From: Paul Cockshott (wpc@DCS.GLA.AC.UK)
Date: Mon Feb 20 2006 - 16:56:47 EST
Fred wrote Hi Paul, thanks for sketching this out. I certainly do not want you to spend weeks trying to work this out (especially since I don't think it can be done!). I don't see how your "work in progress" method adequately deals with the problem of unequal turnover times, but I will think about it some more. In the meantime, I have a few questions for clarification: 1. Are you suggesting that there separate equations for those sub-industries that produce "works in progress"? 2. Are the "works in progress" assumed to be sold at prices that are determined simultaneously with the prices of the regular output (similar to Sraffa's method of treating fixed capital as "joint products")? ------------ I am influenced by the fact that each day I pass the shipyards of Glasgow and see the 'work in progress' growing. In shipbuilding you have two processes - the ship is initially constructed on the stocks and then launched and fitted out. Thus one can think of splitting the industry into two one which builds hulls, the second of which fits them out. The work in progress is not normally sold, but if a new purchaser wanted to buy the yard, the value of the work in progress would be included in the value of the yard. This separation is evident in the shipbuilding industry, but one can imagine a similar process on a shorter time scale in other industries whose turnover is shorter. In my understanding the existence of work in progress is why turnover time varies between industries. --------------------------------- 3. Or, alternatively, are the "works in progress" not sold and thus do not have prices that are determined; i.e. the prices of the "works in progress" are not unknowns in these additional equations? But, in this case, wouldn't there be more equations than unknowns? 4. It seems to me that your method still assumes that the overall turnover period - the time elapsed from the purchase of inputs to the sale of outputs produced with these inputs - is still the same for all industries (as in Sraffa's formulation), and also seems to assume that the subperiods into which the identical turnover period is divided are also all the same, so that the exchange of all commodities for each other still takes place at the same time. This all-round exchange happens more frequently, but it is still a simultaneous all-round exchange of all commodities for each other. Do I understand your correctly? -------------- No you don't fully understand my point. There would be no turnover time in the Sraffian sense but a set of differential equations expressing the flow rates of production, and associated with these a set of standing stocks - of raw materials and work in progress. The effect of different turnover time is achieved by the ratio between output flow and the stock of work in progress. Turnover time is just another way of looking at the real continuous process of production with standing stocks. ---------------- 5. It also seems to me that the all-round exchange of all commodities at the same time is necessary for the simultaneous determination of the prices at which commodities exchange. Is this not correct? ------------------ What one requires is a rate of transfer of outputs between industries such that the rate of consumption of each product equals the rate of production. This is not really an exchange of commodities, since there would be a parallel set of banking entries, so it is purchase and sale rather than barter.
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