In reply to John's OPE-L 4101: : Let's be clear here before moving on to the next set of questions. : Are you saying the value of 5th machine in my example is not transferred : to the output? Yes, that's what I'm saying. Other firms, which don't overestimate their needed capacity, will produce the same amount of output at lower cost per-unit. The value of the commodity is determined by the average labor-time socially necessary to reproduce it. Thus, if there are enough of these lower-cost producers, they "set" the value of the commodity. The labor expended on the 5th machine will have been wasted, not formative of value. : Now if the 5th machine is never used or : becomes even useless due to a slump, it seems to me that its value must : still be accounted for. I agree, but "accounting for" it isn't the same thing as saying it is formative of value. It can be accounted for as a loss. I still don't think you've answered one of my questions, namely "do you agree or disagree that in Marx's theory, what allows the value of a means of production to be preserved (by being transferred) is that it is used in production." To me, this is the crux of the matter -- the specification of a *process* by which things happen. It seems to me that once we have the concepts and processes clear, the computation of profit rates is exceedingly simple. Jumping ahead to a discussion of profit rates without the conceptual clarification just creates additional problems. If what you are trying to do, however, is work backwards from intuitively "plausible" conclusions regarding profit rates to the concept of value transfer needed to obtain these intuitively "plausible" profit rates, all I can say is that I think this is indeed aackwards. There is no a reason why the implications of theory should conform to a priori intuitions. All theory would be superfluous in that case. To reject theoretical results because they don't conform to one's intuitions is dogmatism. I hope this isn't what you're trying to do. Andrew Kliman
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