This program was last modified at 14:35 on 3/5/2008.

Model 3. version 3. Total value Simulator with a financial sector This model extends model 3 version 2. This is the input page for a web interactive perl model that estimates Total Marxian value.

     This model facilitates comparison of total Marxian value with NIPA U.S. GDP estimates. It allows sensitivity analysis of total Marxian value to changes in 38 input parameters. It also can be used to simulate the behavior of total value that is consistent with the input parameters over a five year period. In addition, it examines the distribution of value and use value between classes and the relationship between the conditions of production and the nominal wage in the productive sectors. The model has 38 input parameters. This allows for more realistic simulation than model 3 version 2. The input section appears at the bottom of this page with default values set up as values for the input parameters. You can change the default values to what you consider to be more appropriate. Be sure to hit the send button.

     This model represents an advance over model 3 version 2. It incorporates a simple model of unemployment, growth, and inflation while estimating the general rate of profit and incorporating a financial sector. The total value of equity, outstanding debt and real estate are estimated based on It also facilitates comparison with NIPA GDP estimates. This allows for more detailed and useful simulation. The details of model 2 which form the basis of model 3 version 3, how it can be used and its limitations will appear in the year's December issue of   Research in Political Economy. The citation will be: Estimating Gross Domestic Product with Surplus Value, forthcoming, Volume, 20, Research in Political Economy. December 2002.

     One important aspect of this model is that it allows the linkage of value estimation or simulation to the conditions of production. Each of the output tables can potentially be used to assess the impact of the conditions of production on the value and issues related to distribution, value creation, GDP, wages, growth, inflation and the rate of profit. Model 3 version 3. is a version of model 2 described in that article noted above. This is the beta version of model 3. version 3. It includes 39 input parameters. This model has a financial sector. The model for the financial sector is primitive. Several stages of conceptual development and interpretation are required before the model of this sector will be both theoretically consistent and potentially be emprically tested. The requirements for this involve development of several more fundamental models before any reasonably realistic financial sector can be added. This is a preliminary feasibility test for some aspects of such a model. This is still a consistency model and not yet a true accumulation model. In our opinion, a true accumulation model would have the number of productive workers in future periods as an output of the model instead of as in input. The results are interesting none the less. The default values are based on our estimate of magnitudes that seem reasonable and could be obtained from government and market website sources. Not all of them are currently linked to the model. This will be done in the future. This model can theoretically be used to analyze accumulation but not in the systematic manner of a true accumulation model. The growth the number of productive workers, the partial organic composition of capital, and the subsistence are included in this model. The relationships required for accumulation and the matching of outputs and inputs required for two departments are not yet incorporated in this model. In our opinion, a true accumulation model to be developed will incorporate two departments and ensure consistency between accumulation and the technical composition of capital. This model still needs addtional conceptual development. It is not as free of errors as model 2 or model 3 versions 1 and 2. It currently has 15 output tables. Output of table 8 examines GDP for the U.S. in 2000. Table nine examines the impacts of the real economy on the stock market, credit market and real estate market. Output table 9 is extremely naive and requires significant conceptual and empirical revision. Value can be used to estimate GDP. It includes a rough estimate of constant capital. Constant capital is calculated by multiplying the partial organic composition of capital by variable capital. To estimate GDP estimates are requried of the number of working days per year and the organic composition of capital. We refer to the partial organic composition of capital because the constant capital, C, in the ratio C/V only includes raw materials, auxiliary materials, semifinished goods and depreciation productively consumed during the year. The Marxian concept of the organic composition of capital would include in C the value of fixed capital that retains its form at the end of the year (in the productive sectors). The value of the private fixed capital stock might be an estimate of this fixed capital (in productive sectors). In any event, we did not use all of C in the ratio of the partial organic composition of capital. Therefore, we refer to it as the partial organic composition of capital.

     This is a computer designed to facilitate sensitivity analysis and simulation of the impact of conditions of production on value creation and ex post output, financial markets, growth, inflation and unemployment. It is in the process of development. As such, not all conceptual errors have been eliminated. The ranges of default values for suggested input variables still need refinement (December 17, 2002) These issues will be addressed later as the model is revised and corrected. It represents a demonstration in the use of economic modelling with a Common Gateway Interface (CGI) program. The model has a java applet at the end of table 15 that can be used to graph Marxian total value against NIPA estimates of GDP and Estimates of total outstanding equity based on the model to those based on the Federal reserve flow of funds.

