Table Of ContentOn the I m p l i c a t i o ns of R u b i ns
E x p o s i t i on of A b s t r a ct L a b o ur
Ajit Kumar Chaudhury
This paper extends the Marxian concept of abstract labour on the line proposed by Rubin. The object of the
extension is to review the recent debate on the issue, and the related questions that follow, in the light of Rubin's
treatment of the subject. The author's focus is on the qualitative value problem; the quantitative aspects are
peripheral to the main thrust of this paper
The paper is divided into three sections. Section II outlines the essentials of the Marxian concept of abstract
labour as elaborated by Rubin. The limitations of Rubin's analysis are pointed out and possible modifications
are examined. The implications of Rubin's analysis, in the context of the recent debate on value theory, have
been worked out in section III
Consequently, it considers the phenomenon socially homogeneous labour under capita-
Introduction
of'deskilling' to be the central moment of lism. Such a concept of bourgeois equality
THIS paper deals, primarily, with the theme the abstraction. By contrast, Rubin em- is realised in the exchange of commodities
of abstract labour. As Marx's trenchant nine- phasises the qualitative variation between the that the market deems to be of equal
teenth century critic, Bohm-Bawerk, pointed 'simple labour' employed in different bran- value—i e, through an objective process. The
out, the fundamental problems of Marx's ches of production. Simple labour, in other idea, thus, is realised in the act of exchange;
theory of value arise right at the beginning words, is not considered homogeneous. the realisation on the other hand presup-
of volume I of "Capital", in the first few Rather, it is the equalisation of labour bet- poses the idea. Consequently, the idea of
pages of chapter I. The paper takes up this ween the different branches that emerges as equality in the ultimate analysis is epitomis-
question—the qualitative value problems— the key problem and the process of reduc- ed in money. Money, paradoxically, is the
the central issue of the debate in recent years. tion in skill is subsumed with it. In this great equaliser in a capitalist society.
Needless to say, the battle cannot be fought connection, Rubin analysis the following
within the terms of bourgeois economics, analytical categories of labour, Abstract labour
without calling into question its defining
(i) Social labour (SL) Abstract labour, according to Rubin, is the
characteristics. There arc reasons to believe
(ii) Socially homogeneous labour (SHL) form assumed by socially homogeneous
that the defining characteristics inhere in a
(iii) Abstract labour (AL) labour in a capitalist society. The equalisa-
particular problematic of Marxist discourse
tion of labour under capitalism which, as
itself that gained supremacy during the thir- Social labour
already indicated, is mediated by the equali-
ties and gradually established its hegemony
Capitalism discards all principles of direct sation of commodities in the market, stands
the world over and which persists to this day
social co-ordination of labour. Labour above all differences in caste, creed and oc-
among all sections of Marxists, revisionists
undertaken on private account, becomes cupation. The idea of equality extends on
as well as revolutionaries. The paper is a
social only through the mediation of ex- a formal plane to the relation between the
modest endeavour to come out of this pro-
change. This is in direct contrast to the labourer and the capitalist as the seller and
blematic and, thus, an attempt to resurrect
organisation of labour under various pre- buyer of labour power. The idea of equality,
an yet older tradition of Marxist analysis,
capitalist societies where the system of kin- rooted in the pre-history of mankind and
rooted in the theoretical discourse of what
ship or caste hierarchy lays down rules of resurrected by Christianity as equality in the
can be termed as the pre-Stalin period. In
immediate social supervision. Social labour eyes of God, appears here as equality before
particular, the paper extends the Marxian
is universal, though it takes on different the state, as realised in the concrete process
concept of abstract labour on the line pro-
forms in different societies. The purpose of of exchange. Philosophy is rewritten; God
posed by Rubin. The object of the extension
theoretical analysis is to lay bare the sepcific is no longer the substance, neither is Reason.
is to review the recent debate on the issue,
form of social labour. The substance is abstract labour.
and the related questions that follow, in the
light of Rubin's treatment of the subject.
