From: ajit sinha (sinha_a99@YAHOO.COM)
Date: Fri Jun 09 2006 - 06:34:37 EDT
--- ajit sinha <sinha_a99@YAHOO.COM> wrote: > > Ian, I took a look at your corn-economy model. I > think > it confirms the conceptual error I am talking about. > In your corn model, when the rate of profit is zero > your real cost accounting and Sraffa's labor-value > accounting give the same result, that is the > labor-value of 1t. of corn is 500 hours. Then you > cut > the wages of workers in half, and a rate of profit > of > 66.3% emerges. Now, in this case also, Sraffa's > labor > accounting gives you the same labor-value equal to > 500; however, your real cost accounting says that > the > labor-value in the second case must increase to 1000 > hours. At this stage, I think, you should have > paused > for a minute and thought in English rather than > mathematics. How could one by simply taking food > from > the laborers and giving it to the capitalists > increase > the labor-values of goods? You are saying that the > labor-time needed to produce a ton of corn doubles > simply by taking half of the corn from the mouth of > the laborers and giving it to the capitalists. Now, > there has to be something wrong with such a > statement, > isn't it? > > The whole question of numeraire and also money in > one > good corn model makes no sense to me. Here again it > seems you have allowed mathematics to take > precedence > over common sense. Any way, let's stick to my above > comment for now. We can discuss all the other issues > later, but this one needs to be settled first. > Cheers, > ajit _____________ Ian, I thought some elaboration might help (I just wrote a comment but I have a feeling that instead of sending it I might have deleted it, so I do twice the labor but don't produce any more value). Any way. Let us take your corn example and work with it. 2 t. of corn + 4000 hr. of labor --> 10 ton of corn Sraffa's labor value in this system is straight away 500 hr. of labor per ton of corn. Note that to deduce labor value you only need methods of production. There is no need to know wages or profits or whether the system is in equilibrum or not. But in your system you first impute a wage of 0.002 ton of corn per hour to workers. This puts your system into self-rplacing state, and you derive the labor value equal to 500 hrs of labor per ton of corn in this system. Then you go on to stipulate that the wages of the workers have been reduced to 0.001 ton of corn per hr. of labor. This generates 4 tons of corn as surplus in your system, which gives 4/6 or 66.3% of rate of profits to the capitalists. For Sraffa, this makes no difference to the labor-values of corn. But for you this increases the labor-value of corn from 500 to 1000. How does this happen? You argue (implicitly or explicitlt) that capitalists consumption of the 4 tons of corn should be put back as input in the system. Thus your method of production changes to: 2 t. of corn as raw mat.+4t. of corn as cap. con. +4000 hrs of labor--> 10 t. of corn This obviously makes the value of corn equal to 1000 hrs of labor per unit of corn. Now the absurdity of this change in the method of production should be obvious. But I'll not belabor on that. I'll just underline a few more obvious points: (1) when you strip the system of all unnecessary complications, then you can see the whole idea of 'money capital' which is produced in capitalist household and price of money capital, etc. melts away. The firms have corn and corn is what they need as raw material as well as for wages and the devidends to the capitalists are also paid in corn. Nobody in the system needs anything else than corn. Thus my point that the firms always have their needed commodity capital should be clear now. (2)Your procedure amounts to throwing back physical capitalists consumption on the side of the inputs in the methods of production. (3)In a multiple commodity model you cannot properly allocate capitalists consumptions as inputs for various sectors unless you solve for rate of profits from Sraffa's surplus equations. Thus your attempt to simultaneously determine all prices and the rate of profits along with all capitalists consumption treated as inputs in the system is not possible--the system lacks one equation. The whole idea of a separate money capital sector, which produces a commodity called money capital--a commodity which does not appear in the input output structure but somehow gives you an independent equation is not making any common sense. I hope this was helpful. Cheers, ajit sinha __________________________________________________ Do You Yahoo!? Tired of spam? Yahoo! Mail has the best spam protection around http://mail.yahoo.com
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