INDEX Introduction The model of Dumenil-Foley The model of Lipietsz The model of Morishima Conclusions Bibliography I. INTRODUCTION
The labor theory of value (LTV) plays a central and controversial role in Marxian Economic Analysis. The assertion that value is created in production and transferred in exchange is fundamental and has been a central concept for many different authors that have developed some Marxian categories.
At the core of the transformation problem underlies a tension toward the role of the LTV. As Foley (1982, page 41) affirms [sic] "in a certain sense, the choice of which of the propositions listed above should be maintained in generalizing the labor theory of value to situations where prices of commodities are not proportional to labor values expresses an understanding of what the labor theory of value means at its core. This is why seemingly technical controversies over the "transformation problem" had so much life and energy; they are in fact controversies over the meaning and coherence of the labor theory of value."
If the organic composition of capital is the same for all sectors in the capitalist economy then the quantity of abstract labor time embodied and commanded by one specified commodity is of the same proportion. In the one hand, the value of all commodities produced in society reflects the quantity of abstract labor spent in the production of these commodities. In the other hand, the total price for this production of new values is exactly the same value produced by total labor. Moreover, since the organic composition of capital is the same for all sectors then one has that individual prices are proportional to individual values and, looking at value as the quantity of labor directly and indirectly spent in the production of the commodity, then one obtains that there is no "sistematic" value deviation from prices. One has either Marx's, Ricardo's or even Solow's argument of working in a 'big factory' where values are produced under the same proportion between variable capital and constant capital for all sub-factories.
Marx derived from his conceptualization of the LTV that at the aggregate level total price should equal total value and total surplus should equal total profits. One could derive from this statement that at the individual level, the quantity of abstract labor embodied in the commodity might not reflect the same quantity of abstract labor commanded. Still, the point is that at the aggregate level this un-balanced condition should not hold. There should be conservation at the aggregate level. It is the breaking of this conservation law, or in other terms, the falling apart of the above two conditions i.e., 1) total price equals total value, 2) total profit equals total surplus which originates what nowadays is known as the Transformation Problem (TP). The possibility of breaking these conditions apart is obtained once different organic compositions of capital are allowed and one defines value as the direct and indirect quantity of abstract labor time spent in the production of the commodity, the approach followed by the classical tradition.
The object of this paper is to analyze the controversy paying special attention to a 'new' approach called as a new normalization procedure. The object is to emphasize how this controversy has risen a discussion toward the interpretation of the LTV where the notion of value to some extent has been separated from the concept of price. Prices will tend to assign or distribute value across society. This is not the case of the classical approach which hinges on the mixture of price and value simultaneously determined. For this new approach, the LTV is directed toward a conservation law not necessarily related to an accidental theory of price. Prices like money are a form of value. It is by following this fundamental principle that a serious attack is advanced toward a second fundamental issue from classical Marxism: variable capital. Variable capital according to these authors has being reduced to a technical coefficient, and the notion of class conflict driven out of the center of analysis by means of an augmented matrix and its maximum eigenvalue.
I structure the paper in three sections. The first section develops in general terms Foley-Dumenil's conception of value and exploitation and brings by these means their reading and interpretation of the LTV. The general character of price theories associated to this reading of LTV is analyzed. The second section opens with the analysis of Lipietz of price and value under a Dumenil-Foley (D-F) conception of value. This view allows the study of the relation between this new approach and the specific theory of price. Using the uniform rate of profits approach, I study the determination of the system and the implications for the Marxian conditions proposed. Finally, I present Morishima analysis as a contrast to our previous case and as a mean to explore deeper both conceptions of the LTV once Lipietz model has been set up. Solutions to the model and implications are studied to obtain a better framework of contrast to the Lipietz's model and D-F's in general. The iterative process is studied to see its contrast and similitude to the initial position of Morishima and the older tradition started from Bortkiewicz. I conclude with a series of comments toward the notion of the LTV and the value of labor power in both traditions and further developments for the exogenous variables determination of both models.
THE MODEL OF DUMENIL-FOLEY
In the one hand there is a tradition that pays special emphasis on a LTV focusing on the creation of value rather than its circulation. For this tradition lead by Dumenil (1980) and Foley (1982), Marx's main assertion on the labor theory...