Social Relations Theory of Value, And Why Bargaining Power Matters

 I'm going to do the thing where I throw in a link again.

https://www.desmos.com/calculator/wjeyvfmnwr

I've been looking into the social relations theory of value as presented in Unorthodox Marxism by Michael Albert & Robin Hahnel, and I have to say its an interesting thing to play around with. Considering this hasn't really been mentioned by the duo since its publication, I'm going to hopefully mess around with this and see what I can do to extend this.

For the time being, I'll explain what this actually is and what I hope to do to advance it.

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The picture above demonstrates the equations necessary to the social relations theory of value, or SRTV for shorthand.  R, K, L and W represent your raw materials, capital/machinery (& their sectors), labor, and the wage respectively; N represents the bargaining power of the sector and r represents the rate of profit.

The basic idea is to try and demonstrate the existence of unequal bargaining power between capitalists; a quality of real economies that Albert & Hahnel feel is left out in both orthodox Marxist and Sraffian theories. However, an interesting thing is that despite being presented as an alternative to Sraffian price theory, it strikes a close resemblance to it.

For example, take this phenomena that Sraffa found with his standard commodity:

As he says here & demonstrates in the graph, this demonstrates that the price of a commodity cannot fall at the same rate as the wage/profit rate.

Then, as demonstrated by the Desmos link I shared before, here's price 3 & wage 3 (N_R = .67, P_R = 1.96):

A similar trend is noticed; the price line (dotted) doesn't fall at the same rate as the wage/profit rate (full) line.

This is not to say Albert & Hahnel ripped off of Sraffa; I do think, through all of this, that they offered an interesting price theory that I'll take a while to really chew through. Rather, I'm actually excited of this resemblance, because this makes understanding it more easier as much has been written already on Sraffa and his work.

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Because of the resemblance to Sraffian prices, what I hope to do is extend it to similar lengths as Sraffa originally did and as Vienneau is currently doing now. My main hopes for the time being is to extend the SRTV to 3 commodities and to hopefully include other factors of production like land; I already added markup pricing a la Vienneau's An Opportunity for the Working Class with Increased Markups as a start to this extension.