GENIUS FORUMS

Hi,

as many of you know, the classical economists maintain that labor is the only essence of the economic value. I completely agree with that but, as everyone can see, the various currencies don’t express quantities of labor.
The reason is that the economic theory have a problem, the problem of transformation, that is, the problem to understand and represent the relationships between the prices of commodities, determined by the market and changing with distribution, and the quantities of labor that produce them, which don’t depend on distribution. Because of this problem the labor theory of value is just a theory, and the nature of economic value remains unknown.
I think (well, actually I am pretty sure) that that problem is caused by how the economists calculate value, which, ultimately, is the way they see the world.
Marx thinks that if a commodity is produced by using freely available natural elements, its value is just the quantity of live labor that produces it. If, instead, a commodity is made by using other commodities, or means of production, its value is calculated as the sum of the quantity of live, or new labor, directly employed in production, plus the quantity of labor previously spent to produce the used means of production, which value is considered as indirect, or dead, or crystallized, or embodied labor.
But this sum is impossible, doesn’t have mathematical sense, and therefore is cause of contradictions.
The most evident one is the fact that since the value of the produced means of production is equal to the value of the consumed ones, it implies that the net product’s value is equal to the totality of labor of the economic system. But since all the commodities, both consumer goods and means of production, are continually consumed and reproduced, if this were true the quantity of labor embodied in the consumed commodities would be period after period superior than the quantity of labor that produces them all. Even though the economists are aware of the identity between net product’s value and totality of labor, they don’t realize that this is an absurdity.
Instead, I maintain that since the exchange of commodities is nothing but the material aspect of the exchange of labor, the value of the gross product, obtained by the sum of the price of all the commodities and services exchanged in a given period of time, is always the representation of the whole time of labor which directly produces them, however they can be used and distributed. Prices always represent precise quantities of time of quantified human existence, fraction of the time of labor of the economic system, whatever they are used as means of production or consumer goods, and however their magnitude can change in order to ensure the condition of balance for different possible distributions.

You are invited to comment on Dualistic Monism and Labor Theory of Value and Absolute Prices: http://massera.interfree.it/index.html, where the above idea is completely explained and formalized.
Principles of Changes is a commentary of the basic I Ching philosophy that I used as a tool in those essays.

Why does the economic dimension of "Dialectical Monism" appeal to you more than its metaphysical/ontological?


Dan Rowden

Hi!

I don’t know why, but I have come to skip posts that look like one huge paragraph. May be it is the aesthetic value, or that after a while of reading I get lost as to which is the next line that makes coherent sense to the last line I read since they are all so close. Since your post does seem to make some sense, I will have to “translate” it a bit and then read. I hope you don’t mind.

----------------

Hi,

As many of you know, the classical economists maintain that labor is the only essence of the economic value. I completely agree with that but, as everyone can see, the various currencies don’t express quantities of labor.

The reason is that the economic theory have a problem, the problem of transformation, that is, the problem to understand and represent the relationships between the prices of commodities, determined by the market and changing with distribution, and the quantities of labor that produce them, which don’t depend on distribution. Because of this problem the labor theory of value is just a theory, and the nature of economic value remains unknown.

I think (well, actually I am pretty sure) that that problem is caused by how the economists calculate value, which, ultimately, is the way they see the world.

Marx thinks that if a commodity is produced by using freely available natural elements, its value is just the quantity of live labor that produces it. If, instead, a commodity is made by using other commodities, or means of production, its value is calculated as the sum of the quantity of live, or new labor, directly employed in production, plus the quantity of labor previously spent to produce the used means of production, which value is considered as indirect, or dead, or crystallized, or embodied labor.

But this sum is impossible, doesn’t have mathematical sense, and therefore is cause of contradictions.

The most evident one is the fact that since the value of the produced means of production is equal to the value of the consumed ones, it implies that the net product’s value is equal to the totality of labor of the economic system. But since all the commodities, both consumer goods and means of production, are continually consumed and reproduced, if this were true the quantity of labor embodied in the consumed commodities would be period after period superior than the quantity of labor that produces them all. Even though the economists are aware of the identity between net product’s value and totality of labor, they don’t realize that this is an absurdity.

Instead, I maintain that since the exchange of commodities is nothing but the material aspect of the exchange of labor, the value of the gross product, obtained by the sum of the price of all the commodities and services exchanged in a given period of time, is always the representation of the whole time of labor which directly produces them, however they can be used and distributed. Prices always represent precise quantities of time of quantified human existence, fraction of the time of labor of the economic system, whatever they are used as means of production or consumer goods, and however their magnitude can change in order to ensure the condition of balance for different possible distributions.

Athos

.

Athos,

As many of you know, the classical economists maintain that labor is the only essence of the economic value. I completely agree with that but, as everyone can see, the various currencies don’t express quantities of labor.

I’m not an economist, however, are you suggesting that there be one currency world wide, irrelevant of the abundance/scarcity of any particular natural resources any particular country holds, and irrelevant of what product or quantity thereof which depends on the size of available labor, Or are you suggesting that we dissolve all the borders in favor of one world economy?

.

Sapius, thanks for your replay.

Well, every nation knows the price of its gross internal product and the corresponding quantity of time of labor, so it would be easy to calculate the value of all the currencies in terms of quantities of quantified human existence.
Theoretically this would lead to a only one currency in the whole world indicating its real, absolute value, so that there would be no borders, no inflation, and everyone would know what quantity of labor receives from society in exchange for his labor for society. Everything would be crystal clear.

But I don’t think this is possible. I would like to explain why, but this requires the answer to other questions:
If both economic and non economic relations are aimed toward the satisfaction of needs and the realization of well being, why some of them are treated in quantitative terms and some are not? When and why humans started to treat their relationships in quantitative terms? How quantification affects quality? What is the influence of the quantification of human life on social evolution? And what is the relation between the fact that humanity is destroying herself and the fact that society is unable to define the nature of economics and economic value?
It would be useless to try and answer these questions if we are not sure that we share the same definition of the field of economics and economic value. That’s why I whish you read Dualistic Monism & LTV and at least the Preface to Absolute Prices and tell me what you think.

Athos,

Theoretically this would lead to a only one currency in the whole world indicating its real, absolute value, so that there would be no borders, no inflation, and everyone would know what quantity of labor receives from society in exchange for his labor for society. Everything would be crystal clear.

But I don’t think this is possible. I would like to explain why,

Not possible? Why, all you have to do is study the internal economics of Europe. How is it fairing is another story.

However, as I mentioned earlier, I’m no economist, neither is any one here in my opinion. So I don’t think you will get much response in that regard.

Try to answer Dan's post if you will.

I don’t think you will get much response in that regard

Ok, I tried, you never know