Abstract labour, consequently, is not a
I concentrate on the aspects of Rubin's Socially Homogeneous labour physiological concept; equal labour, in this
analysis that have a bearing on the recent Socially homogeneous labour is the case, does not necessarily imply expenditure
debate. The focus is on the qualitative value specific form that social labour assumes of an equal amount of physical energy.
problem; the quantitative aspects are peri- under specific social conditions. Not in all Rather, it pertains to the standards of a
pheral to the main thrust of this paper. societies is labour socially equalised. Of specific society as judged by the norm of the
The paper is divided into three sections. Sec- course, socially homogeneous labour, market, i e, as determined by a specific social
tion II outlines the essentials of the Marx- though not pertinent to all epochs, does process. Thus abstract labour is not a simpli-
ian concept of abstract labour as elaborated cross the analytical frontiers of capitalism. fying assumption invoked to facilitate the
by Rubin. In this context, the section points Rubin, here, introduces a distinction between analysis of capitalism. It is, instead, a real
out the limitations of Rubin's analysis and the subjective and objective processes of process, taking place in an exchange eco-
possible modifications, A particular interest equalisation. In a socialist society, for ex- nomy where commodities have equal status
of the section is to examine Diane Elson's ample, labour is equalised through the cen- and therefore the labour that produces these
suggested modifications of Rubin's analysis. tralised planning programme undertaken by are treated as equal from the formal stand-
The implications of Rubin's analysis, in the the ruling party—usually a communist one. point. Further, the real process, as described
context of the recent debate on value theory, The plan, here, realises the content of the by Rubin, is distinct from the one outlined
have been worked out in section III. equality as defined by the party programme; by Sweezy et al The real process, in Sweezy's
the direct social supervision of the planning case, equalises the physiological labour em-
authority in order to realise such an equality bodied in a commodity through the develop-
II
underlines the 'subjective' character of the ment of machinery. In manufacture there is
Rubin on Abstract Labour process. Alternatively, a formal equality, en- a difference between the skills of labour
dorsed by an impersonal civil law enforced employed in the different industries. As
TVaditional Marxist discourse identifies
by the state constitutes the content of machines gradually establish their imper-
abstract labour with simple/unskilled labour.
Economic and Political Weekly, Vol XXI, No 4
PE-40 Review of Political Economy, January 25, 1986
ECONOMIC AND POLITICAL WEEKLY Review of Political Economy January 1986
sonal rules, the labour process becomes the problem of heterogeneity of capital in sion of classical economists with this pro-
devoid of skills and 'abstract labour' makes the context of distribution theory. The pro- blem culminates in the work of Bohm-
its appearance in the form of the standar- blem of heterogeneity of labour also does Bawerk who charges Marx's account of
dised work done per clock-hour. Abstract not pose much of a problem in Ricardo's equalisation of labour on the basis of ex-
labour, in Rubin's sense, on the other hand, model, inasmuch as Ricardo could assume, change as being guilty of circular reasoning.
does not have such a physico-empirical on the basis of empirical observations, In contrast, Marx was referring to a dif-
measure that can be captured by a mechani- relative wage to be fixed. Thus, according ferent notion of equality that may be traced
cal clock and has to be graduated on a to Ricardo,1 back to Rousseau and Hegel. Unaided by a
socio-temporal scale. The issue, however, is The estimation in which different qualities theoretical understanding of the process of
not elaborated any further. of labour are held comes soon to be adjusted exchange, Rousseau's admirable critique of
in the market with sufficient precision for all
equalisation of labour overlooks the positive
practical purposes, and depends much on the
PRIVATE LABOUR AND ABSTRACT LABOUR aspects of the implicit concept of equality
comparative skill of the labourer and inten-
Private labour is labour by private in- sity of the labour performed. The scale, when itself. At the other extreme, all contradic-
dividuals in a double sehse. Individuality, in once formed, is liable to little variation. If tions resolve themselves in Hegel's concep-
the negative sense, is freedom from com- a day's labour of a working jeweller be more tion of abstract labour. Matx's concept of
munal or personal ties while its positive con- valuable than a day's labour of a common AL, though developed along the lines of
tent is ownership of property. The former labourer, it has long ago been adjusted and Hegel and Rousseau, is not a synthesis of
establishes men as free subjects under an placed In its proper position in the scale of the two, and also is distinct from the quan-
unpersonal system of civil law. The latter values. In comparing, therefore, the value of titative notion of equal labour in CPE.
