[OPE-L:1342] Re: Gold, The Universal Equivalent & Rent

Paul Cockshott (wpc@clyder.gn.apc.org)
Wed, 6 Mar 1996 13:55:13 -0800

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John
----

Given both of us are confining our questions and answers,
I tend to agree with what you say. However, given that
most computations of relative prices and the rate of profit
are based upon sets of material inputs and outputs where
the number of products is equal to the number of processes
and the rate of profit is uniform, how can the money commodity
which does earn rent in both forms be included?

Paul
----
The problem is that most such models are very over simplified,
they aggregate all the producers in an industry into a single
producer. As such, they can not model differential rent, since
this involves viewing an industry in terms of its component
enterprises.

To examine the question one needs a much more detailed disaggregated
model. I suspect that such models go well beyond what the mathematical
apparattus customarily employed by Marxist economists will support.
There seem to be two ways you can go beyond this.

1. Is to use the type of approach pioneered by Farjoun and
Machover and use statistical or stochastic models to look
at things. These models seem to undermine many of the conclusions
that people had previously arrived at from linear algebra
approaches.

2. To construct micro-realist computer models, which disaggregate
things down to the level of the individual firm, and which
simulate populations of hundereds of firms. Such work is in
its infancy.