A reply to Allin's ope-l 1196. He asks what I think is wrong with the
analysis in which nothing changes but labor-time requirements for
production and the profit rate remains unchanged.
Answer: in itself, nothing is "wrong," it just isn't consistent with
Marx's value theory.
Illustration:
assume that in period 1, 50 qtrs. of corn are used as seed, 30 are
paid as wages, 50 units of living labor are extracted, and the output
is 100 qtrs. of corn. Assume the input value of corn equals 1, or
determine the output value simultaneously with the input value. In
either case, the output value equals 1, and the profit rate is 25%.
Now assume the same seed corn, corn-wage, and output figures for period
2, but assume living labor extracted is 30 units. Then the temporally
determined output value of corn in period 2 is 0.8
[1*50 + 30]/100 = 0.8
so that the total value of output equals the total value of outlays:
0.8*100 = 80 = 1*50 + 1*30
and the rate of profit is zero.
Obviously, this is because surplus-value, 30 - 1*30, equals zero.
However, the simultaneously determined input = output value of period
2 equals 0.6, so that c is transformed into 30, v is transformed into
18, s is thus transformed into 30 - 18 = 12 and the profit rate is
transformed into 12/(30+18) = 250nce again.
Now THIS is a REAL "transformation problem."
As I post I've just sent shows by means of a similar numerical example,
this problem is NOT a matter of mere accounting. The relations of
determination differ when valuation is simultaneous and when it is
temporal.
Andrew Kliman