Andrew writes(in part)
>
>In relation to this, let me note that Duncan's value added equation
>
>p(t) - p(t)a(t) = l(t)
>
>can be decomposed as follows:
>
>p(t) - p(t-1)a(t) - [p(t) - p(t-1)]a(t) = l(t)
>
>or
>
>p(t) - p(t-1)a(t) = l(t) + [p(t) - p(t-1)]a(t).
>
>Multiplying by output, X, and dropping time subscripts on X, a, and l, this
>gives us:
>
>p(t)X - p(t-1)aX = lX + [p(t) - p(t-1)]aX.
>
>p(t)X is the value of the product and p(t-1)aX is the consumed part of the
>constant capital-value advanced (equal to the whole of constant capital-value
>advanced in the absence of fixed capital). Both Duncan and I are willing to
>take these as *data* (i.e., as the labor-time magnitudes corresponding to
>money price data). The difference between them, p(t)X - p(t-1)aX, is, as I
>interpret Marx, the value added through extraction of living labor in
>capitalist production, lX.
This is the point of disagreement, since p(t)X - p(t-1)aX includes the
revaluation of constant capital through the period of production due to
price changes, which I argue should not be imputed to the extraction of
living labor in capitalist production.
>
>In Duncan's formula, this isn't the case, due to his *revaluation* of the
>constant capital, the [p(t) - p(t-1)]aX term. That this formula revalues
>constant capital has nothing to do with different concepts of value added,
>pace Bruce. It *was* p(t-1)aX --- this is a *datum* --- and it gets
>transformed into p(t)aX.
>
>The above does not dispose of the claim that Marx revalues the constant
>capital, which is the main basis of Fred's and Bruce's opposition to the TSS
>interpretation. It does, however, indicate the following: If one agrees,
>as I think Duncan does, that changes in the (aggregate) value of inventories
>over the production period are not attributable to the (aggregate) value added
>by the extraction of living labor in capitalist production, then the
>temporalist equation, which excludes them, is right, and the simultaneist
>equation, which includes them, is wrong.
Here I confess I'm puzzled either by language or by a switch of concept. It
seemed to me that Andrew's examples, in setting p(t)X-p(t-1)aX = l(t)X were
attributing the change in the value of constant capital through the period
of production to the extraction of living labor. Am I missing something?
>The simultaneist equation counts
>these changes in the aggregate value of inventories as part of value added
I'm not sure what exact model the phrase "simultaneist equation" refers to,
but this would not be true of the Okishio model, for example.
and
>thus either (a) fails to attribute all value added to living labor extracted,
>or (b) uses "value added" to mean something different from the value of the
>product minus the value laid out for means of production consumed.
As I've pointed out "value added" as it is generally used does mean
something different from the (money) value of the product minus the (money)
value laid out for means of production consumed, the difference being the
IVA in a circulating capital model.
Duncan
Duncan K. Foley
Department of Economics
Barnard College
New York, NY 10027
(212)-854-3790
fax: (212)-854-8947
e-mail: dkf2@columbia.edu