Introduction The Labour Theories of Value: Classical and Marxian

Classical economists sought to demonstrate that prices of production could be

explained without reference to supply and demand. (Cohen; 1989) If these long run, or
production, prices could be traced to the difficulty of production, then political
economy would have a scientific theory of price formation or a theory of valuation
that did not rely on utility, preferences, or transitory market forces. Further, at least
some thought it important to find a measure of value that would be invariant to certain
changes, such as a change of distribution between classes. (Kregel; 1973)
Marx, however, took a different route he emphasized the dual nature of labour: first,
as the basic element of production; and second, as a commodity with exchange-value. In
consonance with Marx, labour hours can serve as an invariant measure of value;
changes of technique would change the set quantity of hours required to produce a
particular commodity, but the number of hours required could always serve to measure
the difficulty of production, so to speak. This is distinguished from labour as a
commodity with a price determined by the specific production and social relations
ruling at a given point in the process of the development of capitalism. (Kregel; 1973, p.
115) Labour-time, reduced to its socially-necessary amount could serve as a unique
measure of the value of all commodities, including the commodity labour-power that is
exchanged at the going wage. Finally, once a certain level of technique has been
achieved by society, labour-power is able to produce value beyond what is necessary to
reproduce itself that is, surplus-value can be created. The rate of surplus-value is
determined by the ratio of unpaid to paid labour-time.
Engels emphasized that the LTV has a basis not only in logic but also in history: as a
statement of logic, the LTV is but the economic expression for the fact of the social
productive power of labor as the basis of economic existence but Marx goes much
further: the value of commodities is the specific and historical form in which the
productive power of labour, in the last analysis dominating all economic processes,
asserts itself as a determining factor.
Furthemore, Marx insisted, more importantly, that with the rise of merchant capital,
prices cannot reflect labour-values because prices are formed to equalize profit rates on
invested capital. In a pre-capitalist society (or, what we Keynesians call the neutral
economy), exchange would take the form of C-M-C and prices could reflect
labour-values; although, according to Engels, capitalist production is not consistent with
exchange at labour-values because profit rates must be equalized on invested capital.
This system must be represented as M-C-M, where commodities are produced only to
the extent that money values are expected to expand. Labour-values are not observed in
a capitalist system, and the functioning of the system is not such as to reflect these

labour-values in prices but the conversion of labour-values into prices still, according
to Engels, proceeds according to objective laws, without the consciousness or intent of
the participants.
Marxs Monetary Theory
Marxs monetary theory posits standardized commodity-money as the only form of
money a bitterly wrong postulate, no doubt.
Per Volume III of Capital:
But as soon as credit is shaken [sc. in commercial crises]and this phase always
appears of necessity in the cycles of modern industryall the real wealth is to be actually
and suddenly transformed into money, into gold and silver, a crazy demand, which,
however, necessarily grows out of the system itself. And all the gold and silver, which is
supposed to satisfy these enormous demands, amounts to a few millions in the cellars of
the Bank.
In the effects of the gold drains, then, the fact that production as a social process is not
subject to social control is strikingly emphasized by the existence of the social form of
wealth outside out of it as a separate thing. The capitalist system of production, it is
true, shares this with former systems of production, so far as they rest on the trade with
commodities and private exchange. But only in it does this become apparent in the most
striking and grotesque form of the most absurd contradiction and nonsense, because, in
the first place, production for the direct use of the producers is most completely
abolished under the capitalist system, so that wealth exists only as a social process
expressed by the interrelations of production and circulation; and in the second place,
because capitalist production forever strives to overcome this metallic barrier the
material and phantastic barrier of wealth and its movements, in proportion as the credit
system develops, but forever breaks its head on this same barrier.
In the crisis the demand is made, that all bills of exchange, securities, and commodities
shall be simultaneously convertible into bank money, and this whole bank money
consists of gold. (Marx 1909: 673674).
But it should never be forgotten, that money, in the first place, in the form of precious
metals, remains the basis from which the credit system naturally can never detach
itself. (Marx 1909: 712).

