What really is SNLT?

February 2024 Forums General discussion What really is SNLT?

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  • #85885
    Sympo
    Participant

    How would one know the SNLT to produce a certain commodity? Does one look the combined labour time of all producers and then divide the number by the amount of producers? I.e. do you figure out the arithmetic mean?

    #130724
    ALB
    Keymaster

    No.

    #130725
    Sympo
    Participant

    Then what is it?If it takes 5 hours for company A to make something and it takes 10 hours for company B, C, D etc to make the same thing, is the SNLT 5 hours?

    #130726
    ALB
    Keymaster

    The amount of socially necessary labour time  in a commodity is not something that is, or can be, established mathematically. It's established by the market. Sometimes more is produced than the market requires; in which case the labour time involved in producing the unsold surplus is wasted and would not enter into your average (arithmetical mean). Also, it is not the cost of having produced a commodity that is relevant but the cost of reproducing it. As in most industries (mining and extraction are exceptions), with the introduction of more efficient machines or ways of organising production, this will tend to fall. All this means that in practice the amount of SLNT in a commodity will be less than your arithmetic mean (supposing it could be established).

    #130727
    Sympo
    Participant

    What would be the direct answer to the question "If it takes 5 hours for company A to make something and it takes 10 hours for company B, C, D etc to make the same thing, is the SNLT 5 hours?" I'm thinking about what the term "socially necessary" means. Company A in this example has shown that the commodity can be made in 5 hours. Does this not mean that company A has, by itself, lowered the socially necessary labour time?

    #130728
    ALB
    Keymaster
    Sympo wrote:
    What would be the direct answer to the question "If it takes 5 hours for company A to make something and it takes 10 hours for company B, C, D etc to make the same thing, is the SNLT 5 hours?"

    On the assumption that only company A is capable of (re)producing the commodity in 5 hours while all the other companies producing the same commodity can only do so in 10 hours, then the SNLT would be 10 hours (even on your arithmetic mean it would be only just under this). This is because the total amount of the commodity required by the market cannot be supplied at 5 hours labour-time a commodity.What would happen in your hypothetical situation is that company A would be making extra profits. This would be an incentive for the other companies to adopt the same production methods as company A. The more that did the lower the price (and SNLT) would become until, when (and if) all companies adopted the same methods, the SNLT would fall to 5 (and company A lose its extra profits). As a matter of fact, this is how the price of commodities (other than from mining and extraction where costs tend to increase as the easier seams and oil wells are used up first) comes to fall — one firm innovating and making extra profits, both providing the other firms with an incentive to follow suit and competition putting them under pressure to do so to stay in the race for profits.

    #130729

    We have a real world example:http://www.bbc.co.uk/news/business-42063274

    Quote:
    Prescription medicines that are still under patent can be expensive, but the government caps profits from any that are sold to the NHS to keep costs low.But this system does not cover so-called "generic medicines", where a drug's patent has run out.The loophole means the price of older, established drugs coming off patent can rocket.

    In theory, without a patent to protect the drug, anyone could enter the market, and produce these drugs, in practice, it takes time and effort to set up the production line, and the volumes are small: so the existing manufacturer can ramp up the cost, even though they don't have the state backed monopoly of a patent.It's useful to think 'hegemonic' rather than 'average' (in reality it's closer to mode than mean): if by custom, practice or for some other reason a particular method of production predominates in the market for a given commodity it governs what the dominant/hegemonic price is (and also the generally necessary labour time): othr more or less efficient methods may operate around that.

    #130730
    Dave B
    Participant

    i There is also the market-value — of which later — to be distinguished from the individual value of particular commodities produced by different producers. The individual value of some of these commodities will be below their market-value (that is, less labour time is required for their production than expressed is the market value) while that of others will exceed the market-value. On the one hand, market-value is to be viewed as the average value of commodities produced in a single sphere, and, on the other, as the individual value of the commodities produced under average conditions of their respective sphere and forming the bulk of the products of that sphere. It is only in extraordinary combinations that commodities produced under the worst, or the most favourable, conditions regulate the market-value, which, in turn, forms the centre of fluctuation for market-prices. The latter, however, are the same for commodities of the same kind. If the ordinary demand is satisfied by the supply of commodities of average value, hence of a value midway between the two extremes, then the commodities whose individual value is below the market-value realise an extra surplus-value, or surplus-profit, while those, whose individual value exceeds the market-value, are unable to realise a portion of the surplus-value contained in them. https://www.marxists.org/archive/marx/works/1894-c3/ch10.htm

    #130731
    Sympo
    Participant

    What if it takes 1 hour for A, 2 for B, 3 for C and 4 for D to produce a certain commodity? What would then be the SNLT?

    #130732

    It doesn't matter entirely how many hours it takes A-D to make the product.  How many of the proudct does each make, and what does that represent as a percent of market share?  What is the raw demand for the product, how many are needed?A-D will each make their product, and bring it to the market, only those that are sold will contriubte to deciding the "Necessary" part of the formula.Maybe it helps to go back to a basic model: imagine a village: everyone share a set of skills, so anyone can do any job in the village.  To simplify matters, we assume that all commodities contain products of nature and labour (wicker baskets, deer haunches, fish, fire wood, etc.) i.e. there is no capital.  People have different preferences for the type of work they do, and it is efficient for A to make baskets, B to hunt deer, C to fish, etc.  They each can exchange their products, because they know roughly how long it takes to catach 10 fish, 3 deers, a kilo of fire wood, etc.  If A started trying to overcharge in exchange for their baskets, people would simply stop exchanging and start using their time to make their own.Lets assume that there is an A1…An : i.e. that many people are supplying baskets, they might work at different rates, but since everyone in the village knows roughly how long it takes to make a basket, they would only exchange with Lazy A at the expected rate, and likewise with the Industrious A.  They wouldn't have to start making baskets themselves, they could just switch to a different A if they were unhappy with the work or exchange rate.I believe Engels notes somewhere that in early market societies, they had the time to haggle and fix the rate carefully.

