Re: [OPE-L] SV: [OPE-L] what is irrational in the functioning ofcapitalism?

From: Rakesh Bhandari (bhandari@BERKELEY.EDU)
Date: Thu Nov 30 2006 - 21:15:33 EST 

Yes, Diego,  he would have to allow for this wine model since it's
clearly no less realistic than his own! That's your point, right?
The debate about full automation also misses a couple of Marx's
points. 1. Capital can't in fact make full use of the technical
knowledge of human kind--having to pay only for labor power, capital
does not calculate  full labor costs in decisions to mechanize and
consequently fetters advances in mechanization and 2. mechanization
is likely to cause convulsive crises along the way.
Rakesh


>Hi Rakesh,
>
>Do you know if Spencer Pack thinks that the following is a model of
>total automation?
>
>             28 bottles of wine => 56 bottles of wine
>           16 bottles of wine => 48 units of gold
>           12 bottles of wine => 8 units of wheat
>           56 bottles of wine => 56 bottles of wine, 48 units of
>gold, 8 units of wheat
>
>
>Cheers,
>     Diego
>
>
>
>
>
>
>----- Original Message -----
>From: <mailto:bhandari@BERKELEY.EDU>Rakesh Bhandari
>To: <mailto:OPE-L@SUS.CSUCHICO.EDU>OPE-L@SUS.CSUCHICO.EDU
>Sent: Thursday, November 30, 2006 6:09 PM
>Subject: Re: [OPE-L] SV: [OPE-L] what is irrational in the
>functioning ofcapitalism?
>
>Ajit and others may be interested in this post I sent four years ago to OPE-L
>
><http://ricardo.ecn.wfu.edu/~cottrell/OPE/archive/0208/0056.html>http://ricardo.ecn.wfu.edu/~cottrell/OPE/archive/0208/0056.html
>
>A model of total automation; Spencer Pack gives a simple example.
>
>
>
>28      56      0       0
>16      0       48      0
>12      0       0       8
>56      56      48      8
>
>
>What we have in the first column is inputs of computers (28,16,12, 56
>total) needed to make 56 computers, 48 units of gold, and 8 units of
>wheat.
>
>That is, 28 computers => 56 computers
>           16 computers => 48 units of gold
>           12 computers => 8 units of wheat
>           56 computers => 56 computers, 48 units of gold, 8 units of wheat
>
>
>The economy is in simple reproduction because it produces only 56 new
>computers, and 56 computers are needed to produce computers, gold and
>wheat at the same scale again.
>
>There is no direct labor in this economy; there is not even indirect
>labor as computers, gold and wheat are themselves the products of
>commodities--the literal production of commodities by commodities.
>
>According to Pack this economy can be solved for relative prices and
>a uniform profit and absolute prices as well if we assume by
>definition that the price of one unit of gold equals $1.
>
>(1 + r)  (28pc) = 56 pc
>(1 + r)  (16pc) = 48
>(1 + r)  (12pc) = 8pw
>
>r is the profit rate while pc and pw are the unit prices of computers
>and wheat.
>
>  From the first equation we know the profit rate has to be 100%; price
>of one computer is $1.50 and price of one unit of wheat is $4.50.
>
>So contrary to the LTV, there can be a positive rate of profit and
>relative prices in a totally automated economy.

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