Labour theory of value and potatoes (slightly stupid thread)
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ALB wrote:
"A bag of the same weight of small potatoes would have the same value as a bag of larger ones."Does this mean that a bag of 10 large potatoes has the same value as a bag of 10 small potatoes?"You are the one who said this was a silly thread."That's true, but right now I can't fully see why my reasoning is terrible. Though I probably will after a few more posts.
Vin wrote:"You cannot apply the LTV to two potatoes"Why not?"and I wonder where your vision of potato production comes from."I really have no clue about food production."Today the production of potatoes is a complex social process. It is with this that the exchange value is concerned. How much socially necessary labour time goes into it.."As I see it, the LTV means that if two objects are socially produced with the same amount of labour time, it would mean that a potato that has the weight of 3 units has the same exchange value as a potato that has the weight of 3 and a half units. And that to me doesn't make any sense.
Potato’s based on size have different uses apparently. Large ones for baking potato’s And small ones tend to be used for potato salads and things. If people intend to peel them for roasting and chips etc they might prefer medium sized ones/ The marketing people have noted that people seem to prefer a bag of potato’s as all having about the same size. The supermarkets respond to anticipated and future demand (of size) by forward contracting to farmers to produce what is likely to be demanded etc. And that can be controlled to some extent by the cultivation and planned harvesting time, variety selected etc etc. I don’t think there are any very significant differences in cost for one or the other eg weight yield per acre etc. Although I suppose weather could affect that but I guess it could go either way. Then I guess you could have an over supply of one or the other. [There is a sort of separate issue of flavour, variety and suitability for what they are going to be used for etc as with I suppose baby carrots and cherry tomato’s. And the issue of early harvesting of immature new potato’s for flavour?which probably has a higher cost probably as a reflection of lower kilo yield per acre. With fixed gound rent cost adding to the per kilo cost or something- is this where you thought of going with it?] Sorting, handling and packaging technology is highly mechanised and doesn’t really impact price. My lodger worked at a factory that ‘processed’ fresh vegetables for the supermarkets but he is not here at the moment. Only the pretty cabbages etc make it onto the supermarket shelves all ugly vegetables go to the processing industry for canning and ready meals etc. Robots with magic eyes have been trained to select out the ugly vegetables for sometime and that technology is now being used to sort food packaging waste for recycling.
Sympo wrote:"A bag of the same weight of small potatoes would have the same value as a bag of larger ones."Does this mean that a bag of 10 large potatoes has the same value as a bag of 10 small potatoes?How could it since 10 small potatoes can't weigh the same as 10 large ones, can they?Incidentally, to complicate things, commodities do not generally exchange at their labour-time values but tend to sell at what Marx called their "price of production" which is the monetary cost of producing them + a markup for the average rate of profit.
ALB wrote:"How could it since 10 small potatoes can't weigh the same as 10 large ones, can they?"I think what I am trying to ask is "does a potato that weighs 1.5 gram have the same value as a potato that weighs 1 gram?"If the answer is "yes", how is the value of potatoes relevant at all to its price, seeing as the price of potatoes differ depending on the weight of them? As I see it right now, all potatoes take the same amount of labour time to socially produce."Incidentally, to complicate things, commodities do not generally exchange at their labour-time values but tend to sell at what Marx called their "price of production" which is the monetary cost of producing them + a markup for the average rate of profit."Yes, I believe you mentioned this in my thread "A few questions regarding economics". I should read up on that.
Sympo wrote:ALB wrote:"How could it since 10 small potatoes can't weigh the same as 10 large ones, can they?"I think what I am trying to ask is "does a potato that weighs 1.5 gram have the same value as a potato that weighs 1 gram?"If the answer is "yes", how is the value of potatoes relevant at all to its price, seeing as the price of potatoes differ depending on the weight of them? As I see it right now, all potatoes take the same amount of labour time to socially produce."Incidentally, to complicate things, commodities do not generally exchange at their labour-time values but tend to sell at what Marx called their "price of production" which is the monetary cost of producing them + a markup for the average rate of profit."Yes, I believe you mentioned this in my thread "A few questions regarding economics". I should read up on that.
I think the point is, Sympo, that value is a social average so it doesnt really matter in the end that a 1.5 gram potato and a 1 gram potato have a different price despite having – supposedly – the same embodied labour content. It is only in the long run and in the aggregate that prices correspond to values to the extent that supply and demand work to cancel each other as an influence on the price of potatoes. But even that is not the whole picture given the tendency for the rate of proft to equalise across different branches of industry despite differences in the organic composition of capital between them That is another factor that works to ensure that the price of a commodity will tend to diverge from its value
Having picked "tetties" in my youth, you get paid to fill the bags, therefore you tend to leave the little uns behind and concentrate on the big uns.