gives an objective content to the subjective the same commodity at different periods of Quantitative aspects of AL assume impor
individuality. Labour of free subjects time, the consideration of the comparative tance at a later stage of Marx's analysis; and,
abstracted from its objective content can skill and intensity of labour required for that as we shall see later, this 'quantity' is also
only be in the domain of heterogeneous particular commodity needs scarcely to be distinct in meaning from quantity as under-
forms of concrete labour. Private labour attended to, as it operates equally at both stood by the classical economists.
defined by the double aspect of individuality periods.
is necessarily homogeneous and therefore MARVS EXPOSITION OF ABSTRACT
Smith also treated the problem of equal
with an intrinsic cardinal measure. All LABOUR
labour in the same spirit. For example, he
labour is then, by definition, labour of free
wrote, Much of the confusion over the concept
subjects producing property as the common
form of product. Stated alternatively, labour It is not easy to find any accurate measure, of abstract labour could have been avoided
is homogeneous from the double viewpoint either of hardship oringenuity. In exchang- if Marx had started from the bourgeois no-
of origin and realisation. Such a notion of ing, indeed, the different productions of dif- tion of equality and freedom. Instead, Marx
private labour is also appropriate in the ferent sorts of labour for one another, some started from commodities—from exchange
allowance is commonly made for both. It is and exchange ratios—and on its basis deve-
sense that exchange involves only the pro-
adjusted, however, not by any accurate loped the idea of bourgeois equality and
perty, discussion of products.
measure, but by the higgling and the bargain- freedom simultaneously with its critique. In
Private labour contains the basis of ing of the market according to that sort of discussing exchange, one has to bear in mind
becoming social in the alienability aspect of rough equality, which, though not exact, is that the exchange ratio in Hegel is a quali-
property. However, the definition is without sufficient for carrying on the business of tative entity Quality is understood here as
the actual becoming into social labour. The common life. an internal determination that is identical
concept of abstract labour incorporates this It is apparent that the concept of equal with the being it determines. Quantity on the
actual becoming; it is defined as private labour in classical political economy (CPE) other hand is ah external determination.
labour becoming social through equalisation is a theoretical approximation of an em- However, in a particular category of quan-
with money in the expression of exchange- pirical quantity It is this idea that can be tity, the ratio, quality re-emerged. The ratio
value. The character of private labour gives found in a developed form in the conven- then is a unity of quality and quantity
abstract labourits intrinsic measure while tional literature on Marx's abstract labour. (... an unity that is reflected in . its
the process of socialisation supplies its real It has been argued, for example, that measure).1
measure in money. Private labour presup- through the analysis of reduction of skilled
Since the exchange ratio, like any other
poses an impersonal system of civil law and labour to unskilled labour, Marx laid a
ratio in Hegel is also qualitative, it is quite
social labour presupposes exchange-value. material foundation to the concept of equal
likely for a student of Hegel to probe into
There cannot thus be any formal determina- labour in CPE. The Marxian concept of AL
the qualitative aspects of the exchange ratio.
tion either of exchange-value by abstract is thus presented as an extension of the
Hegel was probably interested in the issue
labour or of state by economy classical concept of equal labour.
himself. Lenin for example mentioned in his
Marx, as is apparent from Rubin's analy- Philosophical Notebooks that
RICARDO, SMITH AND MARX ON sis of abstract labour, approached the pro- regarding the question of measure it is not
EQUAL LABOUR blem from a fundamentally different without interest to note the remark made in
Marx's concept of abstract labour/equal angle.2 The starting point in Marx's passing by Hegel that 'in developed civil
labour is usually viewed as an extension of analysis is the concept of AL in the sense society aggregate of individuals belonging to
the concept of equal labour in classical of Hegel. While probably connected with the different trades are in a certain relation to
political economy Ricdrdo, for example, was concept of equal labour, it has, however, ab- one another.
aware of the implications of the hetero- solutely no relation to the equality as Implicit in exchange ratios are these
geneity of labour. He, however, viewed the perceived by classical political economy. relations—a quality Science required that
problem of equalisation of labour from the Abstract labour, for Marx, implies equality this quality be explained. It is this philoso-
standpoint of his theory of distribution. The in the eyes of law, in the sense of equal rights phical position that leads Marx to analyse
problem of distribution between capital and in a contract. "Capital" examines the pro- value as a quality.
