# [OPE-L:4249] Re: TSS transformation procedure

andrew klima (Andrew_Kliman@msn.com)
Mon, 24 Feb 1997 11:02:57 -0800 (PST)

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I'm going to try to answer Alejandro Ramos' questions in ope-l 4242 and 4245,
although they are not too clear to me.

First of all, I'm not sure whether the questions pertain to *valuation* or to
*output-input flows* (reproduction). I'm going to assuming the latter is the
case. (Note that the movement in time is from outputs to inputs, not the
reverse.)

Second of all, note that Bortkiewicz deals only with *simple reproduction*.
It is therefore not appropriate to pose the question of what is his
"conception of constant capital." Only his handling of constant capital under
the assumption of simple reproduction can be discussed. And therefore it is
inappropriate to counterpose the TSS conception of constant capital to
Bortkiewicz's - I don't even know if he had a general conception. All we can
discuss is how he and we deal with simple reproduction.

Thus, when Ale writes, concerning Bortkiewicz, "This means that the amount of
means of production consumed during t+1 is equal to the means of production
supplied at the end of t+1," this is true of how I deal with matters in the
case of simple reproduction as well. It is necessarily true, given simple
reproduction.

When Ale writes: "This means that the amount of means of production consumed
in t+1 is equal to the amount of means of production supplied at the end of
period t, at the price prevailing in t," I think this is *always* the case, as
long as all of the output of means of production is realized.

Ale: "What would be the specification for variable capital? I think the
reasoning cannot be the same as constant capital."

It is important to distinguish between variable capital, a sum of money-value
used to purchase labor-power that expands value, and means of subsistence. If
workers are hired at time t, the *variable capital* is committed at that time,
and cannot be revalued retroactively. This has NOTHING to do with when
workers are paid. The firms incur contractual obligations they cannot get out
of (usually) once the workers enter the factory. Workers are simply extending
credit if they are paid only later.

Therefore the magnitude of variable capital is not altered by when workers are
paid. It is not altered by when they consume. It is not altered by whether
they are paid money, or in kind. It is not altered by changes in the value
of labor-power.

Ale is imagining the situation in which variable capital is committed at time
t, and workers receive money wages at time t+1. This is fine, and it happens,
but this is not how Marx's schema of reproduction deal with the issue. And,
to my knowledge, Bortkiewicz says nothing about it either. Note that,
moreover, Bortkieiwicz does NOT make a distinction between how he treats the
reproduction of the different parts of social output. So if we're
concentrating on the validity of Bortkiewicz's alleged proof of internal
inconsistency, we can't start assuming this.

I also think that it is a big mistake to conflate the issues of reproduction
and the formation of production prices. As I have noted, if the physical
quantities supplied and demanded are (un)equal, then the monetary supplies and
demands must necessarily also be (un)equal. That's what's needed for an
equalized profit rate. The reproduction of any specific set of use-value
relations, from the start of one period to the start of the next, is not.

Andrew Kliman