From: Paul Cockshott (wpc@DCS.GLA.AC.UK)
Date: Wed Jun 07 2006 - 05:19:57 EDT
However -- and this is important -- the firm revenue is transferred to capitalist accounts. A part of this revenue is simultaneously returned to firm accounts to serve as working capital. The net transfer is the profit income. -------------- That goes very much against what actually happens in capitalist accounting practice. The gross revenue actually stays in the firms accounts and portion of it then goes to the rentiers as dividends or interest. ---------------- We can interpret the equations to say that the working capital is at the beginning of the period and the commodity-capital is at the end of the period; or we can interpret it the other way around; or we can interpret it as a simultaneous bi-directional flow of money and goods. Ultimately this model is a simultaneous circular flow -- so you can take your pick where you want to place your marker on the roundabout. ---------------------- I would disagree, both coexist. There is a stock of commodity capital and a simultaneous stock of money used to facilitate the exchange of the commodity capital. If you introduce the notion of money capital you have to account for it separately as a distinct stock. ---------------------------- > > They purchased it from other firms, so they collectively do > not change their holdings of working money capital. Agreed, under conditions of simple reproduction. > The only possible change occurs as a weekly fluctuation of the relative > cash balances of the working and capitalist class as a result > of the weekly payment of wages, and its reflux during the week > as workers buy consumer goods. > > Moreover, the amount of money working capital is undetermined > by the equations, it depends on the velocity of circulation of > money. I think this is an interesting question and a topic for further work. There are a number of ways to go in deducing the amount of money required to circulate commodities in linear production systems. Andrew Trigg has a good discussion on this topic in his yet to be published book, "Marxian Reproduction Schema". Ian In a system without a money-commodity then "r" has dimensions $/$, i.e. it is the price of money-capital per unit of money-capital supplied. For example, if a capitalist receives a return of 0.5$ per 1$ supplied then r=0.5 $/$. In other words 1 unit of money-capital costs r$. --------------- $/$ is simply a dimensionless scalar. Profit is always profit per unit time and expresses the exponential growth rate of capital with respect to time. I don't see that this commits one to an Austrian view. > This dimensional difference indicates that the r can not be a price. If there is a dimensional error in the circular flow then there is necessarily a dimensional error in Sraffa's equations. ------------- I said that the error was in the treatment of r as a price. Sraffa does not do this.
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