labour cannot be posed, in terms of the blem of realisation of this equality in the Now exchange value refers to the exchange
analytical tools available during Ricardo's context of a capitalist society. Marx is hardly ratio between two commodities. In order to
time, unless both are shown to be homo- dealing here with the problem of hetero- be comparable commodities exchanged
geneous on a theoretical plane. Equalisation geneity of labour across occupations in the against one another must have something in
of the rate of profit simultaneously solves sense of the classical economists. The obses- common. This is equal labour or abstract
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Review of Political Economy January 1986 ECONOMIC AND POLITICAL WEEKLY
labour For example one ton of iron and one rather than wealth of nations. Therefore, CRITIQUE OF DIANE ELSON
ton of coal are physically comparable in Marx writes,
While Elson follows in many respects she
terms of their common weight. Marx then Whatever its social form may be, wealth
analyses the common element in exchange always consists of use-values, which in the departs in her conceptualisation of AL as
ratios, i e, equal labour/abstract labour, It first instance are not affected by this form. pertinent to all epochs. Elson adheres to
is not merely labour in general that gives AL From the taste of wheat it is not possible to Marx's contention that the problem of
tell who produced it, a Russian serf, a French labour time is valid for all societies while the
its comparability. Abstract labour is specific
peasant or an English capitalist. Although law of value is specific to capitalism. This
to capitalism. It is the equality in the eyes
use values serve social needs and ther fore ex- suggests the conclusion that in Marx, the
of law that makes commodity production
ist within the social framework, they do not category of value and the category of AL
viable, and along with it the realisation of
express the social relations of production... are derived through alternative routes. Con-
the concept of equal labour. The circle
To be a use-value is evidently a necessary pre- sequently, the problem of allocation of this
then is complete: Commodity Ex-
requisite of the commodity, but it is im- labour-time common to all epochs is endors-
change ratios® Quality® Value®Equal
material to the use-value whether it is a com- ed here by a concept of labour in general'
modity. Use-value as such, since it is indepen- that is itself valid for ail epochs. This 'labour
dent of a determinate economic form, hes in general1 is Elson's abstract labour.
outside the sphere of investigation of political
The citation from Marx, however, does
Next we intend to examine the reaction economy
not necessarily imply a concept of AL that
between quantity and quality in the current
is valid across epochs, It is true that Marx
literature on the subject. It is acknowledged
RUBINS DILEMMA writes,'5
here that in order to be measurable, exchange
ratios must contain something in common, A captive of his times, Rubin fails to ap- The economy of time, ultimately all
viz, abstract labour. However this in itself preciate the philosophical implications of his economy, is reduced to this. Society must
is incomplete and taken to its extreme may own theory. A distance separates his novel distribute its lime functionally so as to ob-
lead to the depoliticisation of Marx and turn theoretical frame from his orthodox philoso- tain a production in accordance with all its
"Capitar into an exercise in method. It is phical position. Abstract labour is actualised needs; so the individual must also divide his
necessary to emphasise here that the proper- in exchange. Logically, this implies that there time correctly to acquire knowledge in the
ty common to commodities is not merely cannot be an external measure of AL prior right proportion and to fulfil the various
labour in general but equal labour as it ap- to exchange. Rubin here faces the dilemma: demands on his activity In conditions of pro-
pears in a specific society—civil society— "Only exchange brings about this equalisa- duction in common the first economic law
and is therefore endowed with a special tion, How can we reconcile these statements remains, therefore, the economy of lime, the
quality—the quality of individuals con- of Marx with the basic view that value is planned distribution of labour-time between
sidered to be formally equal. The emphasis created in exchange? It is hard to reconcile the different branches of production. But all
here is on the issue of equality and freedom these views." this is quite distinct from the measurement
and not on cornmensurability. As such star- of exchange values by labour-time.
ting from an analysis of equality and Rubin is unable to reconcile this because However, 'time' here does not refer to clock-
freedom, Marx shows how freedom in a he docs not examine the philosophical no- time; instead, it is to be understood in a
capitalist society implies its negation -the tion of measure. In this respect, Diane socio-temporal sense. Time corresponds to
legation of that freedom—and ultimately Elson's analysis is a significant improvement the theoretical space; as the space of correla-
the negation of the negation—socialism. over Rubin's. Elson, following Marx, in- tions changes, so does the meaning of time.