      This model facilitates the analysis of changing conditions of production on value production and distribution. This models is abstracted to the level of aggregate social captialand not is applicable for specific firms. Various mediations are necessary for value to transmit itself to the market and firm level. More advanced versions of this model will address this issue in the future.

     There are a number of limitations and problems remaining with this model. This model still has a high level of abstraction. Use of realistic numbers at this level of abstraction will generate output that has meaning only in an approximate form. Refinement is needed before more reasonable implications can be generated for concrete situations. Money has been introduced at a high level of abstraction. We assume for simplicity that gold serves as commodity money but only as a measure of value not a circulation medium. Here it must be remembered that the verison of the Marxian view (that is as we interpret it) is not the quantity theory of money. But for the purpose of this version of the model, more money tokens (bank notes relative to gold) will result in higher nominal prices. Gold is used as a measure of value or as a standard of price. It may have useful applicability under qualified circumstances. More realistic values and validation of the input factors need to be addressed.

     The values of the input parameters must be entered all at the same time by hitting the submit button at the end and only after all the default values have been examined and/or altered. (There are 39 default values in total) Do not hit the submit button until all the default values have been considered and decisions made about altering them. After the submit button is pressed, if the program is working the output page and the a summary of submitted inputs will appear. The output currently consists of two input summary tables and fifteen output tables on the composition of value and estimates of GDP.

     Note: At the end of the eighth output table is a link to an applet that will graph the value of the model's estimate of total Marxian value and the NIPA estimate of GDP. The total Marxian value of the graph is based on the input parameters either the default values indicated or those proveded by the web user. There is alos a link to an applet that will graph the implied value of outstanding stock based on the Marxian model and compare it to the value of outstanding equity from the Federal reserve flow of funds.

     This model incorporates the following interpretation of Marx. A discussion of this issue appears in the article cited above. Marx had two definitions of Socially necessary abstract labor. These will be designated SNAL1 and SNAl2. SNAL1 refers to the labor hours (HOL) embodied in any commodity being equal to the abstract labor hours embodied in surplus value, variable capital and constant capital. SNAL1 includes hours of living labor (HOLL) reflected in S and V and hours of dead labor (HODL) embodied in C. Both HOLL and HODL are measured in hours of standard abstract labor (HOL). The second definition (SNAL2) is a measure of necessary labor hours that productive workers for reproducing themselves exclusive of the labor embodied in surplus value or constant capital. SNAL2 is measured in HOL per unit of labor capacity(L). The printout of this page should be printer friendly for Internet explorer browsers.

     Below are the default values for the input parameters that we are currently using in this model.

 

