For the people who are saying "value theory has some utility, as it demonstrates the basic concept of exploitation, but you shouldn't be trying to match up SNLT and phenomenal prices in this way," are you saying "SNLT only corresponds to prices under highly idealized and unrealistic, albeit illustrative conditions (intertemporal equilibrium with no barriers to entry or unexpected shocks, &c.)" (which is what seems to my untrained mind what Marx is saying, and which I take to be the position of the defenders of Marxian economics as such here) or "value theory is just a sort of moral fable that tells you workers are getting it raw, but it won't help you do positive analysis of the real world?"
On Jul 20, 2010, at 7:34 PM, Mike Beggs <mikejbeggs at gmail.com> wrote:
> On Tue, Jul 20, 2010 at 5:03 PM, Matthias Wasser
> <matthias.wasser at gmail.com> wrote:
>
>> So either a) Wikipedia is misrepresenting the issue, b) I'm making
>> some
>> glaring logical error, or c) I am the smartest person in the world.
>> (c)
>> seems rather less probable than the alternatives. If (a), what's a
>> better
>> summary? If (b), what embarrassing thing am I doing wrong?
>
> I agree with others that the transformation problem is a swamp into
> which you don't want to get dragged. But you're basically asking 'why
> is there a profit rate at all?', or at least 'why is it exogenous?'
> The wikipedia article doesn't address this at all, but maybe it
> doesn't need to - because it's really a separate issue from the
> tranformation, which takes a profit rate for granted - it's exogenous,
> like you say.
>
> I think the basic answer is that producing capital uses real resources
> and time, for which there are opportunity costs. So to get more arrows
> made, the entrepreneur has to get hunters to switch from hunting, but
> pay them at least the real wage they would have got hunting. So they
> will still consume as many beavers and deer as previously, but there
> will be fewer hunters 'producing' beavers and deer. So to make the
> story complete, you also need to know things like
>
> - how many deer and/or beavers per day do people need to live on?
> - how many deer and how many beavers can hunters catch on average in a
> day without arrows, and with arrows?
> - how many arrows have already been accumulated?
>
> The thing that stops people making infinite arrows (capital) and
> driving the profit rate down to zero is that accumulation of the
> arrows requires the diversion of workers away from hunting. In the
> example you get from Wikipedia, it seems there is no wage-labour so
> 'workers' and 'entrepreneurs' are the same people. In that case, there
> would be a tendency for any switching of effort to arrows to drive up
> the arrow-price of deer and beavers - and the limit point would be
> such (factoring in depreciation) that the rent of arrows would equal
> their (marginal) productivity in deer and beaver 'production', i.e.
> the extra amount of deer/beavers a single hunter can catch on average
> with an arrow over what they can catch without an arrow.
Right. I'm assuming the system is Pareto optimal. If it is, shouldn't h + r tend towards 1 for the same reason that economic profit tends towards zero in neoclassical economics (under the right conditions?) If all goods are reducible to labor (no worries about finite deer) and we can freely switch between production of them prices should equilibrate proportional to labor costs, or there would be Pareto efficient moves available.
This should apply whatever the values you impute to needed meat per day, &c. There is the special case of e.g. all labor-power is currently employed hunting subsistence levels of meat, and fletching now (and letting a few people starve) will let us get to a new level where we can permanently expand, which of course has some important parallels in real-world primitive accumulation/accumulation by dispossession, but which I assume we're abstracting away from in the ideal case.
>
> In the wage labour case - i.e., all hunting and arrow-making is done
> by employees of capitalists - the wage rate becomes an endogenous
> variable too. Arrow-making capitalists compete with hunting
> capitalists for workers, and if accumulation of arrows happens too
> fast, it tends to drive up beaver/deer-wages, cutting into the surplus
> capitalists end up with to devote to arrow accumulation. (This is the
> mechanism Marx emphasised.)
>
> Mike Beggs
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