Justin and the LTV

Allin Cottrell cottrell at wfu.edu
Fri Oct 28 09:54:21 MDT 1994


>> 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
>
>Aaak. Marx's theory in C1 is not the same as Ricardo's. So which is it?
>
The two theories (if they really are two) are the same in this respect:
both assert that relative prices reflect, or are governed by, the relative
amounts of labor time socially necessary for the production of the various
commodities, in a market economy.  This is a testable proposition, and it
checks out.

>The reason it cannot be the case that it does is that the theory in Marx
>at any rate is logically inconsistent, given a handful of additional true
>premises about the economy.

The key additional 'true premise' is that the rate of profit is equalized, or
in some real sense 'tends to be equalized' across different branches of the
economy, with differing organic compositions of capital.  This is far
from an a priori truth.  The 'tendency' claim can perhaps be expressed in
such a way as to be irrefutable -- but that is hardly a scientific merit.
The investigations referred to be Paul Cockshott (although I would
perhaps express this a bit more tentatively than he) provide evidence that
the equalization assumption is empirically false.

>So it's a Ricardan theory.... And a simple Ricardan
>theory at that: forget your Sraffan sophistications, let's go back to the
>labor value embodied in each individual commodity--not each kind, but each
>particular one. Pardon me if I remain skeptical.

Yes, indeed, forget the Sraffian sophistications.  But why 'each particular
one'?
Ricardo repeatedly talks of 'required' or 'necessary' labor content.  He was
not an idiot.

=======================
Allin Cottrell
Department of Economics
Wake Forest University
Winston-Salem, NC 27109
(910) 759-5762
cottrell at wfu.edu
=======================



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