Model 3. Version 3. Input page for Total Marxian Value simulator.
Factor 1. Length of working day in hours (number between 3 and 18):
LOWD = Length of working day (hours) Try an initial value of 10. Range (1 < LOWD< 18) See the Bureau of Labor statistics for the number of hours worked per week. (Bureau of Labor Statistics estimates) Their Preliminary estimate for average weekly hours of production or nonsupervisory workers on private nonfarm payrolls for 2000 was 40.47 hours per week for cconstruction, mining, manufacturing and transportation and utilities. (December 19, 2002.) This works out to about 8.094 hours per week for a 5 day week. For this model, these estimates have to be later converted to yearly estimates. For now we will remain with the current set up.
Factor 2. Intensity of labor relative the the normal working day (a number between 1 and 3):
IOL=intensity of labor (1 = normal -- a factor of two will double the HOLLs (of normal work day intenstiy) used each hour of the working day. This model assumes that HOLDs are doubled also. This will be modified in another version. If this factor is changed the model changes the output of use value produced and transferred per hour proportionally for the more intense day. It will also change the labor time required to reproduce L proportionally. This factor is only meanful for comparisons between nations, between different branches of industry within a country and for change within an economy over time. Try initial value of 1. Range (1<IOL< 3)
Factor 3. a measure of the productiveness of labor per hour of the working day in subsistence goods. (.20 - .65):
Productiveness of labour (a measure of use value produced each hour of the working day) This factor is estimated based a day of standard intensity. The model will adjust this for changes in intensity. This factor impacts on the value of labour-power and the magnitude of surplus-value if "the products of the industries affected are articles habitually consumed by the labourer." (K. Marx, Capital, Vol I. International Publishers, p. 525) "...But an increase in the productiveness of labour in those,branches of industry which supply neither the necessaries of life, nor the means of production for such necessaries, leaves the value of labour-power undisturbed." (K. Marx, Capital, Vol I. International Publishers. p. 315.) Try initial value of .61. Range(.2<POL<.45) In this model the relationship of the measure of the productivity of labor to the measure of the subsistence bundle is an important ratio determining the rate of surplus value (if the length of the working day is fixed). Empirical work on this ratio would be particularly important. For the measure of the subsistence bundle, productive workers would be the relevant category. Shaikh and Tonak estimate that productive workers in the U.S. economy make up about 36.3 % of total employment. This was for 1989. (Shaikh and Tonak, 1994, page 303.) This work also indicates that the rate of surplus value (rate of exploitation ) for the U.S. of productive workers 244 percent in 1989. (Shaikh and Tonak, 1994, page 333.) The BLS has indicted that manufacturing output per hour has increased by 35.66% between 1989 and 2000. This value has been updated for that implied by Shaikh and Tonak's work for 1989 by this factor to bring it up to 2000.

Input table ... continued

Factor 4. A measure of the use value of the subsistence bundle per unit of labor capacity (labor power/worker) per day (1.0 - 2.6):
A measure of use value in the subsistance bundle. There is a difference here between the mass of necessaries and a measure of the use value obtained from them. We will ignore that for now. This is implicitly assumed for chapter 17. by Marx to be constant. Try an initial value of 1.149. Range(1<NUSVO<2.6) The ratio of this number relative to the productiveness of labor is important in determing the rate of surplus value if the length of the working day is held constant The empirical estimate for of the rate of surplus value is 244 %. The ratio of the subsistence bundle to the productiveness of labor can be varied to get an estimate consistent with a specific rate of surplus value. The results will then have implications for GDP, real and nominal wages and the other output variables of the eight output tables of the computer model.  
Factor 5. Number of units of labor capacity (labor power/Workers) per Capital
NOW = Number of units of labor capacity (L) per capital. (million)Try an initial value of 49. (range 40<NOW< 60, a rough range of productive labor in the U.S. in millions)  There were about 135 million people employed in the U.S. labor force in 2000. However, not all produce surplus value. Shaikh and Tonak have estimated the proportion of the labor force that is productive - that is productive of surplus value. Of the 135 million employed in 2000 about 49 million according to Shaikh and Tonaks proportion for 1989 would be productive of of suplus value. Check out the Bureau of Labor Statistics for estimates of the labor force.
Factor 6. Reckoning name of commodity money ($35 and $450/oz of gold)
IDG = reckoning name of money (currency units per ounce of gold) Try an initial value of $275/ounce. Range (35<275<450)   This was the average daily price in London for 2000. It is assumed this is determined by the international market. Check out the London Bullion Market Association London Market Statistics on Precious Metals for recent market estimates.
Factor 7. Socially Necessary abstract labor(SNAL2 used - the second definition here) measured in HOLLs per ounce of gold 5 to 25 (hours/oz)
IV = labour value of gold (socially necessary hours of abstract labour [SNAL2] per ounce) Try an initial value of 4.8399. Range(5<IV<20) This factor needs more conceptual development. The best way of estimating this factor would be to have an estimate of socially necessary labor (SNAL1) HOLs requirement. This method is difficult since SNAL is not directly observable. A indirect way of estimating this is to take the market price of gold (estimate of reckoning value of money) and divide it by the average hourly wage. This provides a rough estiamte of the socially necessary abstract labor (SNAL1) HOLs per ounce of gold. This procedure assumes that the reckoning name of money reflects the value of gold. In the short run this may not be the case. If you have the partial organic composition of capital and the rate of surplus value, SNAL2 can be estimated. You have to provide an estimate of SNAL2 (HOLLs per unit of L) but the model then converts this to SNAL1 to meet the theoretical needs of the relations in the model. This is an important.For an example and more details go here.
Factor 8. Partial Organic Composition of Capital (OCC)(3.36)
Factor 9. Number of working days per year (214)
Factor 10. Number of working days per year required for subsistence (214)
Factor 11. Ratio the fixed capital stock at the beginning of the year stock to variable capital used per year. Default is for 19.0654 in the U.S.(19.0654)
Factor 12. Proporition of the stock of capital at the begining of the year that is depreciated during the year. (0.1066)
Factor 13. Inventory of raw materials auxiliary materials and semifinished goods. (billions)
Factor 14. Proportion of the labor force that is Productive in the Marxian Sense. (0.363)