troduces two notions of measure—external Social time, therefore must be understood
measure and internal measure. Thus while in the context of some specific society. What
WHY UTILITY IS NOT A MEASURE OF
value itself has an internal measure that capitalism considers to be a drifting or lazily
VALUE
relates to production, value magnitudes give paced life, for example, may constitute for
Utility like abstract labour ensures com the external measure that follows from ex- some pre-capitalist people a reasonable
mensurability and therefore has the claim to change. Value magnitudes consequently can- social tempo. Time is understood in relation
be a measure of exchange ratios; it also not be defined independently of exchange, to change, i e, to the transformation of the
satisfies the condition of equivalence in it is only after the mediation through ex- objects under studies. The objects change
terms of marginal utilities. Marx rejects change that one can attribute a quantitative across societies inciting a change in the
utility as a measure of value because it is dimension to such magnitudes. meaning of time itself. Capitalism may not
not consistent with his philosophical pre- appreciate the social dynamic articulated
suppositions and consequently his know- In the concluding portion of his analysis, through dances and other spontaneous
ledge object. This philosophical position Rubin in essence abandons his theory of AL. orgies associated with the tribal rituals of
that society is prior to individuals and not The problem of distribution of social labour sacrifice. But that, by itself, cannot deny the
merely an aggregate of individuals is a pre- is presented here as a distribution of con obvious value of the time spent on such
supposition rather than a proposition in crete instead of A L. An attempt is also made activities, in the organisation of these anti-
"Capital". Utility, in the concrete, refers to to reconcile the theory of S and D with quated' modes of social reproduction. As
individuals and implies a description of Marx's theory of prices of production. theory seeks to analyse the distribution of this
society as a mere aggregate of individuals Prices emerging from the intersection of S social time that is contingent on the par-
unless one assumes that the individual refer- and D are, according to Rubin, unstable ticular social pattern, an invariant concept
red to is representative in some sense. Thus prices—as they do not guarantee the equali of general labour time, like Elson's, is easily
starting from utility one cannot make a valid sation of the rate of profit. Consequently seen to be a contradiction. This departure
abstraction and remains a prisoner of the capital moves across sectors, supply curves from Rubin's concept of abstract labour has
concrete. Utility, in the concrete is common change. Thus the supply-demand model several consequences. To start with, the
to all epochs and consequently fails to cap- throws up ever-changing equilibria and distinction between socially equal labour
ture the specificity of capitalism. Marx stability is reached only with the establish- and abstract labour, the two key concepts in
therefore rejects utility or use-value in ment of a uniform rate of profit. The supply Rubin's frame, is obliterated. For Rubin,
general as a measure of value—the special curve corresponding to this rate of profit is abstract labour is the particular form of
quality of a particular social organisation.4 associated with stable equilibria. Thus socially equalised labour that one encounters
Use-value relates to wealth and Marx in supply demand theory is reconciled with the in a capitalist society. Consequently it can-
"Capital" is discussing commodity, capital theory of prices of production. not be defined except with reference to the
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ECONOMIC AND POLITICAL WEEKLY Review of Political Economy January 1986
process of exchange. It follows that socially artisan are so stupid as to give up the pro- Except for a few restrictive cases, the ex-
equalised labour is more a general category, duct of ten hours labour of one person for istence of these skill multiples destroys the
though not a universal one. that of a single hour's labour of another? No uniformity of the rate of exploitation across
Thus Elson fails to appreciate the implica- other exchange is possible in the whole period industries. The uniformity is valid only if the
tions of AL for political practice. The very of peasant natural economy than that in ratio of wages of skilled to unskilled labour
generality of this category of 'abstract which the exchanged quantities of com- is equal to the multiple of reduction men-
labour', according to Elson, leaves no room modities tend to be measured more and more tioned above It is worth noting that the
for concrete political action. Significantly, according to the amounts of labour em- absence of an uniform rate of exploitation
political activity is shifted out ofthe domain bodied in them. endangers the validity of certain basic pro-
of abstract labour to that of concrete labour But Engels' position is found to be untenable positions of capital.