The banking system shows, furthermore, by putting different forms of circulating credit
in the place of money, that money is in reality nothing but a special expression of the
social character of labor and its products, so that this character, as distinguished from
the basis of individual production, must present itself in the last analysis as a thing, as a
peculiar commodity by the side of the other commodities. (Marx 1909: 713).
Its indisputable here that whatever erudition of credit-money Marx had, he certainly
saw it as no more than a symbol for the real backing of money at the time: gold a
commodity-money. Money, so Marx argues, can only ever be a commodity. Marx says,
explicitly, that money , in the form of precious metals, remains the basis from which
the credit system naturally can never detach itself. Money must be a produced
commodity with a labour-value alongside other commodities (Marx 1909: 713) and
this is already expressed in the Grundrisse:
Money the common form, into which all commodities as exchange values are
transformed, i.e. the universal commodity must itself exist as a particular commodity
alongside the others, since what is required is not only that they can be measured
against it in the head, but that they can be changed and exchanged for it in the actual
exchange process. The contradiction which thereby enters, to be developed elsewhere.
Money does not arise by convention, any more than the state does. It arises out of
exchange, and arises naturally out of exchange; it is a product of the same.
Marx, The Grundrisse, Notebook 1, October 1857, The Chapter on Money (Part II)
https://www.marxists.org/archive/marx/works/1857/grundrisse/ch03.htm
But we can go further. This extrapolation from Marxs text is as clear as crystal: modern
money (fiat), the quantity of which is, nowadays, expanded through open market
operations, is impossible because it is not backed by a commodity. This is made
even clearer upon inspection of Volume I of Capital, in Chapter III:
The State puts in circulation bits of paper on which their various denominations, say
1, 5, &c, are printed. [Insofar] as they actually take the place of gold to the same
amount, their movement is subject to the laws that regulate the currency of money itself.
A law peculiar to the circulation of paper money can spring up only from the proportion
in which that paper money represents gold. Such a law exists; stated simply, it is as
follows: the issue of paper money must not exceed in amount the gold (or silver as the
case may be) which would actually circulate if not replaced by symbols. Now the
quantity of gold which the circulation can absorb, constantly fluctuates about a given
level. Still, the mass of the circulating medium in a given country never sinks below a
certain minimum easily ascertained by actual experience. The fact that this minimum

mass continually undergoes changes in its constituent parts, or that the pieces of gold of
which it consists are being constantly replaced by fresh ones, causes of course no change
either in its amount or in the continuity of its circulation. It can therefore be replaced by
paper symbols. If, on the other hand, all the conduits of circulation were to-day filled
with paper money to the full extent of their capacity for absorbing money, they might
to-morrow be overflowing in consequence of a fluctuation in the circulation of
commodities. There would no longer be any standard. If the paper money exceed its
proper limit, which is the amount of gold coins of the like denomination that can
actually be current, it would, apart from the danger of falling into general disrepute,
represent only that quantity of gold, which, in accordance with the laws of the
circulation of commodities, is required, and is alone capable of being represented by
paper. If the quantity of paper money issued be double what it ought to be, then, as a
matter of fact, 1 would be the money-name not of 1/4 of an ounce, but of 1/8 of an
ounce of gold. The effect would be the same as if an alteration had taken place in the
function of gold as a standard of prices. Those values that were previously expressed by
the price of 1 would now be expressed by the price of 2.
Paper-money is a token representing gold or money. The relation between it and the
values of commodities is this, that the latter are ideally expressed in the same quantities
of gold that are symbolically represented by the paper. Only in so far as paper-money
represents gold, which like all other commodities has value, is it a symbol of value.
(Marx 1906: 143144).
That is, according to Marx: Paper money is an exact, face-value representation of gold;
what is backing it, is simply the same amount of gold; and, if, in the excess of the gold
reserves, a vast sum of paper money were to be pumped in, the standard of value would
collapse. Moreover, that very same paper money must, according to Marx, be converted
to gold, officially and at a fixed rate, lest it no longer be money.
From here on out, we've established that Marx utterly rejected fiat money, the existence
of which on his account was inconceivable. He made it briskly apparent that it is only
because the money-commodity has a labour-value engendered within it that it can
perform the functions of a universal medium and by extension, a numraire. Indeed,
in Marxs view, all commodity exchange is founded upon the fact that commodities (the
money-commodity included) are made commensurable by having quantitative
labour-values. Otherwise, his monetary postulates would hold little ground, if any at all.
The bitter truth is, I'm afraid, that gold has little use to the nations monetary authority
beyond being one of their many, many assets precautionarily kept, of course; it's most
commonly a speculative asset, an investment vehicle (as is silver) nothing more.