Input table ... continued

Growth Factors: Factors 15. 16. 17. 18. 19. 20. 21. 22. 23. and 24. represent annual rates of change in key variables: 15. the length of the working day, 16. the productiveness of labor, 17. the intensity of labor, 18. the reckoning name of money, 19. the SNAL2 per ounce of gold, 20. a measure of the subsistence bundle, 21. the number of productive workers, 22. the number of working days per year, 23 the number of subsistence working days per year and 24. the partial organic composition of capital. Assumed annual rates of change in these ten factors are indicated below.
Factor 15. Increment to the length of the length of the Working day (%)
ITWD = Increment in percent to the length of the working day (sensitivity analysis factor) Try an initial value of -0.33 Range (1<ITWD<10) %
Factor 16. Increment to the productiveness of labor (%)
ITPO = Increment in percent to the productiveness of labor(sensitivity analysis factor) Try an initial value of 0. Range (1<ITPO<10) %
Factor 17. Increment to the intensity of labor (%)
ITIOL = Increment in percent to the intenstity of labor(sensitivity analysis factor) Try an initial value of 0. Range (1<ITIOL<10) %
Factor 18. Increment to reckoning name of money (%)
ITIDG = Increment in percent to the reckoning name of money(sensitivity analysis factor) Try an initial value of 0. Range (1<ITIOL<10) %
Factor 19. Increment to SNAL2 per ounce of gold
ITIDG = Increment in percent to SNAL2 per ounce of gold (sensitivity analysis factor) Try an initial value of 0. Range (1<ITIV<10) %
Factor 20. Increment to the use value in the subsistence bundle
ITsubbun = Increment in percent to index of use value in the subsistence bundle (sensitivity analysis factor) Try an initial value of 0. Range (1<ITsubbun<10) %
Factor 21. Percentage increment to the number of productive workers
ITIDG = Percentage increment in number of productive workers (sensitivity analysis factor) Try an initial value of 0. Range (1<ITNOW<10) %
Factor 22. Percentage increment to the number of working days per year
ITWDPY = Percentage increment in number of working days per year (sensitivity analysis factor) Try an initial value of 0. Range (1<ITWDPY<10) %
Factor 23. Percentage increment to the number of subsistence working days per year
ITWDPYS = Percentage increment in number of subsistence working days per year (sensitivity analysis factor) Try an initial value of 0. Range (1<ITWDPYS<10) %
Factor 24. Percentage increment to the partial organic composition of capital
ITOCC = Percentage increment to the partial organic composition of captial(sensitivity analysis factor) Try an initial value of 0. Range (1<ITOCC<10) %
Factor 25. Annual Percentage point increment to the percentage of total employment that is productive
PPCPR = Annual Percentage point increment to the percentage of total employment that is productive. Try an initial value of 0. Range (1<PPCPR<10) %
Factor 26. Annual basis point change to the ratio between fixed capital and variable capital
IPOFC = basis point annual change to the ratio between fixed capital and variable capital. Try an initial value of 0. Range (1<ipofc;10) %

