From: glevy@PRATT.EDU
Date: Sat Sep 29 2007 - 14:11:09 EDT
> Let me rephrase the question in terms of the rate of profit, a key > component of long-run equilibrium prices: which one of these two > theories more accurately describes how the rate of profit is determined > in the real capitalist economy? The two theories are: > 1. MARXIAN: the rate of profit that is equalized is the annual rate of > profit, which is determined by the ratio of the total surplus-value > produced in the economy as a whole during a year to the total capital > invested in that year. > 2. SRAFFIAN: the rate of profit that is equalized is the “week” rate > of profit (or some similar unit short period), which is determined > simultaneously with prices of production, including hypothetical prices > of production of partially used machines and partially finished > products which are not actually exchanged at the end of each week. > Which of these two theories do you think more accurately describes how > the rate of profit is determined in the real capitalist economy? Hi Fred: _Neither_ is an accurate description of the real process. The "Marxian" theory assumes the period of production analytic framework which bears little resemblance to real world contemporary capitalist production processes. It is a remanant of Physiocratic thought which needs to be transcended. In any event, if we are talking about the real world, I don't think that prices of production can be taken for granted or that market prices are in general "equilibrium prices". In solidarity, Jerry
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