Sean Andrews wrote: > I'm trying to work out a few aspects of the phrase (and concept) "high value > added labor" as it is use in mainstream, particularly international or > transnational economics. In its use, it appears to be speaking about value > in almost Marxist terms, but its meaning seems to be the opposite. It seems > to take the market price as the index and claim that the additional value is > evident by the product being able to sell by a larger percentage than it was > before--this spread being relatively larger than that of "low value added > labor." <
In orthodox economics, "value added" refers to the difference between total revenues (measured in prices, not Marxian values) and total raw material costs (ditto). The latter includes the cost of intermediate goods (produced by other businesses).[*] Perhaps it should be called "price added," since neither inputs nor outputs are measured in Marxian values, but in orthonomics, the "value" of a commodity = its price in a perfectly competitive market (with no externalities, I guess). (Thus, Gerard Debreu titled his utopian novel "The Theory of Value.") Value added (converting the raw materials into higher-valued output) is seen as being the result of combining the "factors of production," which include labor [-power], land (gifts of nature), and capital goods. In many textbooks, "entrepreneurship" is seen as a factor of production. Despite the valuation issues, Marx used a similar concept of value added: total value _minus_ constant capital. The difference is that in volumes I and II of CAPITAL, he measured both terms in value terms (socially-necessary abstract labor). This is the same as the variable capital plus surplus-value. He saw value-added as totally the result of living labor being done, since he knew about the creative power that labor has (as opposed to the zero creative power of material objects) and he was looking at things from the social or macro perspective (the big picture). It's actually not that different from the view of orthonomics, because for Marx, the means of production had the use-value of raising living labor's productivity. The difference is that for Marx, new value (value added) and surplus-value cannot be created simply in exchange (except on the micro level). If capitalist A buys a machine from capitalist B adds to surplus-value for A, it's a redistribution from B, not the creation of new surplus-value on the macro level. The machine may make labor-power more productive, but it only produces surplus-value if the capitalist keeps wages from rising with labor productivity. High-value added labor is high-productivity labor, except instead of using total output in the numerator to measure labor productivity (total output/labor input) for a sector, value-added is in the numerator. This makes sense for the smaller, more dependent, and poorer countries that import a lot of stuff and then add only a little value to it. If you use total output in the numerator, that misses the small amount of value actually added in (and presumably the income paid to) the small country. The country usually is much more interested in the income its people receives than in the total revenue earned. [*] net value added would exclude depreciation costs, while gross value added would not. -- Jim Devine / "Nobody told me there'd be days like these / Strange days indeed -- most peculiar, mama." -- JL. _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