in Elson's analysis.6 even if history supports the existence of such Rubin firmly rejects this method of reduc-
The position, we think, is Hegelian. Hegel societies. The labour theory of value pre- ing skilled to unskilled labour on the basis
locates the social dynamic within the con- supposes the existence of 'equal labour', as of technical conditions alone For Rubin
tradiction between the lord and his serf, the Rubin so aptly demonstrates. Different types labour is equalised through exchange; labour
latter's consciousness being assigned the of labour are equalised only through ex- producing different use-values is considered
leading role. The 'self-consciousness' of the change mediated by money. By definition, equal because it creates commodities which
serf that arises out of his separation from barter precludes money and hence a mecha- are treated equally on the market. The
the concrete labour that he embodies, con- nism for ensuring equality between different market, in other words, compares them on
stitutes the motive force behind this types of labour. It is however a relief to find the basis of some identical or undifferen-
dynamic In civil society, where the concrete, that elsewhere, Engels limits the role of tiated norm. And as the commodities are
personalised, dominance-sub ordination rela- labour theory of value to capitalism as ap- considered equal in terms of the bourgeois
tionships between the lord and his are replac- parent from the following passage:8 ideals of equality and freedom, so must the
ed by the impersonal rules of abstract Economic value is a category specific to com- labour producing them be treated on an
labour, such a process ceases, to, operate, modity production and disappears with the lat- equal footing. The labour, thus equalised,
Hegel's dynamic therefore ends with civil ter, as it likewise did not exist prior to com- is not measured by a clock, but by the social
society; the transformation to a more deve- modity production. The relation of labour time corresponding to the norm specified by
loped mode of production, e g, socialism, to the product, before as after commodity the market. Thus the internal or immanent
is inconceivable. production, is no longer expressed under the is reflected exclusively through the external
value-form. measure of the labour embodied in com-
Rubin's conception of SHL, as a more
modities, in the prices of production, and
general category, that includes AL as a par-
INVALIDITY OF LAW OF VALUE IN A cannot be measured without any reference
ticular, enables a better insight into the social
SOCIALIST SOCIETY to it. The existence of objective processes
dynamic AL contains within it, its opposite,
the socially equalised, labour of a higher The operation of the law of value is con- behind the equalisation is acknowledged,
form, much as the bourgeois notion of tingent on the existence of abstract labour but contrary to traditional expositions these
equality contains within it the concept of which constitutes the content of the value processes themselves are considered to be
socialist equality. Nor are all contradictions form. As already stated, AL is labour unamenable to mathematical formulation.
resolved"here; instead, new ones emerge, equalised on the basis of exchange, imply-
heralding higher forms of political action ing a distinction between AL and SHL. The problem of 'reduction' may, conse-
AL i e, social labour formally equalised in Under socialism, labour is equalised by the quently, be seen as a false problem, arising
the sense that it enjoys bourgeois freedom subjective evaluation of the planner and out of the and chanistic interpretations that
provides the basis for political action in ultimately the party instead of the market. identify skills with human capital. It is in
capitalist society. It is conscious rather than It follows that Rubin's exposition of AL con- other words a product of the neoclassical
inert, being conscious of its formal freedom tradicts Stalin's notion of validity of the law economic philosophy of vulgar materialism
to enter into a contract, and hence also of of value under socialism. The existence of that tries to give AL in "Capital" some
the negation of true freedom—which under a market in a socialist society does not by substantive material content rather than a
capitalist society is a negation that only the itself validate the law of value. Introduction historically developed form of the social
introduction of socialism can efface. AL, of the appropriate planning mechanism relations of production.
then, is labour endowed with a culture. It under the guidance of the party changes the
Significantly neither Bohm-Bawerk nor
is the conscious organised action of this content of socially equal labour. As form
Hilferding, his critic, adopts this method of
cultured and formally free labour that makes and content are dialectically related, a
reduction. Bohm-Bawerk charges the con-
real emancipation possible. change in the content implies a correspon-
cept of AL of being guilty of circular reason-
ding change in the value form. Consequent-
ing. Labour itself equalised on the basis of
ly, under socialism the law of value ceases
Ill equivalences of exchange cannot be used to
to operate.
explain the ratio of these same equivalences.
