Re: Is there a generally accepted theory of value?

From: Robert Vienneau (rvien_at_see.sig.com)
Date: 03/12/05 

Date: Fri, 11 Mar 2005 21:51:49 -0500

In article <1110575590.203726.263920@g14g2000cwa.googlegroups.com>,
"Zerge" <zerge@hotmail.com> wrote:

> Robert Vienneau wrote:

> > In article <1110566607.806738.116020@l41g2000cwc.googlegroups.com>,
> > "Zerge" <zerge@hotmail.com> wrote:

> > > > Smith, Ricardo, and Marx worked with models in which there are
> > > > social
> > > > classes, including capitalists who live off of the return to
> > > > capital.

> > > > The hours required to work to be able to purchase commodities is
> > > > not
> > > > the labor value of those commodities, as "labor value" is
> > > > understood
> > > > in the labor theory of value.

> > > > The classical theory of value is not equivalent to the labor
> > > > theory
> > > > of value.

> > > > If you don't understand these claims, you are not competent to
> > > > enter in on the topic proposed by the original poster. Strangely
> > > > enough, Zerge's comments on opportunity cost suggest he may be
> > > > in that class of those not competent to conduct an on-topic
> > > > discussion.

> > > And BTW, I have always understood the difference between the
> > > classical
> > > theory of value and LTV. I'm not sure what gave you the idea I
> > > don't.
> > > If you could point out what phrase of mine caused your confusion,
> > > I'd
> > > be happy to clarify.

> > "Is there a generally accepted theory of value? Or are we still
> > stuck with labor vs. subjective?"
 
> Ah. I see why you would consider it like a confusion on my part. Indeed
> I meant the more Marxist LTV, which still clings to many minds.

I don't know what Zerge means by "the more Marxist LTV". I would
think Ricardo would be a more appropriate focus of the discussion
here anyways.

But the topic was to relate the contrast between the labor theory of
value and the subjective theory of value to the contrast between
the labor theory of value and the classical theory of value.

It would seem that Zerge thinks, incorrectly, there are no other
choices than a subjective theory of value and a labor theory of
value. And he thinks the classical theory of value is something
other than the labor theory of value.

The logical conclusion to draw from Zerge's premises is that he
thinks that the Classical theory of value is a subjective theory
of value.

Thus, he would argue that Ricardo, for example, either didn't have
a theory of value or had a subjective theory of value, whether
completely worked out or not.

But I haven't seen him put anything forward on that topic, not
even a reference to the literature. I happen to know that, in the
literature, the relationship between subjective, or so-called
neoclassical, theories of value and classical theories of value
is contentious.

> The labor theory of value I proved in the example above is neoclassical
> 100%, but using modern techniques.

If one wants a modern theory of value, one could look at:

  Heinz D. Kurz and Neri Savadori 1995. Theory of Production:
  A Long-Period Analysis, Cambridge University Press.

Often those who explain this theory of value, think of it as
consistent with an approach put forth by William Petty:

  "To express my self in Terms of Number, Weight or Measure; to
  use only Arguments of Sense, and to consider only such Causes,
  as have visible Foundations in Nature; leaving those that
  depend upon the mutable Minds, Opinions, Appetites and Passions
  of particular Men, to the Consideration of Others."

I realize that the textbook I mention above is advanced. The student
needs a simplified version to introduce him or herself to this
modern theory of value. I think the following, though equally
rigorous, does not treat some of the advanced topics of the
above textbook:

  Luigi L. Pasinetti 1977. Lectures on the Theory of Production,
  Columbia University Press.

I realize that Pasinetti is still fairly advanced. An even simpler
textbook presentation can be found in:

  Vivian Walsh and Harvey Gram 1980. Classical and Neoclassical
  Theories of General Equilibrium: Historical Origins and
  Mathematical Structure, Oxford University Press.

> > The answer to the second question is "no".

> Did you try to work through the equations at all?

That seems to me to be a non-sequitur.

But I did note that Zerge's starting premise, that all income is
wage income, rules out more developed classical theories of value.

Once again, Zerge has (again) refused to comment on this proposition.

> Is there any part I
> could clarify for you?
> The important points are these. First, the time of an economic agent is
> limited; it can produce either commodity A or commodity B, not both at
> the same time. Producing one causes the opportunity cost of not
> producing the other one.

I don't see what that has to do with the (false) Labor Theory of
Value.

  "It is terrific to contemplate the abysmal gulf of incomprehension
  that has opened between us and the classical economists. Only one
  century separates us from them. (I say a century; but even 1/2
  century after, in 1870, they did not understand it. And during the
  preceding century an obscure process of 'disunderstanding' has
  been going on.) How can we imagine to understand the Greeks and
  the Romans? (Or rather, the extraordinary thing is that we DO
  understand, since we find them perfect, Roman law and Greek
  philosophy.) The classical economists said things which were
  perfectly true, even according to our standards of truth: they
  expressed them very clearly, in terse and unambiguous language,
  as is proved by the fact that they perfectly understood each
  other. We don't understand a word of what they said: has their
  language been lost? Obviously not, as the English of Adam Smith
  is what people talk today in this country. What has happened then?"
     --Piero Sraffa 

-- 
Mostly economics:  <http://www.dreamscape.com/rvien/#PublicationsForFun>
r           c
 v         s a           Whether strength of body or of mind, or wisdom, or
  i       m   p          virtue, are found in proportion to the power or wealth
   e     a     e         of a man is a question fit perhaps to be discussed by
    n   e       .        slaves in the hearing of their masters, but highly
     @ r         c m     unbecoming to reasonable and free men in search of
      d           o      the truth.    -- Rousseau

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