Input table ... continued

Financial Sector factors: Factors 27. 28. 29. 30. 31. and 32. These include: 27. proportion of surplus to industrial profits, 28. proportion of surlus to rents, 29. the price earnings ratio for all equities, 30. the rate of interest on long term bonds, 31. the long term interest rate on mortgages and 32. the expected appreciation on rental properties. Assumed annual rates of change in these ten factors are indicated below.
Factor 27. The proportion of Industrial Profits to surplus.(proportion)
sigone = proportion of industial profits to surplus (sensitivity analysis factor) Try an initial value of 0.509. Range (0<sigone<1-sigone) %
Factor 28. The proportion of interest payments to surplus.(proportion)
sigtwo = proportion of interest payments to surplus (sensitivity analysis factor) Try an initial value of 0.401. Range (0<sigtwo<1-sigtwo) %
Factor 29. Price earnings ratio on all equities.
PER = Price earnings ratio on all equities (sensitivity analysis factor) Try an initial value of 5.74 Range (3.63<PER<17) %
Factor 30. Rate of interest on long term bonds (proportion)
RLTB = Rate of interest on long term bonds(sensitivity analysis factor) Try an initial value of 0.0755. Range (0.06<RLTB<0.10) %
Factor 31. Rate of interest on mortgages (proportion)
LTMR = Rate of interest on long term bonds (sensitivity analysis factor) Try an initial value of 00.752. Range (0.06<LTMR<0.110) %
Factor 32. Expected appreciation on rental property. (proportion)
EAPR = Expected appreciation on rental property(sensitivity analysis factor) Try an initial value of 0.0621. Range (0.021<EAPR<0.10) %

Input table ... continued

Financial Sector Growth factors: Growth Factors 33. 34. 35. 36. 37. and 38. These include growth factors for: 33. proportion of Industrial profits to surplus value, 34. proportion of interest payments to surplus value, 35. the price earnings ratio for all equities, 36. the rate of interest on long term bonds, 37. the long term interest rate on mortgages and 38. the expected appreciation on rental properties. Assumed annual rates of change in these ten factors are indicated below.
Factor 33. Increment to the proportion of industrial profits to surplus value.(%)
ITsigone = increment to the proportion of industrial profits to surplus value(sensitivity analysis factor) Try an initial value of 1. Range (0<ITsigone<2) %
Factor 34. Increment to the proportion of interest payments to surplus value.(%)
ITsigtwo = increment to the proportion of interest payments to surplus value (sensitivity analysis factor) Try an initial value of -20. Range (0<sigtwo<2) %
Factor 35. Increment to the price earnings ratio on all equities.(%)
ITPER = Increment to the price earnings ratio on all equities (sensitivity analysis factor) Try an initial value of 0. Range (0<PER<4) %
Factor 36. Increment to the rate of interest on long term bonds (%)
ITRLTB = Increment to the rate of interest on long term bonds(sensitivity analysis factor) Try an initial value of 0. Range (0<RLTB<4) %
Factor 37. Increment to the rate of interest on mortgages (%)
ITLTMR = increment to the rate of interest on long term bonds (sensitivity analysis factor) Try an initial value of 0. Range (0<ITITLMR<10) %
Factor 38. Increment to the expected appreciation on rental property. (%)
ITEAPR = Increment to the expected appreciation on rental property(sensitivity analysis factor) Try an initial value of 0. Range (0<EAPR<10) %

