Re: Leszek Kolakowski on the Marxian LTV

Hunter wrote:
> Quirk wrote:
> > Are we discusing Marx or the concept that the source of exchange value
> > is labour? I only have an opinion on the second, not the first.

> Marx.

I am not a Marxist, but rather a Libertarian Socialist, so my comments
on Marx can only be considered impressions.

The labour theory is something we do have in common, as does classical
economics.


> > At any given time yes, but over time the is driven to the equilibrium
> > cost which is labour plus rent. and Rent has no "supplier"

> Can you explain how, when in all given transactions price is a market
> response to far more factors on both sides of the equation than just
> labor, that when you strike some sort of mean or average all those
> other factors are somehow eliminated in the math and we've got only
> labor plus rent.

Production has only three factors, Land, Labour, and Capital. Land has
no supplier, so it has no true "cost" except whatever one has to pay
for ther privilege of accessing it, which is not really a contribution
to production but a granting of privilge, capital is simply the result
of labour being applied to land, leaving on labour as a true cost.

Labour is unique among the factors of production because only labour
experiences disutility, neither a shovel nor an acre of land need to be
compelled to contribute to production, thus neither can add any
exchange value, the source of exchange value is labour.


> > Yes they do, their labour is the product they bring to market.
>
> I'm talking about the market in commodities in the production of which
> labor is a component cost but not the whole.

In the capitalist mode of production labour is a commodity, or a set of
commodities. The market includes both the market for productive inputs
as well as outputs.


> > "value" is the amount of labour required to make something, plus whater
> > rent you have to pay for the privilege of making it.

> This is an assertion, not an argument.

It is a fact, can you provide an example of a productive input that has
a cost that can not be broken down into labour and rent?


> > > > 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.

> I don't perceive the command economy to be at issue here. Marx studied
> the capitalist economy. I'm interested in the validity of the LTV as
> adapted by Marx. It was in the context of his study of capitalism that
> he adapted the classical LTV to his purposes.

I'm not sure what unique features the Marxist LTV has. I know that Marx
introduced the concept of labout-time as a measure of value, but I
don't see how this affects the basic theory as held by Smith, Ricardo,
Hodgskin, Proudhon, etc.


> > > 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.
> >
> > Labour is the source of value. I'm not sure what you mean here.
>
> You make an assertion in your first sentence. It doesn't advance the
> argument. Bohm-Bawark, for example, pretty much destroyed it in roughly
> 1898.

I've explained my assertion, only labour experiences disutility, thus
only labour needs to be compelled to bring the It's product to market,
neither land nor capital experience disutility, so any cost paid is a
cost paid for the privilege of access, which is not really a cost of
production, but a temporary opportinity or a legal construct.


> > cost = labour, as rent is a cost that is legaly imposed, not a real
> > cost.

> Is the comopensation of white collar middle to upper management "not a
> real cost?" How about the cost of the law firm which helps the
> corporation stay aimed in the right direction?

Any human effort is labour.


> > That labour is the source of exchange value is a law.

> And whatever the price is at any given moment is the exchange value?

By definition, yes, that's why it is called "exchange" value.


> > I'm not sure what theory you want me to apply, however the labour
> > theory of value would mean that the value of any market good is based
> > on the amount of labour that is required to create it, plus whatever
> > rent must be made for the privilege of creating it.
>
> See the middle management/legal expense question above.

Labour is labour.


> > > > 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.

> Do you believe in the role of psychological factors in the market?

Yes, however only labour has psychological factors, neither land or
capital do.


> > When you subtract Rent, yes.

> But how can that be possible when the buyer has no knowledge of that
> information and has myriad reasons for needing or not needing a given
> commodity at a given time. You are dealing with a mere definition and
> giving no reason why it is not arbitrary.

The buyer buys according to marginal utility, that is true, however
unless their are barriers to competition, demmand will attract new
supply, which will push price towards cost.

As I said, at any given point price is set by the volume of demmand
that encounters the volume of supply, from that point forward,
competition drives price towards cost, rent drives price towards
marginal utility.


> > I don't know about proving things quantitatevily.

> But isn't this critical to applied economics which is after all an
> effort to both predict and shape the future.

Perhaps, but it is not my interest, if you are looking for
quantification, take a look at Leontief's input-output-model. I have no
opinion in this area.


> But where esle would
> > but where else would value come from?

> Have you read Bohm-Bawark's "Marx and the Close of his System," the
> 1898 critique of _Das Kapital"? He explains it quite elaborately. And
> Kolakowski is largely in accord. It's available on line.

Perhaps I will one day, but as I said, my interest lays with neither,
so I know their work mostly from citations.

Feel free to employ whatever part you think is usefull in this
discusion though.

In my opinion the Marginalist/Austrian theory of value is simply an
elaborate justification for theft.


> > The idea that it comes from
> > marginal utility in any case other than Rent is nonsencical, why would
> > I pay what something was worth to me, rather than what it costs to make
> > unless I had no choice?

> But you don't--if you need it and have been defeated in the
> negotiations with the seller.

Then the sellers profit would attract other sellers, driving price
towards cost.


> > Why would I have no choice unless new supply
> > was somehow impossible?
>
> New supply may well be more expensive. It's a gamble, a psychological
> game. Bohm-Bawark is known as an exponent of the psychological school
> of economics.

