Value: what is the unit? !!

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Value: what is the unit? !!
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Some say:

“What is the measure of value? Socially necessary working time.

But since I do not know how to measure socially necessary working time, I will use another measure: quality of goods, constant prices, purchasing power parity prices, international dollars, blablabla ...”

NO, NO, and NO!

You CAN NOT change the marxist measure, only because you DON’T KNOW calculate it.

Can you seriously imagine a researcher writing in a peer-reviewed journal:

"I do not know how to measure the MASS of this thing, so I measured the VOLUME: I hope it will not change anything."

This is NOT scientific.

You have TO STOP on this problem, and DO NOT continue your reasoning until you have solved it AT LEAST PARTIALLY, so that you can at least have a ROUGH idea of where you are going.

Let's do this.

First: do we need to reinvent the wheel? Of course not: Karl Marx has already solved this question.

“The total labour power of society, which is embodied in the sum total of the values of all commodities produced by that society, counts here as one homogeneous mass of human labour power, composed though it be of innumerable individual units.”

The Capital, chapter ONE, section ONE

Thank you, Karl Marx, for this simple and clear definition of the value.

Total labour power of society <=> values of all commodities produced by that society

OK. What is total labour power of society? Go to the Word Bank Databank for a ROUGH idea of this. → World Development Indicators.

Country: World;

Series: Labor force, total;

Time: select all, or 50 years.

Apply change.

Ok: Labor force was 3,395,965,212 workers in 2015. In fact this is a very rough figure, an approximation.

What is the definition of Labor force for the Word Bank?

“Labor force comprises people ages 15 and older who supply labor for the production of goods and services during a specified period. It includes people who are currently employed and people who are unemployed but seeking work as well as first-time job-seekers. Not everyone who works is included, however. Unpaid workers, family workers, and students are often omitted, and some countries do not count members of the armed forces. Labor force size tends to vary during the year as seasonal workers enter and leave.”

Ok, this is not perfect, but this is ok: difficult to have accurate statistics on a global scale.

What is “all commodities produced by that society”? That is GDP. What is the measure of GDP? Quantity of goods and services. What are the units of GDP? Current price, constant price or purchasing power parity price of this heterogeneous set of things. If we want to compare the labor force to the GDP for one year and for the world, we have to use the purchasing power parity measure. What is it?


GDP, PPP (Current International $): 115,165,700,164,514

Ok: we have our equivalence.

3,395,965,212 workers working in 2015 create the value of PPP $115,165,700,164,514.

Fine! We can calculate the production value of the famous “average worker” that all stupid bourgeois economists say that is impossible to calculate!

PPP $115,165,700,164,514/3,395,965,212 = PPP $33,912

In 2015, one average worker working for one year create PPP $33,912 of value.

Ho, là, là! Very difficult to calculate!

But how calculate the other lengths of the economy? By the extreme power of a sophisticated mathematical operation: the division. I give you an example, because this will blow your mind:

What is the 2015’s GDP of China in value?

GDP, PPP (Current International $): 19,815,111,099,767.4

China GDP, PPP / World GDP, PPP = China production value / World production value

19,815,111,099,767.4 / 115,165,700,164,514 = x / 3,395,965,212

19,815,111,099,767.4 / 115,165,700,164,514 * 3,395,965,212 = x

x = 584,300,949.593.

In 2015, the production value of China was 584,300,949.593 average workers working for one year.

But the real number of China’s workers was 804,772,331. So the production value of 804,772,331 China’s workers working for one year in 2015 was equal to the production value of 584,300,949.593 average workers working for one year in 2015.

The Marxist theory raises no mathematical difficulty, but only theoretical or econometric difficulties. For example, you can ask the calculation of purchasing power parity, which is not very satisfactory today: we need the sum of commodity values at world average prices, and not at prices in the United States. You can ask for a better and more accurate assessment of labor force, excluding more precisely workers who do not produce value.

But this is not economical questions, only econometric questions. The more accurate the econometric measure is, the more accurate the economic result is.

So: how to calculate the gross capital formation in value? This is not the rate of profit, but this is necessary to calculate it. You can try from the data of the World Bank.