benefits of the majority of the workers. What a sarcastic  way to justify the existence of the law of value !!! 

[ALB]

Dave B wrote:

To add the following15As long ago as 1844 I stated that the above-mentioned balancing of useful effects and expenditure of labour on making decisions concerning production was all that would be left, in a communist society, of the politico-economic concept of value. (Deutsch-Französische Jahrbücher, p. 95) The scientific justification for this statement, however, as can be seen, was made possible only by Marx's Capital.https://www.marxists.org/archive/marx/works/1877/anti-duhring/notes.htm

That quote from Engels is just saying that "all that would be left" of the concept of value in socialist society is that products will still be products of labour that took a certain time to produce and would (in his opinion) continue to be measured as such, as the full passage to which the footnote refers makes clear:

Quote:

From the moment when society enters into possession of the means of production and uses them in direct association for production, the labour of each individual, however varied its specifically useful character may be, becomes at the start and directly social labour. The quantity of social labour contained in a product need not then be established in a roundabout way; daily experience shows in a direct way how much of it is required on the average. Society can simply calculate how many hours of labour are contained in a steam-engine, a bushel of wheat of the last harvest, or a hundred square yards of cloth of a certain quality. It could therefore never occur to it still to express the quantities of labour put into the products, quantities which it will then know directly and in their absolute amounts, in a third product, in a measure which, besides, is only relative, fluctuating, inadequate, though formerly unavoidable for lack of a better one, rather than express them in their natural, adequate and absolute measure, time. Just as little as it would occur to chemical science still to express atomic weight in a roundabout way, relatively, by means of the hydrogen atom, if it were able to express them absolutely, in their adequate measure, namely in actual weights, in billionths or quadrillionths of a gramme. Hence, on the assumptions we made above, society will not assign values to products. It will not express the simple fact that the hundred square yards of cloth have required for their production, say, a thousand hours of labour in the oblique and meaningless way, stating that they have the value of a thousand hours of labour. It is true that even then it will still be necessary for society to know how much labour each article of consumption requires for its production. It will have to arrange its plan of production in accordance with its means of production, which include, in particular, its labour-powers. The useful effects of the various articles of consumption, compared with one another and with the quantities of labour required for their production, will in the end determine the plan. People will be able to manage everything very simply, without the intervention of much-vaunted “value”. *15

Whatever else Engels might be saying (and like Robbo I have my doubts about the system of labour-time accounting he seems to be advocating — "labour" is not the only resource that would need to be measured in physical quantities), he is not saying that "value" itself will continue to exist in a socialist society.Since we are both agreed that there will be no exchange and so exchange-value in a socialist society this is a bit of an argument about definitions, with you defining value as "labour time content" and Marx and Engels tying it to "exchange". Obviously, products in socialism will have a labour-time content but won't exchange. Whether or not you say  "value" will still exist depends on how you define it.

[Dave B]

The quantity of social labour contained in a product need not then be established in a roundabout way;……………..[it] could therefore never occur to it still to express the quantities of labour put into the products, quantities which it will then know directly and in their absolute amounts, in a third product,…… Ie money. Or imaginary gold money as Kautsky put it later. My definition of the value of something is the amount of effort required to make it. What is yours? If you want to go back to the argument that as soon as something that isn’t obvious and ceases to produce a [platonic] phenomena eg exchange value that does makes an impact on your sense perceptions then it no longer exists. With it not being ‘written on its forehead’. And when you close your eyes your laptop disappears well so be it. I think people are missing my point on measuring value in communism a bit although I am sympathetic to the idea a bit. It is merely to illustrate a theoretical point to understand what I think Karl was on about in chapter one.   Actually the idea that chapter one is about private labour simple commodity production (‘self employed’ ) and the primordial division of labour where ‘wage labour as a category’ has no existence is more obvious in the first version of chapter one eg ……Now as far as concerns the amount of value, we note that the private labours which are plied independently of one another (but because they are members of the primordial division of labour are dependent upon one another) on all sides are constantly reduced to their socially proportional measure by the fact that in the accidental and perpetually shifting exchange relationships of their products the labour-time which is socially necessary for their production forcibly obtrudes itself as a regulating natural-law, just as the law of gravity does, for…. And also the first version of the Robinson allegory of value;  …….and our Robinson who saved watch, diary, ink and pen from the shipwreck begins to keep a set of books about himself like a good Englishman. His inventory contains a list of the objects of use which he possesses, of the various operations which are required for their production, and finally of the labour-time which particular quanta of these various products cost him on the average. All relationships between Robinson and the things which form his self-made wealth are here so simple and transparent that even Mr. Wirth can understand them …(in your dreams) …. without particular mental exertion. And nevertheless all essential determinations of value are contained therein.  https://www.marxists.org/archive/marx/works/1867-c1/commodity.htm  And; Thus, the Marxian law of value has general economic validity for a period lasting from the beginning of exchange, which transforms products into commodities, down to the 15th century of the present era. But the exchange of commodities dates from a time before all written history — which in Egypt goes back to at least 2500 B.C., and perhaps 5000 B.C., and in Babylon to 4000 B.C., perhaps to 6000 B.C.; thus, the law of value has prevailed during a period of from five to seven thousand years. https://www.marxists.org/archive/marx/works/1894-c3/supp.htm#law

[Author]

Posts