Only labour can gamble, or experience psychology.


> > Demand will encourage investment in creating more supply, this added
> > supply will drive price towards it's cost plus rent. Cost is labour
> > cost, there is not other real cost.

> You assert that cost is only labor cost. I don't know how you arrive at
> that interesting conclusiion. I also don't know whether you
> discriminate as to types of labor which may or may not consitute real
> cost. The Board of Directors, for example, labor once a month. There
> work is at times extremely important regarding the success of the
> corporation.

Labour is labour, just like Capital is Capital, and Land is Land.


> > > Value, not cost ratios.

> > The theory is that the value of any product is the labour cost.

> But you seem to mean that what ever the price is, that is the true
> labour cost.

Not at any given time, the price is driven towards labour cost by
competition, and towards marginal utility by Rent. So inorder to
determine Labour cost, you would need to subtract Rent.


> I'm sure you know that labor cost, i.e., wages and
> fringes, etc., is only one element in the complicated cost picture of a
> manufacturing operation.

Yet the exchange value of each component can be broken down into labour
and rent.


> > The
> > ratios in labour-time are simple labour to skilled labour, meaning for
> > instance how many hours of a dishwasher's time is worth one hour of a
> > sculptors time. Given market data, this is not hard to figure out.
>
> But that is just a function of what the owner has to pay differently
> skilled people to get them to come to work.

Right.


> I'm in New Orleans. The water is rising. Looters and other armed gents
> are appearing in the streets.

Sounds like you are in fable told by the racist media, not New Orleans,
where violent crime, not including State violence, went down in the
wake of Katrina, but anyway...


> I want very badly to go to Baton Rouge. I
> have no way to leave except to buy a car and drive. The only car left
> for sale is a new Cadillac Soup de Ville (The police have stolen all
> the others). It's sticker price is $45,000. The dealer smiles and says,
> "$75,000, take it or leave it." I take it and just barely get out of
> town in time. How much of that $75,000 was labor cost?

Whatever part is not Rent, is labour.

Specificaly, short-term scarcity rents on Capital are called
"quasi-rent" by Alfred Marshall.

As I said in the scientific definition you request, "when new supply
can be created by the application of labour..."


> > Right, illustrating that labour-time is not impossible to calculate in
> > a market economy, but rather that such calculations are common place.

> Calculation of labor cost is critical for management even when new
> contract negotiations are in order. Labor time of itself is of little
> use without numbers associated with it. And when numbers are associated
> with it they are only a part of the overall cost picture. Not only that
> but the manufacturer will almost never sell commodities for labor cost
> except in a bankruptcy liquidation so you know that it is not directly
> related to prevalent market value. Hence, labor cost can not be
> determinative in and of itself of price in the market, at least not in
> a manufacturing operation. Perhaps at a consulting firm, eh?

Not sure what you are arguing here. If they will not sell there product
for labour cost, some other supplier will, unless there is some barrier
to competition.


> > As I said, I don't know what Marx's puports to explain, however
> > Kolakowki's arguments, as you quoted them, do not refute the labour
> > theory of value, bur rather refute the notion that labour-time could be
> > calculated in a command economy.

> Please explain the importance of this and why it's true.

Because the arguments are all about information, AFAIR. If I have
missed an argument that actually addresses the labour theory, or
presents a source of exchange value except the disutility experienced
by labour, feel free to present it.


> > My impression is that you are correct about the command economy being
> > substantially developed by later "Marxists," but this does not stop
> > most critics of Marx and the labour thoery from attempting to pass off
> > refutations of the command economy as refutations of Marx and/or the
> > labour theory.

> I'm only interested here in the logical and empirical validity of
> Marx's take on the LTV.

As I mentioned, I do not know what unique features Marx's LTV had
compared to the LTV expressed by Smith, Ricardo, Hodskin, Proudhon,
etc.

Can you fill me in?


> > My impression is also that Marx is not blameless in this, and may not
> > have elaborated the command economy. but gave enough indications of the
> > authoritarian leanings in his work that the later work can not be said
> > to be totally out of the blue.

> That's for sure but Lenin added most of what resulted in Russia's
> holocaust.

I'm not so familiar with the forces at play in the Russian Revolutions
and Civil War to draw any meaningfull conclusions as to what the long
term impact of any one man was or wasn't.

Are you certain their would have been less terror and blood without
Lenin?

I will agree that it is clear that Lenin did not prevent the bloodshed
and injustice, it is not clear that he was it's cause, as we have no
idea what would have been otherwise.


> > Can you give me an example of a supplier that is not supplying labour?

> Under Marx? The "big bourgeoisie".

The grande bourgeoise do not contribute to production, there
"contribution" to production is providing access to property, therefore
the return they recieve is Rent.


> > Because there are many vested interest that want you to believe that
> > inanimate objects like land and capital need to be rewarded for
> > production the way labourers do to justify thet appropriation of the
> > product of labour by non-contributing owners of these inanimate
> > objects.

> You would destroy the real estate market when most of each middle class
> family's net worth is tied up in their home? How would you go about
> destroying that market?

Not sure what this has to with the topic of value. The elimination of
the private capture of rent would not harm the middleclass, who are
net-payers of Rent.

Regards.

.

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