What Marx was trying to show us was that since money was a commodity, it contained a
set amount of labour-time congealed within. Itd never come across his mind that
throughout an economy, through functions of mutually existing agreements, a floating
exchange-value would come about without a state (in the present epoch, a monetary
authority) ensuring that the quantity of money was parity to the quantity of gold in the
reserves; without the state or central bank having to keep tabs on the elasticity of
production of the commodity-money, etc. Needless to say, unlike during Germany or
Britains gold standard, from which Marx compiled his asseverations, the long-run
SNLT to produce fiat money is laughably small in comparison to what it used to be
under a different monetary standard in order to net the same exchange-value of money,
and the differences in labour-time between creating, say, a $1 bill and a $100 bill isn't
even proportional; nor are the monetary costs expended in creating said dollar bills
proportional (~$0.05 is the cost of a $1 bill; ~$0.12 is the cost of a $100 bill).
If Marx had explicitly stated that the prices of commodities are determined by their
conditions of production, and, thus, that the total value of commodities that need to be
circulated by money that is, bought and sold for money is determined by these
production factors and by the amounts of the commodities produced, through a
standard of price that finally transfers a set amount of the money-commodity into
contemporary monetary units, then the very existence of fiat money undermines and
upon closer inspection refutes this entire stream of wing-flapping done by Marx.
Perhaps he could flap his wings and produce a mild breeze in his day and age, but not
anymore: his monetary theory is worthless.
Marxs Exploitation Theory
To quote George Reisman:
[Profit] is the excess of receipts from the sale of
products over the money costs of producing themover, it must be repeated, the money
costs of producing them. A capitalist is one who buys in order subsequently to sell for
a profit. (A capitalist is one who makes productive expenditures.)
Wages are money paid in exchange for the performance of labornot for the products
of labor, but for the performance of labor itself.
With that in mind, lets take a gander at the pre-capitalist economy that is, Smith and
Marxs pre-capitalist economy where, according to Marx, production is delineated,
illustrated and based on the C-M-C/petty commodity production sequence: C is the

commodity realized after a workers production; M is the exchange the money the
worker receives after its sold; and C signifies the other commodities bought using M.
This is petty commodity production by virtue of the absence of exploitation, of profits,
of surplus-value; all income collected is the wage. Now, since value in the Marxian
schema is not transhistorical, with capitalism, the sequence has altered slightly in
expression: now, we have M-C-M. Under this advanced state of affairs, weve now a
capitalist, who abstains from consumption, and in doing so has the means to expend a
sum of money (M) on materials and machinery and on his workers wages. A
commodity, C, has been produced; it's now sold for an even greater sum of money than
the sum expended in its production (M). Needless to say, the difference between the
money the capitalist expends and the money he receives for the final product is his
profit or surplus-value.
What weve developed here is the conceptual framework within which the exploitation
theory is advanced, being no less important than the meat of Marxs theory of
exploitation itself; but here, we have the heart, the foundation of the theory, with its
roots in the opening of Adam Smiths chapter on wages in his The Wealth of Nations:
The produce of labour constitutes the natural recompense or wages of labour. In that
original state of things, which precedes both the appropriation of land and the
accumulation of stock, the whole produce of labour belongs to the labourer. He has
neither landlord nor master to share with him.
But this original state of things, in which the labourer enjoyed the whole produce of his
own labour, could not last beyond the first introduction of the appropriation of land and
the accumulation of stock. It was at an end, therefore, long before the most considerable
improvements were made in the productive powers of labour, and it would be to no
purpose to trace further what might have been its effects upon the recompense or wages
of labour.
As soon as land becomes private property, the landlord demands a share of almost all
the produce which the labourer can either raise or collect from it. His rent makes the
first deduction from the produce of the labour which is employed upon the land.
It seldom happens that the person who tills the ground has the wherewithal to maintain
himself till he reaps the harvest. His maintenance is generally advanced to him from the
stock of a master, the farmer who employs him and who would have no interest to
employ him, unless he was to share in the produce of his labour, or unless his stock was
to be replaced to him with a profit. This profit makes a second deduction from the

produce of the labour which is employed upon land.