Implications of Rubin's Analysis
Studies on AL that identify simple labour Elsewhere, Bohm-Bawerk summarily rejects
In an appendix to volume III of "Capital" with the abstract conceal the distinction any attempt at reducing skilled labour to the
Engels contends that value magnitudes (VM) between the simple labour employed in unskilled labour embodied in it. Hilferding
are historically prior to prices of production. various branches of production. Deskilling in his defence also accepts the determina-
VM are involved in the barter trade between is presented here as the central—indeed the tion of AL in the process of exchange. Con-
independent producers in some pre-capitalist sole—issue regarding AL. Particular skills sequently his defence of the so-called cir-
systems. Engels observes that:7 assumed to be the products of the system cularity is on the ground that the objective
itself are expressed as multiples that are of theory here is to investigate the laws of
The peasants of the middle ages knew fairly
determined concurrently with the value change—in this case the change of prices—
accurately the labour-time required for the
magnitudes by solving a set of simultaneous rather than to explain the prices of produc-
manufacture of the articles obtained by him
equations. Value magnitudes and abstract tion by empirical means. On the subject of
in barter. Not only was the labour-time spent
labour, therefore, are determined from the A L, Hilferding remarks:9
on these products the suitable measure for
the quantitative determination of the values technical conditions of production alone, There is no question here of the same
to be exchanged, no other was at all possi- without any reference to the process of amount, no question of quantitative equality.
ble Or is it believed that the peasant and the exchange We are solely concerned with the com-
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Review of Political Economy January 1986 ECONOMIC AND POLITICAL WEEKLY
parability of different kinds of labour, that The dependence of AL on the equi- understanding of the laws of notion of
is to say with the possibility of expressing valences established in the course of ex- capitalism.
them in terms of some common measure, change rules out the possibility of any
[I am indebted to Debaprasad Chatterjee, Par-
with the possibility of their qualitative dichotomy between prices and values. In
tha Chatterjee, Kaiyan Sanyal and Sarbajit
equalisation. other words, the entire mathematical exer-
Sengupta for helpful discussions. The croors—
In this connection Hilferding adds that the cise involving the application of Leontief- and idiosyncracies—are mine.]
reduction ratio between skilled labour and type input-output coefficients to the deter-
simple labour need not be determined in ad- mination of value follows from a philoso- [For unavoidable reasons the notes to this
vances of prices, because Marx's purpose is phical position that is fundamentally con- article will appear next week. Ed]
not to determine the height of prices. As
tradictory to Rubin's line of thought.
Hilferding writes:
Such standard works tend to isolate the
It is really true, however, that in default of
basic relationship into two separate and un-
a knowledge of the ratio [reduction ratio bet-
connected compartments: (a) technical rela-
ween skilled labour and unskilled labour] the LIC
tions, and (b) social relations. Value magni-
law of value becomes unworkable? In strik-
tudes are determined exclusively by technical
ing contrast with Bohrn-Bawerk, Marx looks LIFE INSURANCE CORPORATION OF
relations while social relations are seen to
upon the theory of value not as a means for INDIA(LIC)has an ambitious programme
ascertaining prices, but as the means for enter into the determination of the prices of of equipping its divisions and branches with
discovering the laws of motion of capitalist production,value magnitudes therefore are not inkroprocessors for uptodate record mainte-
society. Experience teaches us that the ab- historically specific concept but are valid in nance and effective post-sales service to
solute height of prices is the starting point general inasmuch as they are dependent customers. As many as 339 microprocessors
of this movement, but, for the rest, the ab- solely on certain basic technical relations are being located in various divisions and
solute height of prices remains a matter of that can be found in all societies. Only prices branch offices. A S Gupta, Chairman, has
secondary importance, and we are concerned of production are determined historically stated that in 1984-85 there has been a
merely with studying the law of their varia- and arc consequently specific to capitalism. substantial decline in the percentage of
tion. It is a matter of indifference whether Marxism however does not support such a outstanding claims to total claims payable
any kind of skilled labour is to be reckoned universal value-category that is prior to the during the year. The Corporation is pro-
the four-fold multiple or the six-fold multi- prices of production. As the sum of values gressively opening offices in various parts
ple of unskilled labour. The important point is determined from the value equations, of the country, particularly in the rural areas
is that a doubling or trebling of productive while the sum of prices is determined from so that there will be a better contact with
power in the sphere of skilled labour would the price equations, it is pointless to verify the public The renewal expense ratio and the
lower the product of skilled labour two-fold the equality between the sum of values and overall expense ratio for the year ended
or three-fold vis-a-vis the product of unskill- the sum of prices. Rubin emphasises that March 1985 show a fail from those of the
ed labour (by hypothesis unchanged). since the sum of values cannot be determin- previous year. The gross yield on the mean
Hence Hilferding dismisses the necessity of ed without any reference to the sum of Life Fund recorded an increase to stand at
determining the 'multiples of reduction' in prices, any attempt to examine the equality 9.46 per cent as against the previous year's
advance of prices on the ground that the between the two is absolutely inconsequen- 9.19 per cent and the total income of the
determination of the level of prices is not
tial. The normalising devise also tends to Corporation rose to Rs 2,519.99 crore from
Marx's purpose.