    #130733

    Ah, here is Engels

    Capital III wrote:
    The little that such a family had to obtain by barter or buy from outside, even up to the beginning of the 19th century in Germany, consisted principally of the objects of handicraft production — that is, such things the nature of whose manufacture was by no means unknown to the peasant, and which he did not produce himself only because he lacked the raw material or because the purchased article was much better or very much cheaper. Hence, the peasant of the Middle Ages knew fairly accurately the labor-time required for the manufacture of the articles obtained by him in barter. The smith and the cartwright of the village worked under his eyes; likewise, the tailor and shoemaker — who in my youth still paid their visits to our Rhine peasants, one after another, turning home-made materials into shoes and clothing. The peasants, as well as the people from whom they bought, were themselves workers; the exchanged articles were each one's own products. What had they expended in making these products? Labor and labor alone: to replace tools, to produce raw material, and to process it, they spent nothing but their own labor-power; how then could they exchange these products of theirs for those of other laboring producers otherwise than in the ratio of labor expended on them? Not only was the labor-time spent on these products the only suitable measure for the quantitative determination of the values to be exchanged: no other way was at all possible. Or is it believed that the peasant and the artisan were so stupid as to give up the product of 10 hours' labor of one person for that of a single hours' labor of another? No other exchange is possible in the whole period of peasant natural economy than that in which the exchanged quantities of commodities tend to be measured more and more according to the amounts of labor embodied in them. […]The same holds good for exchange between peasant products and those of the urban artisans. At the beginning, this barter takes places directly, without the medium of the merchant, on the cities' market days, when the peasant sells and makes his purchases. Here, too, not only does the peasant know the artisan's working conditions, but the latter knows those of the peasant as well. For the artisan is himself still a bit of a peasant — he not only has a vegetable and fruit garden, but very often also has a small piece of land, one or two cows, pigs, poultry, etc. People in the Middle Ages were thus able to check up with considerable accuracy on each other's production costs for raw material, auxiliary material, and labor-time — at least in respect of articles of daily general use.But how, in this barter on the basis of the quantity of labor, was the latter to be calculated, even if only indirectly and relatively, for products requiring a longer labor, interrupted at regular intervals, and uncertain in yield — grain or cattle, for example? And among people, to boot, who could not calculate? Obviously, only by means of a lengthy process of zigzag approximation, often feeling the way here and there in the dark, and, as is usual, learning only through mistakes. But each one's necessity for covering his own outlay on the whole always helped to return to the right direction; and the small number of kinds of articles in circulation, as well as the often century-long stable nature of their production, facilitated the attaining of this goal. And that it by no means took so long for the relative amount of value of these products to be fixed fairly closely is already proved by the fact that cattle, the commodity for which this appears to be most difficult because of the long time of production of the individual head, became the first rather generally accepted money commodity. To accomplish this, the value of cattle, its exchange ratio to a large number of other commodities, must already have attained a relatively unusual stabilization, acknowledged without contradiction in the territories of many tribes. And the people of that time were certainly clever enough — both the cattlebreeders and their customers — not to give away the labor-time expended by them without an equivalent in barter. On the contrary, the closer people are to the primitive state of commodity production — the Russians and Orientals, for example — the more time do they still waste today, in order to squeeze out, through long tenacious bargaining, the full compensation for their labor-time expended on a product.

    Forgive the long quote, but it is very useful.https://www.marxists.org/archive/marx/works/1894-c3/supp.htm#intro

    #130734
    Sympo
    Participant

    Do marxists accept the idea of SNLT because they accept the LTV as the only possible explanation for value?Does the reasoning go:"If the LTV is true, then SNLT must be true aswell. And seeing as the LTV is the only reasonable explanation for value, the concept of SNLT must be true"

    #130735
    ALB
    Keymaster

    Actually, as the Socially Necessary Labour Time theory of value is one variety of the Labour Theory of Value, it's more the other way round: if the SNLT is true, then the LTV must be as well. Of course not all Labour theories of Value are true, for instance not one which says that the value of a commodity is determined by the actual amount of labour incorporated in it (actual labour time taken to produce it, from start to finish) nor one which says that the value of a commodity is determined by the labour added at the last stage of its production. Both, incidentally, misunderstandings about Marx's LTV.

    #130736
    Sympo
    Participant
    ALB wrote:
    Actually, as the Socially Necessary Labour Time theory of value is one variety of the Labour Theory of Value, it's more the other way round: if the SNLT is true, then the LTV must be as well. 

    Does that mean that it's the idea of SNLT that convinces you that the LTV is correct?Why are you a proponent of the idea of SNLT? What makes it a reasonable concept?

    #130737
    ALB
    Keymaster
    Sympo wrote:
    Does that mean that it's the idea of SNLT that convinces you that the LTV is correct?

    No.

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