Re: Leszek Kolakowski on the Marxian LTV

Quirk wrote:
> Hunter wrote:
> > Presuming that sci.econ is frequented by a few who know something of
> > economics, I'm curious as to their judgment as to Bohm-Bawerk's and
> > Leszek Kolakowski's take on Marx's LTV:
>
> The labour theory of vaue is not Marx's.

Marx adapted the classical LTV to his purposes and the result was
"Marx's LTV".
>
> > This, following Kolakowski, is the center of Bohm-Bawerk's argument
> > against Marx:
>
> > "1) Value in Marx's sense cannot be measured quantitatively, partly
> > (but not solely) because there is no way of reducing different kinds
> > of
> > labour to a common measure;
>
> Of course it can be measured, by market response, Marx just didn't want
> to accept that measure so instead tried to create his "labour-time"
> unit of measure.

But B-B and Kolakowski are engaged in a critique of "Marx's sense" of
the matter. Have you actually responded to the point in paragraph 1
about the difficulties of measuring the respective *value* of myriad
labor inputs quantitatively? Aren't you presuming that market response
somehow tracks labor specifically? And surely price is a market
response to more factors than just labor?

However when you have a free market you can precisely
> know the relative value of labour, because labourers will only bring
> the product of their labour to market when doing so provides a return
> that is greater than their subjective perception of the disutility of
> producing the product in the first place.

_Kapital_ is ostensibly a study of capitalist enterprise. The workers
in that system don't bring products to market. Capitalists do,
sometimes even in the face of a subjective perception of disutility
which involves calculations about myriad inputs, certainly not just
labor. But anyway, these inputs are calculated as costs, not value
which seems to me to be a much larger subject.


>
> So it is fair to say that Marx's "labour-time" unit of measure is not
> usefull in a command economy, it is wrong to say that this somehow
> falsifies the labour theory of value itself, which is not a Marxian
> theory, but a feature of classical economics.

Isn't the real issue whether, as Marx adapts the LTV, it involves a
*law* of economics or a mere Marxian definition open to the claim that
it is arbitrary and useless---except of course in politics.

>
>
> > 2) prices depend on many factors, not only value, and we cannot
> > ascertain the quantitative importance of value in relation to the
> > others;
>
> equilibrium price = cost + rent.

But do cost + rent sum up all the operative factors? Are we able to
ascertain the quantitative importance of Marxian labor value vis a vis
the others? And if not what is Marx's LTV but a definition, an
arbitrary definition as opposed to a law?

>
> Price at the point of sale is set by the amount of demand that
> encounters the amount of supply. From this point, competition drives
> price towards cost, rent drives price towards marginal utility. Rent
> can only be charged where supply for new demand cannot be produced by
> the application of labour and capital alone, such as where it depends
> on monopolies like land, intellectual property, license, etc.

The operative factors seem not to be separated here much less
quantified. How would you apply Marxian value theory to it?

>
>
> > 3) therefore the statement that value governs the movement of prices
> > and social relations is both arbitrary (because it is not clear on
> > what
> > ground we are asked to believe that value is determined by
> > labour-time)
> > and scientifically useless, for it does not help us to explain the
> > movement of prices, still less to foresee it." (See Vol. II)
>
> This is a false conclusion, as neither are arbitrary unless you have a
> command economy, as the market does provide the feedback needed to both
> explain the movement of prices, and forsee them, all in accrodance with
> the labour theory.

Presume (safely) that we don't have a command economy. Are you not
basing your rejection of Bohm-Bawark's conclusion on the premise that
prices do track value in the Marxian sense? And is that not clearly
arbitrary? Forgive this rank amateur but how it can be proved
quantitatively? _Kapital_ is virtually empty of empirical content.

What is unclear is how Marx believed a command
> economy would calculate "labour-time." But the labour theory of value,
> on it's own, is not falsified by the fact that labour-time ratios can
> not be calculated in a command economy.

Value, not cost ratios.

They can be calculated in a
> market economy. In the project management industry, they have databases
> of such ratios, including not only differences among types of labour,
> but among labourers in different regions as well.

Aren't they simply trying to keep track of costs? Marx didn't equate
wages with value, did he? Isn't it quite the contrary? I'm not even
sure he clearly equated price with value.
>
>
> > Kolakowski, discussing Hilferding's defense of Marx, goes on to say the
>
> > he (Hilferding) accepts 1) and 2), above, but denies that they affect
> > Marx's theory, "since it does not purport to explain actual terms of
> > exchange but only to discover the general laws of change, and these
> > are subordinate to the law of value."
>
> I have no opinion on what Marx purports to explain, But if Hilferding
> really does accept that both 1 or 2 in someway disprove the labour
> theory then he is already wrong, because both criticisms have to do
> with the availabilty of value information in a command economy and not
> the labor thoery.

He doesn't admit the conclusion. He admits their truth, according to
Kolakowski. And the subject was the capitalist economy. I don't think
that anywhere in Marx there is a systematic treatment of the command
economy. He left that to the cook shops of the future.
>
>
> > Kolakowski then says: "We need only repeat here the remarks we have
> > already made in discussing _Capital_ (in Vol. I). In the empirical
> > sciences we generally define a law as a statement that in such and
> > such
> > particular conditions, such and such phenomena always occur. Clearly
> > the statement that the value of a commodity is equal to the amount of
> > socially necessary labour put into it is *not a law* but a definition
> > of value.
>
> Ok if he wants "such and such particular conditions, such and such
> phenomena always occur," here you go:
>
> In conditions where new supply can be added by the application of
> aditional labour, supply will always be added until the price retained
> by the supplier falls to the cost of that labour.
>
> That fullfils his "scientific" requirements.

No, you changed the subject. It might if it were possibly true in the
real world but it isn't. There are always more manufacturing inputs
than just additionsl labor and price doesn't respond just to labor
inputs. Accordingly your conclusion is arbitrary.

>
> This of course also includes the supply of inputs to such production,
> including Capital, but not land, which can not be created by labour, as
> it can not be created at all, and therfore has no "supplier."
>
> It also does not include artificial forms of Rent, like intellectual
> property and other legal barriers to competition, but this is beyond
> the scope of a value thoery.

The myriad inputs on both sides of the price equation would seem to
falsify the Marxian LTV but then I'm a rank amateur.

Thanks for the thoughtful reply,

Hunter

.

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