If you would add up all the labour that goes into the things you consume on an average day, how many hours do you consume a day?
Extra clarification: https://mishathings.com/2021-08-23-how-many-people-work-for-me.html
If you would add up all the labour that goes into the things you consume on an average day, how many hours do you consume a day?
Extra clarification: https://mishathings.com/2021-08-23-how-many-people-work-for-me.html
Yeah, the calculation can get impractically hard to do.
This gets harder to calculate because of integrated costs of production (e.g., the work that went into the machine that another worker used to create your commodity, as well as the work that went into creating that machine, etc.).
However, we’re in luck because the price of commodities is more closely correlated with labor costs than with profits (or ‘markups’); variations between prices and labor costs are, on average, 15%, meaning there’s a very high correlation between both (Shaikh’s Capitalism book, p.21 for a quick summary, a couple graphs of the data in p.396-7, more diverse sources of evidence and theoretical contextualization in p.433-442). This means how much you pay for something can serve as a quick-and-dirty proxy of the integrated labor-cost necessary to produce a commodity, give or take 12-15%. What remains, then, is to estimate a wage (or wages, in the integrated version). In the end, only with prices and estimated wages, I think the question in this post can be reasonably well answered.
Calculating it is both harder and easier than it seems.
Edit: Clarity and page numbers.
Thanks for the reference, I’ve added the book to my reading list.
I see. Assuming that prices are mostly made up of labour costs (?), I “only” need to know the average hourly wage/salary in the supply chain-network of the products I consume could get me a rough estimate of the labour time that went into it.
Is this in Shaikh’s book? If so, do you maybe have a page reference for this? Do you mean that on average, prices are for 85% made up of labour costs? And the rest is profit [1] and rent [2]?
[1] what workers effectively pay their bosses to be allowed to use their machines
[2] what farmers need to pay to landowners to be able to use their land
Sure. I updated the original comment to include page numbers. I also suggest watching the video lectures. He covers this topic in his 10th lecture on the course based on the book.
I’m still thinking about this, now that I revisited the topic, but I think it’s fair to say that prices of commodities are ‘composed’, on average, of 85% labor costs. The reason I’m not entirely sure is because it’s different to say that something deviates by an amount, and that one quantity is 85% of another. However, statements from his book like the following make me think it’s fair to use the ‘composed of’ meaning: “In this metric the distance between market prices and direct prices is about 15%, that between prices of production at the observed rate of profit and integrated labor times is about 13%, while that between market prices and production prices at the observed rate of profit is once again about 15%.” (Shaikh 2016, 439)