Michael (- here in Glasgow all Michaels are Micks) quotes me as saying: > the world market price of oil expressed in Nairas was greater ( after deducting the cost of imported means of production ) than the oil's labour value expressed in Nairas. to which he replies: to which I reply, "So what?" How do we know "the oil's labour value expressed in Nairas"? What we know is the oil's _price_, or its book cost, or whatever -- but only if we know a priori that the price, or whatever, simply _is_ its "labour value," do we know what Cockshott says we do. Paul now replies: Michael seems to be under the impression that labour values are unknowable. On the contrary they are in principle measurable, and are in practice so measurable in countries with developed systems of economic statistics. There now exists an extensive literature on the statistical techniques that can be used to measure them. The results of such tests are unequivocable and decisively confirm Ricardo's hypothesis that over 90% of variation in prices is explicable in terms of variation in labour content. These results hold true for all economies and all time periods for which the tests have so far been carried out. I do not have the necessary input output tables for the Nigerian economy in the late 70s to be able to give a figure for the specific value of oil as opposed to other commodities ( where specific value is value/price ratio ). However for countries where I have calculated it - The UK and Mexico in the 1980s, the specific value of oil fell below the mean of the economy by a massive amount. Since : 1. The UK is a high cost oil producer with oil fields in deep seas with very large labour inputs required to develop them, whilst Nigeria has predominantly onshore fields that are easier to exploit, it is reasonable to suppose that what applies to the UK applies even more strongly to Nigeria. 2. The relative world price of oil was higher at the time that Nigeria broke the cartel, then the period for which I have statistics, the hypothesis is further reinforced. It would therefore require something quite extraordinary about the Nigerian economy for oil prices to actually have been below their values in the mid 70's. Michael continues ------------------ As to the point he raised incidentally, I did not mention that, besides undercutting the cartel price, a member may cheat by exceeding his quota. Cockshott has not shown that Nigeria's decision to cheat by exceeding its quota needs a labour theory of value to be made. All he showed was that Nigeria thought it would make money by cheating. This is news? Paul ----- The point about the theory of value is that it explains why it was possible for Nigeria to make more money by selling more oil - because the price of oil was well above its value, there were big super-profits to be made on its sale. Under these circumstances the necessary conditionsfor monopoly rents in excess of differential rents did not exist
