what is labour and what is value

Paul Cockshott wpc at clyder.gn.apc.org
Sun Oct 30 21:01:26 MST 1994

In vol I of capital value and labour are treated as the same thing.
Value is just socially necessary labour time. But when one talks of
the labour theory of value one is extending this to the assertion that
the exchange values of commodities, when expressed in terms of the
same equivalent, stand in proportion to their values  - that is their
labour content.

By labour here one is refering to labour that is both average and
abstract. The averaging is a necessary effect of adding together
the labour of a large number of people whose individual work rates
vary, the abstractness comes from the fact that the labour can
potentially be engaged in any branch of industry.

When economists have tested the LTV it is this assertion that
exchange values are proportional to labour contents that they
have been testing. In doing this there are a number of practical
problems. One has to work from aggregate figures for the outputs of
different industries so that one compares the relative price of
steel with that of flour or butter for instance but disregards
the differences between different grades of steel and flour.
In addition, depending upon the country one is looking at, one may
have access to data on the number of hours worked or in some cases
one only has data on wages paid.

The data for the US and Jugoslavia quoted by Petrovic and Ochoa in
the Cambridge Journal of Economics, do, if I recall correctly use
records of hours worked. The data that Allin and I have worked on are
for the UK where one has to work back from money wages to hours.
In all cases one finds very strong correlations between value and
price with Rsquareds for the regressions of between 95% and 98%.
If one attempts to use any other input to the production process
other than labour as a predictor of values - steel, electricity
oil etc one gets very much poorer results.

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


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