Kantorovich disproves Labor Theory of Value

[Conquer or Die]

http://www.history.com/encyclopedia.do?vendorId=FWNE.fw..ka007850.a#FWNE. fw..ka007850.a


he wrote other works demonstrating the use of the programming in economic planning, which is based on a rational price system rather than the Marxist labor theory of value, the best known of which is The Best Use of Economic Resources (written 1942, published 1959; trans. 1965). In various government positions, he advocated partial decentralization of the centrally-planned Soviet economy, and applied his methods in planning the economy for the military during World War II; he also trained other economists to follow his applications after the war.

http://www.economictheories.org/2008/07/socialist-resource-allocation-in.html


The labor theory and planning. We have seen the difficulty in using the labor theory of value to arrive at market prices. At first, planners tried to keep their plans consistent with the labor theory of value. That changed over time. The assault on the labor theory of value came about not as a broadly conceived thrust but as a byproduct of attempts to solve everyday problems in planning. The strength of ideology and the authoritarian nature of the Soviet system are evidenced by the time lag between the publication of papers in 1939 by L. V Kantorovich, who later was awarded a Nobel Prize, and V V Novozhilov, and the fuller discussion of these issues that began with Khrushchev's sanction in the early 1960s. These men were the first to implicitly question the labor theory of value.

Shadow prices. Kantorovich, a mathematician by training, was asked to help solve a scheduling problem in the plywood industry. Soviet mathematicians long before had developed certain techniques that could be applied in industry. Because the particular problem presented to Kantorovich was not adaptable to existing techniques, however, he developed a new method for its solution. Kantorovich thus became the originator of linear programming, a technique independently discovered in the United States in 1947.

I've read some of Cockshott and I can't draw a connection between what he has said and the argument that this supports LTV in light of these two sources. I also don't understand how LTV is disproved, either.

[anticap]

Attacks on the LTV are nothing more nor less than attempts to justify the existence of the capitalist class. There's simply no reason to attack it unless you seek to deny that the working class is the sole contributor to production and is thus due the full value of all that they produce.

It is self-evident that labor produces everything that is produced. Neither capital nor land produce anything; they are merely resources used by labor. But there are leeches called "capital-ists" and "land-lords" who fancy themselves the personification of capital and land, and thus fancy themselves to have contributed to production.

Who gives a flip how to get from the self-evident fact that labor is the sole producer, to a determination of market prices? The question takes the market for granted, but why? Communists want to abolish the market, not perpetuate it.

The salient point of the LTV is that, market or no market, price or no price, workers produce everything. However their product is allocated, nobody but they are entitled to a cut.

[ComradeOm]

Kantorovich did not "disprove" anything and nor did he set out to. His 'shadow prices' are not monetary prices but rather numerical weights used in his operational research models. They reflect constraints on the system (features notably absent from the earlier Five Year Plans) and prioritisation of resources. Such weights are an integral aspect of linear programming

This isn't the first time that I've seen this charge but I believe that it stems from an effort to portray Kantorovich, an undoubted genius, as some sort of subversive chaffing against ideological constraints. It no doubt irritates Mises loving fools (like the author of that blog) that such a figure could so profoundly disagree with their own conclusions and theories

[Paul Cockshott]

He did not disprove LTV, actually afirmed support for it. His ODVs are short term deviations from labour values that arise when certain inputs are not freely reproducible in the long run.

[Paul Cockshott]

whoops. That should read - not freely reproducible in the short run.