LTV, again

[trivas7]

From OI the following:


Well the LTV is unprovable, like all theories of value ('value' is a normative term, so it's hard to prove it corresponds to one thing or another.) It is, though, falsifiable.

Does this make sense? Has the Labor Theory of Value been falsified? By whom?

[mikelepore]

I support the theory for its unifying and predictive powers, but I admit it has the fault of not being falsifiable. It's not falsifiable because it postulates a value as the starting point from which a price has departed due to the random noise of supply and demand. No matter how large the discrepancies anyone finds in the real marketplace, any amount of the discrepancies may be due to the random noise term, so that the equilibrium level from which those prices departed is unknown. The theory is all about something that can't be measured. It's is like a pendulum hanging in a hurricane; we know it must have an equilibrium point but we never see it there.

[mikelepore]

The writer will never understand the theory if he thinks "value" is a normative term. Sometimes a words has more than one usage: a pen is a writing instrument, and a pen is also a cage for animals. If the writer wants to use the normative meaning of "value", then he's not discussing the economic theory. He's like the guy who allowed the ambiguity of words to confuse him, and he's trying to figure out how amimals can be kept in a writing instrument.

[Die Neue Zeit]

You two might wish to look more into Paul Cockshott's papers on LTV, actually:

http://209.85.173.104/search?q=cache:IEUvWFIYhOMJ:reality.gn.apc.org/econ/DZ_article1.pdf+cockshott+ltv&hl=en&ct=clnk&cd=9&gl=ca&client=firefox-a
http://www.wfu.edu/~cottrell/wpc_ac/wpc_ac.html#tth_sEc4

[trivas7]

I support the theory for its unifying and predictive powers, but I admit it has the fault of not being falsifiable. It's not falsifiable because it postulates a value as the starting point from which a price has departed due to the random noise of supply and demand. No matter how large the discrepancies anyone finds in the real marketplace, any amount of the discrepancies may be due to the random noise term, so that the equilibrium level from which those prices departed is unknown. The theory is all about something that can't be measured. It's is like a pendulum hanging in a hurricane; we know it must have an equilibrium point but we never see it there.
This isn't my understanding of LTV, at least not in Capital. OTC, Marx goes out of his way there to say that labor intrinsically is not a value from which one can extrapolate a price.

[Yehuda Stern]

I support the theory for its unifying and predictive powers, but I admit it has the fault of not being falsifiable.

That is only a criterion for the most crude rationalists. In order for a theory to be scientifically viable, we must only be able to prove its correctness. Otherwise, mathematics from the bottom up, for example, is unscientific.

[trivas7]

That is only a criterion for the most crude rationalists. In order for a theory to be scientifically viable, we must only be able to prove its correctness. Otherwise, mathematics from the bottom up, for example, is unscientific.
But AFAIK math is in fact not a scientific discipline. It is used by the disciplines, yes, but I doubt but few math gurus would call it a science.

Are you saying that LTV is a scientific truth?

[mikelepore]

"The relative value of products is determined by the labor time required for their production. Price is the monetary expression of the relative value of a product." - Marx, in 'Poverty of Philosophy' ... "The value (the real exchange value) of all commodities (labour included) is determined by their cost of production, in other words by the labour time required to produce them. Their price is this exchange value of theirs, expressed in money." - Marx, in the 'Grundrisse'

However, the price can be temporarly or even permanently moved from the position where it might indicate the value. Labor power is an example of a commodity whose price has been artificially lowered for over a hundred years due to excessive supply relative to demand (unemployment). For most simple commodities, a graph that the commodity traders call a moving average, with a sufficiently long term, perhaps thirty years, gets us close to communicating the value.

In many cases the correlation between labor and price is recognizable even without specific price data; for example, only one ounce of gold comes out of thirty tons of gold ore, and we all know approximately where that metal's price sits compared to metals that require less labor time per unit mass.

[trivas7]

In many cases the correlation between labor and price is recognizable even without specific price data; for example, only one ounce of gold comes out of thirty tons of gold ore, and we all know appriximately where that metal's price sits compared to metals that require less labor time per unit mass.
AFAIK you're speaking of labor-power, not labor as such:


That which comes directly face to face with the possessor of money on the market, is in fact not labor, but the laborer. What the latter sells is his labor-power. As soon as his labor actually begins, it has already ceased to belong to him; it can therefore no longer be sold by him. Labor is the substance, and the immanent measure of value, but has itself no value.

K. Marx, Capital Vol. I, Chap. 19

[Rosa Lichtenstein]

Ask Comrade Red, he is the expert here on this.

[ComradeRed]

Well the LTV is unprovable, like all theories of value ('value' is a normative term, so it's hard to prove it corresponds to one thing or another.) It is, though, falsifiable. Tough to really say here but I think the general aim of the argument is this: "You can't prove it's true, you can only prove it's false." There's nothing about it being false in the quote.

It actually is remarkably accurate, it's about 95% accurate (http://homepage.newschool.edu/~AShaikh/labthvalue.pdf)...in comparison, vulgar economics' accuracy is a statistical anomaly! :lol:

But it has not been falsified, no, but there is a bit of math supporting it from a vast number of people...

[mikelepore]

When it's for sale on the labor market, it's "labor power". When the worker is extracting a mineral, etc., it's "labor".