Input table ... continued

Label for first year of GDP estimate. For example if the first year is 2000 enter 2000.
Label for the country for which you will estimate nominal GDP. The default is the U.S.
Enter the values for the estimated value of nominal GDP you wish to use as a benchmark to compare against the values for GDP estimated by the Marxian Model. The default is the estimated U.S. GDP starting in 2000 by the Department of Commerce. (current $ billions) year 1.
year 2.
year 3.
year 4.
year 5.
offest = offical estimates of nominal GDP ($ billions). Estimates can be obtained at Bureau of Economic Analysis Web Site For more recent estimates see Bureau of Economic Analysis News Release. estimates.
Enter the source for the estimated value of nominal GDP you used above that is used as a benchmark to compare to the estimate of the Marxian Model. The default is the U.S. Department of Commerce.
Enter the values for the estimated value of real GDP you wish to use as a benchmark to compare against the values for real total value estimated by the Marxian Model. The default is the estimated U.S. GDP starting in 2000 by the Department of Commerce. (2000 chained $ billions) year 1.
year 2.
year 3.
year 4.
year 5.
offest = offical estimates of real GDP ($ billions). Estimates can be obtained at Bureau of Economic Analysis Web Site
Enter the source for the estimated value of real GDP you used above that is used as a benchmark to compare to the estimate of the Marxian Model. The default is the U.S. Department of Commerce.
Enter the values for the estimated value of the GDP implicit deflator you wish to use as a benchmark to compare against the values for the price level based on the Marxian Model. The default is the U.S. GDP implicit deflatior with a base year of 2000 starting in 2000 estimated by the Department of Commerce. (index) year 1.
year 2.
year 3.
year 4.
year 5.
offest = offical estimates of the GDP deflator (index). Estimates can be obtained at Bureau of Economic Analysis Web Site
Enter the source for the estimated value of the GDP deflator you used above that is used as a benchmark to compare to the estimate of the Marxian Model. The default is the U.S. Department of Commerce.
Enter the values for the estimated annual rate of change in the value of the GDP implicit deflator you wish to use as a benchmark to compare against the values for annual inflation based on the Marxian Model. The default is the annual rate of change U.S. GDP implicit deflatior with a base year of 2000 starting in 2000 estimated by the Department of Commerce. (index) year 1.
year 2.
year 3.
year 4.
year 5.
offest = offical estimates of the annual rate of change in the U.S. GDP implicit price deflator (index base = 1996.). Estimates can be obtained at Bureau of Economic Analysis Web Site
Enter the source for the estimated value of the annual rate of change in the U.S. GDP deflator you used above that is used as a benchmark to compare to the estimate of the Marxian Model. The default is the U.S. Department of Commerce.
Enter the values for the estimated value for the annual rate of growth in nominal GDP you wish to use as a benchmark to compare against the values of the rates of growth in total value estimated by the Marxian Model. The default is the estimated by the department of Commerce starting in 2001. (percentage) year 1.
year 2.
year 3.
year 4.
year 5.
offest = offical estimates of GDP growth (percentage). Estimates can be obtained at Bureau of Economic Analysis Web Site
Enter the source for the estimated value of the annual rate of change in the U.S. GDP that you used above that is used as a benchmark to compare to the estimate of the Marxian Model. The default is the U.S. Department of Commerce.
Enter the values for the estimated value for the annual rate of growth in real GDP (2000 base year chained) you wish to use as a benchmark to compare against the values of the rates of growth in real total value estimated by the Marxian Model. The default is the estimated by the department of Commerce starting in 2001. (percentage) year 1.
year 2.
year 3.
year 4.
year 5.
offest = offical estimates of real GDP growth (percentage). Estimates can be obtained at Bureau of Economic Analysis Web Site
Enter the source for the estimated value of the annual rate of change in the U.S. real GDP that you used above that is used as a benchmark to compare to the estimate of the Marxian Model. The default is the U.S. Department of Commerce. (base year = 1996 chained dollars)
Enter the values for the estimated equity value you wish to use as a benchmark to compare against the values for equities estimated by the Marxian Model. The default is the estimated from table B102 in the flow of funds starting in 2000 by the Federal Reserve. ($ billions) Nonfinancial Corporate Business Equity Market Value year 1.
year 2.
year 3.
year 4.
year 5.
offest = offical estimates of GDP ($ billions). Estimates can be obtained at Federal Reserve Flow of Funds Web Site
Enter the source for the estimated value of equities you used above that is used as a benchmark to compare to the estimate of the Marxian Model. The default is the U.S. Federal Reserve.
Enter the values for the estimated value of outstanding credit you wish to use as a benchmark to compare against the values for outstanding credit estimated by the Marxian Model. The default are the values from the Table of Outstanding Public and private Debt of the Bond Market Association. ($ billions) year 1.
year 2.
year 3.
year 4.
year 5.
ofdebt = offical estimates of value of outstanding debt ($ billions). Estimates can be obtained at Federal Reserve Flow of Funds Web Site
Enter the source for the estimated value of outstanding debt you used above that is used as a benchmark to compare to the estimate of the Marxian Model. The default is the The Bond Market Association.
Enter the values for the estimated real estate value you wish to use as a benchmark to compare against the values for value of rental properity estimated by the Marxian Model. The default are the market values from the flow of funds starting in 2000 by the Federal Reserve. ($ billions) year 1.
year 2.
year 3.
year 4.
year 5.
offest = offical estimates of GDP ($ billions). Estimates can be obtained at Federal Reserve Flow of Funds Web Site
Enter the source for the estimated value of real estate you used above that is used as a benchmark to compare to the estimates of rental property from the Marxian Model. The default is the U.S. Federal Reserve.
Enter the values for the estimated total labor force and for the rate of growth of the labor force. This will generate a trend of labor supply over time. The default is the estimated from for the CPS seris ID LFU40000000 for the BLS web site (millions $) year 1.
year 2.
year 3.
year 4.
year 5.
average rate of growth in labor force.
lftota = offical estimates of labor force size (millions). Estimates can be obtained at Bureau of Labor Statistics Web Site