The produce of almost all other labour is liable to the like deduction of profit. In all arts
and manufactures the greater part of the workmen stand in need of a master to advance
them the materials of their work, and their wages and maintenance till it be completed.
He shares in the produce of their labour, or in the value which it adds to the materials
on which it is bestowed; and in this share consists his profit. (Smith; The Wealth of
Nations, BK I, Chap.VIII).
In these passages, Smith promulgates the primacy of wages doctrine, in which workers,
in the early and rude stages of society primitively produce and sell commodities in
the most basic manner of going about, rather than buying in order to sell. Because
workers are the only recipients of income, according to Smith, and because profits have
not yet come to be through capitalism, the wage is the original income. Indeed, Smith
advanced the corollary doctrine that profit emerges only with the coming of capitalism
and is a deduction from what is naturally and, by implication, rightfully wages.
Smiths doctrines are the starting point the conceptual framework for Marx. Marx
later on propounded his exploitation theory, but it was through Smiths doctrine on the
primacy of wages. I will be arguing contra the exploitation theory, but not against the
theory itself; rather, I will attack its roots so the theory crumbles upon itself.
Moving on, now, with the definitions of the terms provided at the beginning of this
section, and on their basis, it follows that, if there are merely workers producing and
selling their products, the money which they receive in the sale of their products is not
wages but, rather, it is profit.
To quote John Stuart Mill:
We now pass to a fourth fundamental theorem respecting Capital, which is, perhaps,
oftener overlooked or misconceived than even any of the foregoing. What supports and
employs productive labour, is the capital expended in setting it to work, and not the
demand of purchasers for the produce of the labour when completed. Demand for
commodities is not demand for labour. The demand for commodities determines in
what particular branch of production the labour and capital shall be employed; it
determines the direction of the labour; but not the more or less of the labour itself, or of
the maintenance or payment of the labour. These depend on the amount of the capital,
or other funds directly devoted to the sustenance and remuneration of labour. (John
Stuart Mill, Principles of Political Economy, op. cit., BK. I, Chap. V, Sec. 9.)

Mill rightfully concluded in this section that demand only tells the entrepreneur what to
invest into: contextually speaking, in buying commodities, one does not pay wages; and
in selling commodities, one does not receive wages. In a pre-capitalist economy, when in
the process of production all income recipients are workers, the incomes of those
workers are not wages; their incomes are profits. On account of the indisputable truth
that what the workers of a pre-capitalist economy receive are receipts from the sale of
products; but, since those workers aren't, haven't, and furthermore cannot act as
capitalists, they have no costs of production to deduct from those sales receipts. Nor
have those workers advanced any purchases with the hopes of making possible those
sales receipts therefore, they haven't any money costs. What this means is that in a
pre-capitalist economy, only workers receive incomes, and there isn't any money capital.
Returning to the sequence of C-M-C, then, everything is surplus value 100% of the
sales receipts and an infinite percentage of the zero money capital; and in the sequence
of M-C- M, a smaller proportion of the incomes is surplus value in degree that M is
large relative to M.
To quote Reisman again:
[This same conclusion that in the pre-capitalist economy all income is profit, rather
than wages can be arrived at] by way of David Ricardo's badly misunderstood
proposition that "profits rise as wages fall and fall as wages rise."
That is, according to Ricardo, the wages paid in production are paid by capitalists not
by consumers. If, as in the pre-capitalist economy, there are no capitalists, then there
are no wages paid in production; and if there are no wages paid in production, the full
income earned must be profits.
Smith and Marx were wrong, needless to say. Wages are not the primary form of income
in production not now, not ever. Profits are. In order for wages to exist in production,
it is first necessary that there be capitalists. The emergence of capitalists does not bring
into existence the phenomenon of profit; profit exists prior to their emergence. The
emergence of capitalists brings into existence the phenomena of wages and money costs
of production. Accordingly, the profits in a capitalist society are not a deduction from
what was originally wages. On the contrary, the wages and the other money costs are a
deduction from sales receipts from what was, originally, all profit. The effect of
capitalism is to create wages and to reduce profits relative to sales receipts.

