Justin and the LTV

Paul Cockshott wpc at clyder.gn.apc.org
Thu Oct 27 23:03:49 MDT 1994

Justin suggests that Marx did not believe in the labour theory of
value and that vols 2 and 3 of capital are a critique of it.
Opinions can obviously differ on this, but the question for science
is not what Marx thought of it, but whether it actually holds in

There is now a growing body of empirical work by Shaik, Petrovic,
Ochoa, Valle, Cottrell et al to indicate that the simple form
of the labour theory of value as given by Ricardo in the Principles
and by Marx in Vol 1 of capital or in Wages Prices and Profits
is what actually governs prices in capitalist economies.
The empirical data on which this has been confirmed covers the
economies of the US, Jugoslavia, Italy, Mexico and the UK.
All researchers find that the simple labour theory of value
provides as good if not a better predictor of market prices
than does the theory of prices of production.

In particular the theory of prices of production predicts that
the rate of profit in an industry will be uncorellated with
its organic composition. In practice it is found that the
rate of profit is negatively correlated as predicted by the
simple labour theory of value. The theory of prices of production
whether Marx's version or the modified versions put forward by
Marx's critics is certainly unsustainable in the light of recent
research. It appears that a simple Ricardian theory of value is
at least as good if not better. What remains an open scientific
question is why the law of value holds.

The most promising theoretical work in this area is that of
Farjoun and Machover who were the only theoreticians to have
anticipated these empirical findings.

Paul Cockshott , 		
Phone: 041 637 2927		wpc at clyder.gn.apc.org
				wpc at cs.strath.ac.uk


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