Much of this model is based on chapter 17 of K. Marx, Capital, Vol. 1. International Publishers, pp. 519-530. We have made some additions that will be duly noted. Marx assumes that 1. commodities are sold at their values; and 2. the price of labour-power rises occasionally above its value but never sinks below it. It is also assumed that constant capital is equal to zero for this model. (Marx, Capital vol. 1, International publishers. p. 510.)

Copyright © 2001-2008 Victor Kasper, Jr. All rights reserved.

 

Qualifications

  •      Note that the total subsistence bundle does not increase automatically in the model when the length of the working day increases. This issue has to be addressed in this model by adjusting the input of the subsistence bundle. The subsistence bundle should increase to a degree as the length of the working day increases.

  • The productivity of labor per each hour in the working day should also increase as the degree of labor intensity increases. It should increase as a declining proportion of the increase in the intensity of labor. Labor becomes increasing exhausted as intensity increases and less productive per unit of labor life force expended. It has sometimes been noted that fewer hours can sometimes generate greater use value per hour for this reason. This model increase productivity of use value in proportion to intensity of labor. This aspect of the model is to be refined later.

  • The subsistence bundle currently increases in proportion to the intensity of labor. This is incorporated into the relations of the model. An adjustment has to be made later to this. The subsistence bundle should probably increase at a factor that is an increasing proportion of the increase in labor intensity. We suspect that the probability of accident and propensity to become ill would most likely increase as intensity increases.

  • One issue that has to be developed in detail is the concept of the use value. We require a measure of the use value in the subsistence bundle or the real income necessary to purchase the subsistence bundle.

  • Total Marxian value produced or transferred is not conceptually totally comparable to GDP. Shaikh and Tonak have discussed some of the conceptual issues for comparing GNP to Marxian Total value and Gross Factor Product. See pages 72-75 in their book cited above. Their estimate of Marxian Total value is above and their estimate of Marxian Gross value added is below NIPA GNP estimates. Our estimation procedure is based on simulation and is not identical with Shaikh and Tonak's procedures who were working closing with NIPA and IO accounts for their data. A major issue in the comparison is the treatment of Marxian constant capital as an intermediate good. Intermediate sales should not appear in GNP based on the conventional interpretation of GDP as the opportunity costs of resources, depreciation and indirect business taxers. However, our interpretation of Marx would suggest that the 'labor value' of constant capital (constant circulating capital) used up from stocks (auxillary materials, raw materials and semifinished goods - turned over several times during the year) and depreciation on fixed capital should appear in Marxian Total Value. The interpretation of GDP as a sum of prices final goods and services, we believe indicates that the value transferred to these goods should include the socially necessary abstract labor transferred to the final goods from constant circulating capital. Our estimates of Total value would be more closely associated with GDP. We believe there is a distinction between constant capital as it manifests itself in its physical form and the labor value of the constant circulating capital that is transferred to the final goods and services.

  • There are two factors that we are considering adding to the model. One is the increased wear and tear on workers as a result of an increase in the working day. This would be a increasing proportion to the length of the increase. The second is a factor for the increased wear and tear on workers due to incresing the intensity of labor. Here the increase in the subsistence bundle should be an increasing proportion of the intensity of labor. The model currently incorporates it as increasing in constant proportion to the intensity of labor.

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Copyright © 2001-2008 Victor Kasper, Jr. All rights reserved.