Date: Wed, 4 Jun 97 7:55:02 EDT
From: boddhisatva <kbevans-AT-panix.com>
Subject: Re: M-TH: "Crisis-free accumulation" and value theory






		Hugh, et al,



	Do you see labor value as an intrinsic credit to the economy, or
instead do you focus, as I do, on the underlying assumption that all labor
creates a need for reproduction?  


	I believe that if we translate labor value into "reproduction
requirement", we bridge part of the gap between bourgeois and Marxist
economics.  When a person labors, he labors for reproduction, not to
benefit his fellow man.  That was Marx's initial assumption.  Thus he
creates, with every hour of work, a "reproduction requirement" which is
something like present GDP/(population x hours worked). This is his ideal
wage. Because he works on capital, we subtract necessary investment.  This
now is his ideal capitalist wage.  Now we multiply his ideal capitalist
wage by a "misery index" which is that portion of his ideal capitalist
wage that he will accept without quitting.  This then, is the first factor
in forming what I'd like to refer to as a "marginal propensity to get
screwed".  Alienation causes the worker to underestimate the worker's role
in production and thus underestimate the usefulness of his product
(because he sees it as the product of simple work).  To the extent that
the worker is unfamiliar with technological change (the "state of the
art"), this effect is increased.


	Notice here that the more people work, the *smaller* the ideal
wage becomes.  This takes away the implicit and troubling (if not fatal)
argument of labor theory that work is somehow valuable in and of itself. 


	On the other side, we have an ideal price (which compensates the
ideal wage exactly) and an ideal capitalist price.  We then multiply that
price by the market dynamics of usefulness and substitutes.  This creates
a baseline "marginal propensity to compensate fairly", which is always
less than one because we cannot expect workers to satisfy the consumers'
needs perfectly.  Yet, the propensity can be, indeed must be, much more
than one for goods subject to fetishizing or speculation.  The propensity
to compensate fairly also adjusts *upwards* based on a consumer's lack of
knowledge as to the production costs and low regard for teh importance of
alienated labor. This is the mirror of the worker's tendency to
under-charge, since both worker and consumer do not realize that the state
of the art has created the capacity to generate more use value more
cheaply, and base their pricing decisions on antiquated and artificial
standards. It seems like all this creates a simultaneous set of equations
between price and labor until one realizes that the "misery index" also
applies to consumers, and ratchets *down* the propensity to compensate
fairly.  Finally, there is a volatility factor.  That is the difference
between the most over-compensated goods and the most under-compensated
goods.




	Notice that nowhere have we mentioned some intrinsic value which
labor creates.  Yet, (if we were able to follow the preceding mishigas) 
we see that the model requires a marginal propensity to compensate of
greater than one if capitalists are to be paid, coming to the same
conclusion as the more familiar Marxist view (that capitalist compensation
is surplus to the relationship between producer and consumer), without the
"intrinsic value" argument. 



	This model (rough though it is) suggests that the most dangerous
economic condition would actually be high compensation in an increasing
segment of the work force, especially compensation coming from
"extra-economic" sources such as stock markets or governments, generating
or contributing to high speculation and/or inflation and/or luxury goods
spending, a relatively high misery index, and a mature technology base,
where workers and consumers have a good idea what goes into the products
they buy.  This sounds like 1930's and 1970's America to me.  This is a
 classic description of exploitation, with government compensation and/or
a "wealth effect" thrown in.  Then there is the classic need for
capitalism to revolutionize technology to keep moving.  When these things
happen together, the propensity to fairly compensate tends dangerously
towards one, with only artificial pricing forces to sustain it.  Once
those artificial supports are kicked away, a crisis ensues. However, this
is not a catastrophist model since the model clearly implies that a stable
misery index can be sustained almost permanently, given a reasonable rate
of technological change and alienation (in fact, the old "new and
improved" game can compensate quite well for actual technological
progress). 



	I am clearly and deliberately making up my own terms here, because
although I'm certain there are more well-established terms for all these
effects, I don't want to follow the arguments that those terms imply by
association.  I am happy to be torn apart by the debate, so long as it is
a new debate, and not a re-hashing of old ones.  





	peace






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