Subject: M-TH: LTV
Date: Sat, 6 Dec 97 00:31:46 -0000
From: Bill Cochrane <bc1961-AT-xtra.co.nz>


Acolytes of the Arcane,
     I see the LTV debate continues and myself drawn to contribute again, albeit in my usual derivative and citatous way.
To para phrase Foley at some length, If you begin with the assumption that Marx unambiguously identified the term =B3value" with the labor embodied in particular commodities, as the line of critical analysis, beginning with Tugan-Baranowsky (1905) and continuing through Bortkiewicz (1952), Sweezy (1970), Seton (1957), Morishima (1973), Samuelson (1971), Steedman (1977) and Roemer (1981) does,you will almost certainly arrive, as they did at the conclusion that there's no rigorous quantitative connection between the labor time accounts arising from embodied labor coeffcients and the phenomenal world of money price accounts, excepting the highly unusual case of equal organic compositions of labour. The mathmatical formalization of their arguements is virtually beyond question and if one accepts the premises of this line of arguement the inevitable conclusion will be the rejection of the LTV as a valid frame of analysis for real capitalist economies.
Given this dismal conclusion a number of possibilities exist;
- reject the whole historical materialist framework of marxism as deeply flawed by the failure of the LTV, as does Samuelson.
- reject the LTV but retain a commitment to the historical materialist perspective and find some other analytical structure in which to situate the theory of exploitation such as Walrasian general equilibrium theory or the Sraffian theory of pricing
- Or take a position such as Morishima's in which the labor theory of value is retained by showing that the embodied labor accounting system reflects some aspects of capitalist reality, even though it distorts the picture quantitatively. The result being something along the lines of Morishima's =B3fundamental Marxian theorem" :- the rate of profit in the price accounting system is positive if and only if the rate of exploitation in the embodied labor accounting system is positive. Such a position of course leaves no obvious function for the LTV in analysing real Capitalist economies, truely a 'fifth wheel'.
Another alternative of course exists, and is unsurprisingly the one to which I adhere.The above criticisms are well founded if you accept the reading of Marx that his critics offer,
To paraphrase Moseley this time, Marx unambiguously identified the term =B3value" with the labor embodied in particular commodities" I reject this premise and instead maintain that in Marx=B9s work he follows  the general methodological principle that aggregate magnitudes are determined prior to the determination of individual magnitudes.  Given this  premise Volume 1 of Capital is read as applying to the capitalist economy as a whole and is thus primarily about the determination of the total amount of surplus-value produced in the total economy.
So what you might say, such an approach has a number of virtues not least of which is that the transformation problem ceases to be a problem because it is simply meaningless in such a framework. Also the macro-monetary or the new interpretation or other interpretations that arise out of this sort of reading are not committed to any particular theory of price fixing or even the equalization of profits, a point taken from Mohun.
Even if the above is accepted it still might be argued by unrepentant analytical philosophers, for instance, that the LTV contributed nothing extra to our understanding of the world and that we should take a razor, perhaps borrowed from Ockham, and neatly excise all reference to the LTV from our works.
I would argue that the LTV retains an important role because if aggregate value is determined before the price of individual commodities, by the principle of the prior determination of aggregate values, a clear difference will exist between the explainatory laws that govern the total value produced and those that determine the distribution of this value through prices to the commodities produced. 
Anyway I've run out of people to paraphrase 
Cheers
Bill Cochrane (or is it)


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