Thus, to quote Reisman, capitalists do not impoverish wage earners; nor steal from
them; nor enslave them. Au contraire, they make it possible for others to be wage
earners. Because they are responsible not for the phenomenon of profits, but for the
phenomenon of wages; they are responsible for the very existence of wages in the
production of products for sale. Without capitalists, the only way in which one could
survive would be by means of producing and selling one's own products namely, as a
profit earner. But to produce and sell one's own products, one would have to own one's
own land, and produce or have inherited one's own tools and materials. Relatively few
people could survive in this way. The existence of capitalists makes it possible for people
to live by selling their labour-power rather than attempting to sell the products of their
labour-power. Thus, between wage earners and capitalists, there is in fact the closest
possible harmony of interests, for capitalists create wages and the ability of others to
survive and prosper as wage earners.
To quote Reisman once more:
The variation of profits with the size of the capital invested is perfectly compatible with
their being attributable to the labor of those who earn them, because in a capitalist
economy the labor of profit earners tends to be predominantly of an intellectual
naturea work of thinking, planning, and decision making. At the same time, capital
stands as the means by which businessmen and capitalists implement their plansit is
their means of buying the labor of helpers and of equipping those helpers and providing
them with materials of work. Thus, the possession of capital serves to multiply the
efficacy of the businessmen and capitalists' labor, for the more of it they possess, the
greater is the scale on which they can implement their ideas. For example, a
businessman who thinks of a better way to produce something can apply that better way
on ten times the scale if he owns ten factories than if he owns only one. The fact that in
the one case the same labor on his part leads to ten times the profit as in the other case
is perfectly consistent with the whole profit still being attributable to his labor.
Further, the compound variation of profits with the passage of time is also perfectly
consistent with the fact that they are the product of the businessmen and capitalists'
labor. The relationship of profits to the passage of time derives from the fact that profits
vary with the size of the capital invested per period of time. If one can earn profits in
proportion to one's capital in any given period of time, then if investment for a longer
period is to be competitive, one must earn the profits that one could have earned in the
shorter period plus the profits one could have earned by the reinvestment of one's
capital and its profits.

The correct theory is the exact opposite of the doctrine of the primacy of wages.
Furthermore, as first-generation Austrian economist Eugen von Bhm-Bawerk wrote,
We have traced all kinds and methods of acquiring interest to one identical source
the increasing value of future goods as they ripen into present goods.
Wages are, in effect, a loan (not literally) to be repaid when the product hits the
shelves and sells; thus, we shouldnt be surprised if the revenue from the sale is greater
than wages paid (and other input costs). No exploitation need have occurred. (Profit
has other components, as well, including pure entrepreneurial profit from arbitrage:
from actualizing the hitherto overlooked potential value of undervalued resources, etc.,
but I digress.)
One component of the employers profit is, in fact, interest on the money he advances
workers as wages while the product is being readied for sale: making and marketing
products take time. Typically, workers cannot afford to wait, and thus suspend their
debts and liabilities, until the product is sold before they are paid no: they want a
check every week. But, how can they be paid before their products have been sold? Their
employers pay them out of money accumulated previously out of forgoing consumption.
Thus, as Ive mentioned, wages are, in effect, a loan, which like all loans is repaid with
interest and this is so because of time preference: we value present goods more highly
than future goods (see Keynes precautionary motive, for instance), meaning present
goods are, to no ones surprise, discounted from their future value. Other things equal
$X future dollars are worth less than $X dollars today. Or, to examine it from the other
direction, if youd like to use my $X today, requiring me to abstain from using them and
relinquish their liquidity to you, Ill demand just recompense: to be paid more than $X
when the loan comes due. The interest payment is my reward for abstention.
The Transformation Problem
The transformation problem is beyond any shadow of doubt the most complex and
multifaceted controversy between Marxism and bourgeois economics. Over the years,
after Marx and Engels deaths, adherents of the Marxian law of value have modified,
rectified, and even re-written the law of value after criticism and self-criticism. So
there's been a historical development in Marxian economics, a complete list of which is
cited as follows:
(1) The law of value in Volume III of Capital, in which the sum of surplus value = the
sum of profits; the sum of values = the sum of prices; and the value rate of profit

= the money rate of profit. This interpretation of Marx was later criticized by
Austrian economist Bhm-Bawerk, and dominated Marxist thought in the
Western world and Russia up until the Second World War.
(2) Simultaneous Dual-System Interpretation, in which, contrary to (1)s aggregate
equalities, the sum of values = the sum of prices of production. This
interpretation came about with the revolution that came with the works of
Ladislaus von Bortkiewicz (18681931), Vladimir Karpovich Dmitriev
(18681913) and Mikhail Ivanovich Tugan-Baranovsky (18651919).
Bortkiewiczs new model adopted this dual-system view that contended that
labour values and prices of production are determined entirely separately;
adherents of this view insist that it logically follows that the transformation
problem is done away with under such a view.
(3) Temporal Single System Interpretation (TSSI). This emerged in the 1980s, as a
new generation of Marxists surveyed the sharp decline in credibility of previous
interpretations of Marxs economic theory. The TSSI Marxist argue that the late
Bortkiewiczs criticisms of Marx apply only to a Classical long-period equilibrium
interpretation of Marxs value theory, and that this long period interpretation is
false and a misrepresentation of Marxs views altogether. The TSSI, furthermore,
treats factor input prices in a temporal and non-simultaneous manner. The
orthodox simultaneous treatment of the prices of factor inputs holds that, in
essence, they should be measured by current prices at the time of final
production of the output commodity and not at their prices when purchased.
Conversely, the TSSI holds that the prices and labour value of factor inputs
should be measured at the time at which they were purchased.
(4) The New Interpretation (NI) of Gerard Dumenil, A. Lipietz, and Duncan Foley
(Anwar Shaikh holds contentions with the transformation problem thatre similar
to the NI interpretations contention). The NI branch of Marxists by Duncan
Foley and Grard Dumnil emerged in the 1980s, too, and appears to dispense
entirely with any attempt to transform labour values into prices by conflating
values with prices.
Ive intentionally left out the simultaneous single-system interpretation (SSSI) because
there are no reputable Marxists who adhere to this school of interpretation only
clowns like Richard Wolff defend this rubbish.
I won't address each and every interpretations thoughts on the transformation problem
because thatd be an enormous waste of time: I haven't the slightest clue which school
you adhere to. I'll be brief in my overview here; I'll be general, as well. And Ill write on
the premise that you espouse the (1) interpretation.

