From: Fred B. Moseley (fmoseley@mtholyoke.edu)
Date: Tue Sep 10 2002 - 10:39:28 EDT
On Fri, 6 Sep 2002, Gil Skillman wrote: > It occurred to me in my drive home last night that my argument against > Fred's first point is more general than suggested. > > Specifically, where Fred said > > >>1. Gold is a scarce, privately-owned mineral, and therefore the income of > >>the gold industry must contain a component of rent. In terms of Sraffa's > >>theory, this adds an unknown, without adding another equation, so that the > >>rate of profit is not uniquely determined by given technical conditions of > >>production and the wage rate. > > and I responded > > >Insofar as it is logically possible to imagine a world in which the > >realized level of this rent is zero, this observation doesn't rebut my > >point. What you assert here is, in effect, that by its nature, the > >production of gold *must* accrue a strictly positive absolute rent. Of > >course, the fact that gold is "privately owned" is not at issue; all > >commodities and means of production are privately owned under > >capitalism. "Scarcity" in the sense you intend it here only matters if > >the scarcity constraint is binding at the margin, which is once again a > >matter of historical contingency, not theoretical necessity. That is, one > >could without contradiction imagine the capitalistic production of gold in > >which the level of rent were in fact zero. (And not only *can* one, but > >the substance of your next point is that it's *quite plausible* to imagine > >a world in which the scarcity constraint on gold production is > >non-binding, since by your representation the supply of gold in > >circulation far exceeds the level of gold production!) And in that case, > >the inconsistency I asserted again arises. > > I should have instead said that if the presence of scarcity in Fred's sense > "adds an unknown" to the Sraffian equation system, it *necessarily* also > adds an additional equation in the form of the binding scarcity constraint, > which will generally take the form that the level of demand for gold equals > the constrained production of gold--thus creating the rent in > question. Therefore, whether or not the realized level of rent is zero, > the inconsistency I suggested in the original presentation of the scenario > remains. Gil would you please give the explicit formulation of this equation, so I can understand better what you are suggesting. Thanks, Fred
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