Frequently Asked Questions about The Labor Theory of Value
3.2 Can you explain a more complicated example?
Consider another simple capitalist economy. This economy produces wheat and iron in a yearly cycle of production. Inputs and outputs are shown in the following table:
Example 3.2 Quantity Flows
74 qr. wheat & 37 t. iron & 592 workers -> 592 qr. wheat
18 qr. wheat & 3 t. iron & 48 workers -> 48 t. iron
These quantity flows can be broken down into two subsystems, one for wheat and another for iron, as shown in the following tables:
Example 3.2 Wheat Subsystem
73 9/17 qr. wheat & 36 13/17 t. iron & 588 4/17 workers -> 588 4/17 qr. wheat
14 12/17 qr. wheat & 2 23/51 t. iron & 39 11/51 workers -> 39 11/51 t. iron
Example 3.2 Iron Subsystem
8/17 qr. wheat & 4/17 t. iron & 3 13/17 workers -> 3 13/17 qr. wheat
3 5/17 qr. wheat & 28/51 t. iron & 8 40/51 workers -> 8 40/51 t. iron
The proportions of inputs and outputs in the wheat industry are the same in each subsystem and the overall economy. These proportions identify the production process used in the wheat industry. The proportions of inputs and outputs in the iron industry are also unchanged between the subsystems and the overall economy. The subsystems show a conceptual division of the given economy-wide quantity flows across subsystems.
39 11/51 tons iron are produced and productively consumed in the wheat subsystem. The net output of the wheat subsystem consists of 500 quarters wheat alone. In effect, the wheat subsystem is a vertically-integrated industry for producing wheat. 627 23/51 person-years labor is the only non-reproduced input in the wheat subsystem. Hence 627 23/51 person-years are embodied in 500 quarters wheat, or the labor value of wheat is 1 13/51 person-years per quarter.
The iron subsystem shows a vertically-integrated industry for producing a net output of 8 tons iron with inputs of 12 28/51 person years. The labor value of iron is 1 29/51 person-years per ton. Notice that the ratio of the labor value of iron to the labor value of wheat, 1 1/4 quarters per ton, has has the dimensions of a relative price.
One could also calculate labor values for this example by a reduction of all inputs to dated labor flows.
Che calcolo è stato effettuato per passare dal singolo sistema economico ai due subsitemi? Grazie per l'aiuto. Lanzo