From: Ian Hunt (ian.hunt@FLINDERS.EDU.AU)
Date: Wed Sep 12 2007 - 19:41:30 EDT
Dear Fred, One point I forgot to add in the previous email. The system there translates into the system used in the main text as follows: If ti is the average turnover of capital in industry i, then ti = Sj (cij . tij + vli . ti ) / Sj (cij + vli ). Then p (C + vl + Kr) = p is equivalent to p (C + vl)(I + Tr )= p, where I is the identity matrix and T is the diagonal matrix with average industry turnover periods ti down the diagonal. Cheers, Ian >Quoting Ian Hunt <ian.hunt@FLINDERS.EDU.AU>: > >>Dear Fred, >>My paper explicitly refers to the turnover period of capital in >>industry i, so that implicit in that is the possibility that. It is >>not the same as Medio's. It is based in fact on Brody and I only >>follow Medio in taking prices to be prices per unit of value (Medio's >>theory is does not distinguish between fixed and circulating by >>making the assumption you mention). > >Hi Ian, > >Thanks for your clarification. > >I will take another look at Brody (although unfortunately neither I nor >my library has a copy). Maybe Brody is an improvement over Sraffa on >the issue of turnover times. We shall see. > >I wondered what the Sraffians think about Brody’s treatment of fixed >capital and turnover time, and I took a look at Kurz and Salvadori’s >Theory of Production. There is one reference to Brody in 500 pages, and >it is about heterogeneous labor, not turnover time. > >I will try to return a consideration of Brody's treatment of fixed >capital and turnover times, when I get a copy of the book, and as time >permits. In the meantime, would you please summarize for me your >system of equations that determines prices of production and the rate >of profit. This is not clear to me from your article. Thanks. > >Comradely, >Fred > >>The turnover of capital in industry i = the turnover of fixed capital >>in i plus the turnover of period of constant capital in i plus the >>turnover period of variable capital in industry i. These turnover >>periods are not assumed to be equal across industries in any of these >>cases. I get turnover periods by distinguishing between stocks and >>flows. The rate of profit, of course, is the annual rate of profit on >>my model but it can rise and fall because of changes in turnover >>periods. Thus one counteracting tendency to the tendency of the rate >>of profit to fall is that the turnover period of constant and >>variable capital in some industries declines, due eg to "just in >>time" inventories of parts. The applicability of "just in time', of >>course, varies between industries. >> >>I don't think that my model makes any assumption about when >>commodities are exchanged, although it does assume that the rate of >>profit on capital is a temporal rate. It does make some >>idealizations, of course: prices per unit of value are really >>averages of a range of prices per unit of a range of values, etc. The >>assumption that the price of inputs is the same as the price of >>outputs is based on the fact that purchases and sales of a product >>intermingle, so that the price of a commodity as an input and its >>price as an output will be determined on the same day for at least >>some firms. >> >>Turnover periods are different because different stocks of money >>capital are required to generate different sorts of flows: relating >>the distinction between stocks and flows to exchange is just >>confusing: in fact, for really small turnover periods (less than 1, >>say, if a year is taken as the reference point) you have to have >>stocks of capital replenished by sales that occur in shorter periods >>than a year (one of the bases of the separation between commercial >>and industrial capital is just that effect) >>Cheers, >>Ian >> >>>Quoting Ian Hunt <ian.hunt@FLINDERS.EDU.AU>: >>> >>>>Dear Fred, >>>>The paper is titled 'An Obituary or a New Life for the Tendency of >>>>the Rate of Profit to Fall' and can be found in Review of Radical >>>>Political Economics, 15:1, 1983, pp. 131-148. It has got a few typos >>>>in it (URPE did not in those days always return the text to authors >>>>for checking) but these are relatively easy to sort out - if you have >>>>any trouble let me know and I will tell you what they are supposed to >>>>be. I am trying to produce a decent scanned copy: if I do, then I >>>>will send that electronically, with typos fixed. >>>> >>>>By turnover period, I mean the sum of the turnover period of fixed >>>>capital plus the turnover period of constant capital plus the >>>>turnover period of variable capital, which can of course all differ >>>>and contain different variants. These differences are explicitly >>>>taken into account in the paper. >>> >>>Hi Ian, >>> >>>The differences in turnover periods between fixed (constant) and >>>circulating (constant and variable) capital are not what I am talking >>>about. Rather, I am talking about the differences in turnover periods >>>of circulating capitals in DIFFERENT INDUSTRIES. These differences are >>>not taken into account in your paper. Your paper is based on Medio’s >>>model which explicitly assumes an equal turnover period in all >>>industries. Medio wrote (p. 332): “Consider an economy of n >>>industries, each of them producing a given amount of a single commodity >>>in a GIVEN INTERVAL OF TIME, let us say a YEAR.” (emphasis added) This >>>is the assumption I am talking about. >>> >>>And my point is that this is a necessary assumption in Sraffian theory >>>because, if there were unequal turnover periods, then the rate of >>>profit determined by the simultaneous equations would be equalized >>>across different turnover periods, which in turn would imply unequal >>>annual rates of profit, contrary to the prevailing tendency. Plus, >>>simultaneous determination requires that all commodities are exchanged >>>at the same time, which in turn requires that they all must have the >>>same turnover period. >>> >>>Comradely, >>>Fred >>> >>> >>>---------------------------------------------------------------- >>>This message was sent using IMP, the Internet Messaging Program. >> >> >>-- >>Associate Professor Ian Hunt, >>Dept of Philosophy, School of Humanities, >>Director, Centre for Applied Philosophy, >>Flinders University of SA, >>Humanities Building, >>Bedford Park, SA, 5042, >>Ph: (08) 8201 2054 Fax: (08) 8201 2784 >> > > > >---------------------------------------------------------------- >This message was sent using IMP, the Internet Messaging Program. -- Associate Professor Ian Hunt, Dept of Philosophy, School of Humanities, Director, Centre for Applied Philosophy, Flinders University of SA, Humanities Building, Bedford Park, SA, 5042, Ph: (08) 8201 2054 Fax: (08) 8201 2784
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