Date: 30 Oct 94 21:01:26 From: wpc-AT-clyder.gn.apc.org (Paul Cockshott) Subject: what is labour and what is value 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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