Positive side to anti-LTV case

Steve.Keen at unsw.EDU.AU Steve.Keen at unsw.EDU.AU
Tue Sep 20 17:09:49 MDT 1994

Paul Cockshott asks what I would accept in the way of empirical tests.
The brief answer is his own work, as I remember it from earlier debates
on pen-l and marxism.

>From memory, Paul found that LTV values were as good a predictor of
relative prices, etc., as the Sraffian approach. This he took as
support for Marx's LTV scheme; but it could as easily be taken
as support for Sraffa.

The difficulty is, of course, that such empirical tests get swamped
by the fact that data is a lot more complex than either of the rarified
theories allows, and that at an aggregate level, the Vol I assumption
that organic compositions are the same across all industries isn't too
from the mark--in which case, the data itself doesn't allow us to

The only "test" that I can think of which could perhaps let us
differentiate is one that tests the LTV assertion that rates of
surplus value will be highest in industries where the organic
composition of capital is lowest. But that too will be "bastardised"
by the fact that labor in such industries tends to be unskilled
relative to labor in highly capital intensive industries, and that
pay differentials for skilled labor are extreme--so the skilled
labor reduction would also have to be factored in.

I'll leave this for Paul to develop. My basic reason for putting
forward my interpretation of Marx wasn't empirical--as I think
Paul might remember, I commented on his posts on this front that
if that was all there was to the debate (relative empirical
validity), then it would hardly have been worth joining.

The issue for me was the theoretical difficulties of the LTV. The
transformation problem and the TRPF had hobbled Marxism for a
century, while other critical non-mainstream analyses--Kaleckian,
post-keynesian, sraffian--had progressed. All of these schools
(except perhaps post-keynesian) owed a great deal to marx, yet
much of that baby was being thrown out with the bathwater
of the LTV. At the same time, from my perspective, marxists
themselves had long ago thrown the baby away and were trying
to make the bathwater breathe :-).

Steve Keen


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