As a general basis of the transformation problem, it's been predicted by Marxian

economists that profit should act like a value-added tax (so to speak); the added value
consists of the surplus labour at each stage of production. However, in actuality, in the
capitalist mode of production, profit acts like a turnover tax, where each stage of the
production process incurs a tax on the entire value transmitted, rather than just the
value added. Neo-Keynesian economist Paul Samuelson illustrated that these different
ways of looking at profit result in different slopes for the wage component of the
production possibility frontier. It is mathematically impossible to model a constant
turnover tax as a constant value-added tax; they might have the same total cost, but
their allocation cannot be transformed to individual industries, holding untenable
without disingenuous processes of econometric aggregation. This is because competitive
equilibrium requires a uniform rate of return over constant capital valued at its price
(rather than its Marxian value), and competitive prices result from the sum of costs
(-plus) valued by agents at the prices of things (instead of embodied labour).

That is, we may see here that the sum of values in the abstract = the sum of prices, but
the slope of the firms frontier cannot be individually nor econometrically correlated
because of the capital goods financial yield and potential risk premia that act as
upwards pressure on profit rates irrespective of capital intensity.
But, even before you respond and perhaps Im being patronizing to suggest that you
will and present your data, allow me to challenge the methodology of contemporary
Marxist economists or statisticians from whom I imagine you'll be taking cues from in
your response. The entire empirical relevance and design of SNLT is subordinate to the
task of demonstrating how the reduction of heterogenous human labour can be done to
a homogeneous unit: collection of wage-data is otherwise impossible.
Just as one does not pay a bricklayer or a real-estate agent or a farmer with a different
currency than a surgeon, everyone is reduced to a common unit a money unit.
However, as put forth by Marx in Chapter 1 of Volume I, it is quite possible to measure

with near-perfect accuracy the value of skilled labour by referring to the

exchange-values of products of skilled labour as against products of unskilled labour.
But that begs the question: did Marx really believe that commodities tend to exchange at
pure labour-values? Because, logically, you cannot accurately measure the value of
skilled labour in this manner if its likewise true that commodity prices almost always
deviate from true labour values (which is, of course, Marx's view of prices in vol. 3 of
Capital: prices deviate from labour-values). And if commodity prices do not always
reflect true labour-values, true to Marxs doctrine, then you cannot measure the true
value of skilled labour by merely looking at the exchange-values of the products of
skilled labour as against unskilled labour.
TSSI and NI Marxian economists, such as Duncan Foley and Andrew Kliman, often
employ aggregate statistics or BEA data, which they evince as sufficient for finding
wage-hour aggregates with sectoral conditions in mind. However, BEA data does not
show you how all heterogeneous labour can be reduced to an SNLT-friendly unit; rather,
it depicts only total hours worked in each sector or total wages in each sector.
A socially-necessary labour unit of simple labour is abstract. All labour must, then, be
measured by the latter. BEA statistics and national aggregates on raw, concrete
labour-hours worked in industries across the country, with different organic
compositions of capital, does not come close to solving the aggregation problem and
obviously, data on actual hours worked in any given industry must refer to concrete
labour, not abstract labour: national aggregation is not synonymous with abstract in any
way, shape or form. There quite simply is no meaningful way to statistically aggregate
SNLT, lest we resort to useless mental gymnastics such as the theories advanced by the
TSSI Marxists and the NI School.