the production price of a commodity is not at all identical with its value. […] It has been shown that the production price of a commodity may stand above or below its value and coincides with it only in exceptional cases. (Marx 1894, 892)
In the TSSI, the
value is quite distinct from the price, and the difference is a quantitative one. In exchange the values that have arisen in the manner we have just described will be exchanged against money and this money, in exactly the same way but with new proportions, will represent value, measurable in hours. Some will realize more hours than their value, and some will realise less. Conversely, since every amount of value may equally well be represented in money, we may assign a money magnitude to their value and we will find that their value, measured in money, is in general systematically different from their price. (Freeman 1998, 11)
Two main assumptions of the TSSI are that:
- “valuation is temporal, so input and output process can differ”;
- “values and prices, though quite distinct, are determined interdependently” (Kliman 2007, 2).
As indicated in the introduction, there is an ongoing theory debate in Marxist political economy about value-creation in the information economy. This discourse has theoretical importance, but has remained on a purely philosophical and theory level devoid of applications to empirical economic analysis, especially mathematical and statistical political economy. This chapter takes a different approach and is especially interested in empirical analysis of available statistical data. The TSSI is an approach that is grounded in the labour theory of value and mathematical and statistical analysis. The TSSI is the most thorough and rigorous mathematical formulation of the relationship between labour and time, for which it uses the category of the MELT, a category introduced first by Ramos (1998 [1999]). Furthermore the TSSI allows conceiving the information economy as value-creating, which stands in contrast to some other contemporary approaches such as certain versions of Autonomist Marxism.
The TSSI implies that for calculating the value of a commodity (measured in hours or units of money) and how it differs from the commodity price (also measured in hours or units of money), the wage (variable capital) needs to be transformed into “the value of the money used to purchase that worker’s labour power” (Freeman 2010, 595), which is done based on a ratio called the MELT; the MELT is obtained by calculation ratio of the whole economy’s total money to total labour-time (measured in hours) during a specific period of time, such as one year (Freeman 1998, 13). It indicates the degree of value measured in money that workers create on average in one hour of labour. The MELT’s unit of measurement is £/hour (or another currency). When Marx speaks about value, he mostly means units of labour-time, but sometimes also monetary values. The MELT is a way of connecting these two measures of economic value.
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Themes