Elasticity of value

Chris Burford cburford at gn.apc.org
Fri Apr 28 21:50:35 MDT 1995

Elasticity of value: response to Paul
 > From owner-marxism at jefferson.village.virginia.edu Fri Apr 28 11:33:15 1995
 > To: marxism at jefferson.village.virginia.edu
 > Cc: wpc at cs.strath.ac.uk
 > Subject: Elasticity of value
 > Date: Fri, 28 Apr 95 09:53:41 +0100
 > From: wpc at cs.strath.ac.uk
 > Sender: owner-marxism at jefferson.village.virginia.edu
 > Reply-To: marxism at jefferson.village.virginia.edu
 > Chris:
 > >From my point
 > of view I am saying that if the law of value is interpreted as inevitably
 > manifesting itself in a non-linear way we would expect elasticity and
 > variation *as well as* a tendency to revert to some underlying more
 > frequent pattern.  Much of the grief of trying to study Marx in a
 > mechanical linear way, would dissolve.
 > Paul:
 > I find this discussion amorphous and metaphorical.
 > What do you mean by the law of value.
 > What do you mean by it asserting itself in a non-linear way.
 > What is meant by the elasticity of value?
 >      --- from list marxism at lists.village.virginia.edu ---

You understand of course that I write from the point of view of regarding
chaos theory as an established branch of science. Among other things it
emphasis that interacting forces often do not conform to simple
rectilinear relationships but to curvilinear ones, with postive and
negative feedback loops. This is much more suitable to analysing a
cyclical process, like the capitalist trade cycle, and I would maintain
Marx's descriptions of this process are consistent with such a model
given the limitations of 19th century scientific concepts.

So Grossmann trying to explore capitalist breakdown with a rectilinear
model was making a category error.

Just because an interactive process has fuzzy boundaries I do not think
makes it amorphous.

As for metaphorical, if we say that the price of a commodity naturally
tends to "gravitate" towards its value, in the sense of the socially
necessary labour time required to produce it, such a metaphor seems to me
to be scientific and appropriate.

I admit that I am speculating as to whether a bridge can really be built
to the Italian writers whom Steve Wright quoted.

What do I mean by the law of value? I found interesting the point made by
you and Allin at the beginning of your article on Value's Law, Value's
Metric, that the phrase "law of value" is little used by Marx, but
popular among his followers.

I saw no reason to differ with your definition:

"The law of value states that value, understood as the labour time
socially necessary to produce a commodity, is conserved in the exchange
of commodities".

but perhaps I should.

I feel more comfortable with the passage on the fifth page of Capital
which says:

"The total labour-power of society, which is embodied in the sum total of
the values of all commodities produced by that society, counts here as
one homogeneous mass of human labour power, composed though it be of
innumerable individual units."

One example of "asserting itself in a non-linear way" is IMO that on the
upswing of the economic trade cycle the total amount of money in
circulation swings above the total labour power of society actually
available for the production of commodities, whereas during a recession
this swings far below.

Frankly I would need more time and ability to demonstrate this in other
respects if you remain sceptical, but as I have argued I think a
non-linear approach more inuitively fits the data and Marx's descriptions.

About the elasticity of value: In terms of use value this depends on
psychological, social and physical conditions as to whether something has
a use-value. Jon was right in giving an example of a book of "Great
Expectations": it might be used as literature, a door stop, fuel,
cleaning material.

In terms of exchange value: this is elastic according to your estimate
and that of others about the tradability of the unit of currency. The
dollar has an elastically sagging trade value at present.

I suspect you will remain wary of these approaches though I do not
believe they are incompatible with demonstrating the relevance of Marx's
analysis over much of the data as if it behaved in a linear way.

I have been defending the relevance of your study in Capital and Class on
"Testing Marx", from criticisms from someone who suggested that no
comments were forthcoming because your work was academic and
inappropriate. I thought meanwhile economists were deciding not to say
anything without reading the article.


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