My hamster has free access to food , he prefers a small potato its enough to fill him up.On a lighter note the May Day Rally at exhibition park newcastle is on Saturday 29 april might be worth a look would be nice if north east members could meet up in the marque about 11.30 anybody interested?
robbo203 wrote:I think the point is, Sympo, that value is a social average so it doesnt really matter in the end that a 1.5 gram potato and a 1 gram potato have a different price despite having – supposedly – the same embodied labour content.Does social average basically mean that if it takes 1 hour for you to do one thing, and it takes 3 hours for me to do the same thing, the social average is 2 hours (combined labour time divided by the number of individuals working)? If not then correct me and ignore the question after this sentence.Why does the fact that value is a social average make the problem of potatoes of different weights having differens prices go away? This question isn't meant to be snarky, I'm just having a hard time seeing the connection.
I suggest you watch the videos in this series:https://kapitalism101.wordpress.com/2010/09/21/law-of-value-6-socially-necessary-labor-time/
Sympo wrote:Does social average basically mean that if it takes 1 hour for you to do one thing, and it takes 3 hours for me to do the same thing, the social average is 2 hours (combined labour time divided by the number of individuals working)?No it doesn't mean that.
Great stuff.
Post 24 might be a good question I thought. When new technology is introduced that lower the amount of labour time it requires to produce something. Then for sometime stuff is being produced at ‘two labour time values’. It becomes more and more the case as you need larger amounts of capital to set up new modes of production etc. Or in other words ‘socially’ switching from one to the other takes time. Karl dealt with it as dealt with almost everything and said that the commodity then had a ‘market value’. I guess if you are using new technology and capital etc then the market value higher than your labour time value and you make better than average profits etc And if you aren’t the market value is lower than your labour time value and the new guys are either undercutting you and eating into your average rate of profit or they are just making a bigger profit. Capitalist using the old technology will if they can not replace slowly used up fixed capital with the same stuff and will gradually replace it with the new stuff. That can take 10 years or so as depreciation capital is generally set at about 10% per annum, as a rule of thumb, so the industrial accountants tell me. If the new technology is really good in a labour saving way the old capital can devalue to scrap value before it becomes technically useless. Sometimes it is not technically possible to just incrementally roll in the new technology and if the differential is great enough you just have face being wiped out in a couple of years from the entry of new capital or take the hit and join in. There was an interesting case in Huddersfield a hundred years ago with largest glass bottle manufacturer in England. A new technology became available and they went for straight away wholesale with the associated new machinery and plant etc. Only to be bankrupted 10 years later by yet another radical labour saving technology which was picked up a bit later by their competitors and new venture capitalists. Paul Masons book (which I am finding intensely irritating) does actually introduce this kind of idea. With surplus value going back to investing in new labour saving technology and capital. Which is the flaw in the Luxembourg argument about the workers not being able to buy back all of what they produce, or the surplus, and capitalism collapses. The capitalist use the surplus value to buy new stuff [fixed capital]; it wasn’t Rosa’s fault as Karl got into a muddle on turnover and by leaving out fixed capital in his two, should have been three, departments of capital. I suppose a capitalist might invest say 100 million and ‘make’ gross 20 million in year one; 10 million in surplus value, at a rate of profit of say 10%, and 10 million covers the depreciation of his fixed capital at 10% pa. What spooks him is the convergence, or narrowing of the gap, between the falling rate of profit and the increasing rate of deprecation of capital which are flip sides of the same coin
Sympo wrote:robbo203 wrote:I think the point is, Sympo, that value is a social average so it doesnt really matter in the end that a 1.5 gram potato and a 1 gram potato have a different price despite having – supposedly – the same embodied labour content.Does social average basically mean that if it takes 1 hour for you to do one thing, and it takes 3 hours for me to do the same thing, the social average is 2 hours (combined labour time divided by the number of individuals working)? If not then correct me and ignore the question after this sentence.Why does the fact that value is a social average make the problem of potatoes of different weights having differens prices go away? This question isn't meant to be snarky, I'm just having a hard time seeing the connection.
The problem goes away if you sell and set prices individually based on hours of personal effort instead of an average based on capital value. The capital based dollar is inherently discriminatory against poor people. A better unit of trade and exchange would be an hour of persons time. If you're poor you could fairly be charged an hours of your time equal to $9 at your salary working at McDonnell's for buying a bag of potatoes. If you're rich you could fairly be charged an hour of your time equal to $1000 at your salary working on wall street trading derivatives for buying a bag of potatoes. The conclusion is that charging the same dollar price to everyone is not fair and charging he same time and effort price to everyone is more fair. Also, charging prices based on an hour of a persons time converted into dollars make the potatoe seller more money and lets the poor people afford to eat as many potatoes as the rich person. the solution is actually quite simple. All that is required is to create a digital currency based on a unit of effort in hours of time that gets converted to capital based dollars at time of purchase. So a price tag says "cost 1 hr" and then you pay whatever 1 hr of your time is worth as determined by computer autmoatically using your income or tax or other records. Business likes it because it produces more nominal profit for the business on paper. Poor people like it because it lets them buy things less expensively and sets their time as equal in value to the time of richer people. Rich CEO's and wealthy people hate buying things with it and feel their time should buy more stuff than poor peoples time, but since it makes the company more money, the CEO will reluctantly have to offer personal time effort based pricing to their own customers in order to stay competitive with the competition. In this way captitalism will eat itself.
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