Rod H. writes: > I must say that this discussion has left me baffled. It appears that all > parties are throwing words around without thinking. The nonsense that has > been written on the so-called transformation problem seems to have had a > pernicious effect on clear logic. > The labour theory of value is dead simple. If Rod's steps represent the logic that sustains it, the labor theory of value is simply dead. He writes: > Here it is in seven easy steps. > 1. Human societies live/survive by appropriating and transforming the > environment in a purposeful (teleologial) manner. I.e. they labour. > 2. That transformed state of nature has a value to society. The purpose > of the labour was to create a situation that is more valued than the > previous one. > > 3. Conservation (economizing) principle -- A viable society must create > enough value to continually reproduce itself. > > 4. Society is infested with parasites (capitalists, landlords, clergy, > university professors) who suck off the cream without contributing. > Therefore society must produce a surplus above what is needed to > reproduce itself. > > 5. Capitalist societies base decisions on how to allocate their value > producing activities on the signals received from prices. > > 6. Since capitalism appears (at least in the short run) to be a viable > system. Then prices must reflect something about values. > > 7. This is where the transformation problem comes in. Is the information > given by prices sufficient to allow society to get the message about > values? Price are the medium - Values are the message. And despite what > McLuhen says the medium is not the message. It is not a theory > of prices. It is a theory of how prices do their job. So never mind your > eraser theorems a la Samuelson. If you rub out values you rub out the > important half of the equation. Steps 2 and 3 equivocate on the meaning of "value". In particular, how a "society" "values" the transformed state of nature, whatever that might mean, has no particular connection to the "value" required to reproduce that society. For example, a society of Aesop's grasshoppers might "value" a social product which guarantees reproduction much less than a social product which imperils it. Furthermore, neither form of "value" need be expressed in the form of embodied labor, even explicitly acknowledging that labor is a necessary condition for production. To put it another way, that production requires labor is not an argument one way or the other for the labor theory of value. Whatever sense of "value" is invoked in step 5, it also has no necessary connection to value as measured by embodied labor. The "then" clause in step 6 expresses either an utter _non sequitur_ or a tautology. It's a _non sequitur_ if a systematic connection between prices and (independently defined) values--particularly values measured by embodied labor--is suggested. It's a tautology if it means that "prices which are consistent with viable (stable? persistent?) conditions of reproduction are viable." This tautology also does not require a reference to labor values. The argument in step 7 is similarly either a _non sequitur_ or a tautology. One could more appropriately substitute the phrase "viable conditions of (re)production" for "values", and lose nothing at all except some ambiguity. This is the point behind the Samuelson-Steedman "eraser theorems": The connection between prices and values is utterly idiosyncratic. Reference to labor values gives you no additional information at the microeconomic level at which Rod's steps 1-7 operate. Now, there may be a use for labor values in comparing macroeconomic aggregates, but I doubt that they are uniquely useful in that capacity. Gil Skillman
