Re: [OPE] Reply to critics

There was a Dept IIa and IIb... why not continue to use these as they were
meant?

Paul B.

-----Original Message-----
From: ope-bounces@lists.csuchico.edu [mailto:ope-bounces@lists.csuchico.edu]
On Behalf Of Paul Cockshott
Sent: 20 October 2010 12:04
To: 'Outline on Political Economy mailing list'
Subject: Re: [OPE] Reply to critics

Gerry:

well, as you know, there was no Dept. III in Marx's reproduction schemes.
-------------------
That is true but he introduces a general methodology that can readily be
Extended to include a third department producing only luxury goods in which
case we have

I =C1+v1+s1
II =C2+v2 +s2
III =c3 +v3 + s3

Now consider the exchange between sectors In all cases we remove internal
consumption the particular category
Of commodity produced in the departments
We have

c2+c3= v1 + s1
   The purchases of means of production by depts. II and III have to add up
to the new value created in I

C2+s2 = v3 + v1
    The net output of the wage goods department has to be bought out of
wages paid in the other depts.

S1 + s2 = c3 + v3
    The net luxury production in dept 3 has to be sold to capitalists of
other depts.

Now consider your proposal that s3 can be spent on outputs of depts. I and
II, this is not possible for two
Reasons
a) there is no spare wage goods or constant capital elements on which it can
be spent, all of these have already been used up.
b) if capitalists in dept III cut their luxury expenditure and spend their
surplus in other departments, their own revenues fall by an exactly
equivalent amount, thus if they don't spend their profits internally, they
cease to make the profits as there is no other market for their output.

Hence the surplus in dept III can only be unproductively consumed and never
constitutes part of capital.

The University of Glasgow, charity number SC004401
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Received on Wed Oct 20 18:14:34 2010