evade the issue. the previous year's Rs 2,173.22 crore, a rise
An extension of Rubin reveals that value of 15.96 per cent. The combined fund of the
IMPLICATIONS FOR THE ANALYSIS OF
magnitudes rather than input coefficients LIC constituting Life Fund, Capital Redem-
TRANSFORMATION PROBLEM
must provide the starting point for the ption and Group Gratuity and Superannua-
Traditional Anglo-Saxon discourse on the theory of value. The determination of value tion Funds has gone up by Rs 1,387.63
transformation problem (TP) attempt to magnitudes as well as empirical derivation crore. As on March 31, 1985 it stood at
derive the value magnitudes and prices of of prices of production are of no conse- Rs 11,643.97 crore (Rs 10,256.34 crore). In-
production from input coefficients. The quence in this context. Marx's own deriva- dividual assurances rose to Rs 5.398 crore
former are consequently shown to be tion of the prices of production is direct, in- from Rs 4,415 crore, showing an increase of
measurable in terms of the latter This is stead of being mediated by the technical co- 22.3 per cent. The number of new individual
followed up by an examination of Marx's efficients of production. Consequently his life policies issued also increased by 3.34 lakh
conjectures on value magnitudes and prices solution of the transformation problem does to 27.05 lakh. Group new business worth
of production. On this basis, it is claimed not address the question of determination Rs 8,395 crore (Rs 7,525 crore) was under-
that though either of the twin equalities of VM. Here, it must be emphasised, lies the written. A combined new business worth
0) sum of values = sum of prices, and strength of Marx's method, rather than its Rs 13,793 crore (Rs 11,940 crore) was tran-
(ii) profit = surplus value can be proved by weakness. Value magnitudes are not em- sacted on individual assurances and group
normalisation not both the equations can be pirically measurable; empirical magnitudes schemes. New business done in rural areas
simultaneously satisfied. Other conjuctures must be related to concrete labour. Abstract showed an increase of 24.5 per cent over the
on the ratio of economic magnitudes labour makes its appearance in the real pro- previous year in terms of sum assured.
are shown to be valid under restrictive cess of exchange and its internal measure s - Foreign business has been showing consi-
conditions. value magnitudes—are restricted to a speci- derable improvement over the last three
Extensions of Rubin clearly demonstrate fic historical domain in capitalism. By years. The number of policies issued has
that these mathematical exercises are based definition, this internal measure of value gone up by about 6.2 per cent over the pre-
on some fundamental misconceptions. The must depend on the external measure. vious year. New business worth Rs 1,508.94
authors are, in fact, dealing here with con- As VM are not empirically determined, crore under Non-Medical Schemes covering
crete labour The equations involving the neither are prices of production. They are 13.63 lakh policies was finalised as compared
technical conditions of production [aij's and only explained by the V M. As Hilferding's to the previous year's business of Rs 1,153.45
aoj's] are derived without any reference to remarks quoted in the earlier section make crore on 11.70 lakh policies. Salary Sav-
exchange and therefore involve concrete clear, Marx was not interested merely in the ings Scheme business (new) amounted to
labour. Consequently such exercises are im- determination of the absolute level of prices. Rs 1,112.65 crore under 7.44 lakh policies as
permissible in the context of the Marxian Neither a determination of prices nor an ex- against the preceding year's business of
frame. planation of their variation is integral to the Rs 833.63 crore under 6.07 lakh policies.
PE-44
