# [OPE-L:2985] Re: Need 3

From: C. J. Arthur (cjarthur@pavilion.co.uk)
Date: Tue May 02 2000 - 18:26:54 EDT

Since neither fred nor anyone else has replied to Andrew's 'Need 3' I take
the liberty of doing so even tho' I am sorry to say I have not closely
followed their debate.
>
>////////////////////////////////////////////////////////////////////////
>
>Table 1
>========================================================================
> Constant Cap.
> Input Total ============= Vbl. Output Rate of
>Yr Price Cap. Seed Other Cap. Output Profit Price Profit
>
>1 £2/q 60 q 20 q 20 q 20 q 100 q 40 q £2/qr 66.7%
> £120 £40 £40 £40 £200 £80 66.7%
>
>2 £2/q 60 q 20 q 20 q 20 q 200 q 140 q £1/qr 233.3%
> £120 £40 £40 £40 £200 £80 66.7%
>
>\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\
>
>
>Marx considers a farmer who produces corn by means of seed corn and other
>inputs. All costs are measured in terms of both money and corn. Marx
>assumes that, although "work was carried on in the same conditions" in
>both years, using "the same amount of labour," the output of year 2 is
>double that of year 1. The total value of this output, however, does not
>increase. "Since the 200 qrs [produced in year 2] are the product of the
>same amount of labour [as in year 1], then once again they are likewise =
>only £200. Thus, only £80 profit remains, which is now, however, = 140
>qrs" (Marx 1991:267). Marx thus suggests that, contrary to Ramsay's
>claim, the rise in productivity causes neither profit nor the rate of
>profit to rise in year 2.
>
>These conclusions are incompatible with the interpretation that the value
>transferred is determined by the input's replacement cost. Had Marx
>computed the value transferred from the seed corn in year 2 at £1/qr,
>profit would have exceeded £80. Used-up constant capital would have
>constituted a smaller share of the output's total value of £200, and thus
>surplus-value or profit would have constituted a larger share, even if
>variable capital is assumed not to change. Marx's conclusion that profit
>remains £80, despite the rise in the physical surplus from 40 qrs to 140
>qrs, is valid only if the value transferred from the seed corn is
>determined by its pre-production value of £2/qr.
>
>
In answer to the above gloss on Marx on Ramsay:
a) I do not agree that the reproduction value at the beginning of year 2 is
£1/qr. It is unchanged at £2. This is because the new technique has not yet
been applied. It is just a glint in the farmers' eye. Only at the end of
year 2 is the new snlt *socially validated*. Thus only at the start of year
3 is unit reproduction value £1 and the seed corn remaining from the end of
year 1 suffers moral depreciation accordingly.
b) An interesting contingency is this: suppose the new technique is applied
first in the Southern hemisphere and transport costs are negligible. In the
Northern Hemi corn arrives half way through year 2 at the new value. Then
even if the Northern seed corn has already been productively consumed it is
retrospectively devalued accordingly.
c) I do not understand Andrew's numbers in his second para. I would say
that in the case under (b) the output price for year 2 would be £180 (not
£200) because less value is transferred from the seed corn; and the
*realised* profit would be 60 over 120 i.e. 50%.
d) In year three the investment would only be £100 if seed corn was
purchased at £1/qr and the profit rate would go up to 80 0f the output
price remained £180.
*However* the input value per quarter would now be *below* £1 because 200 q
at the end of year 2 would be valued at £180. And the output price would
also decline below that.
We would be into a real time iteration of input/output price discrepencies.
e) The iteration might be considered not as a real time one but as
telescoped back to the start of year 3 on the grounds that the new
technique has been validated by then i.e. continual moral depreciation of
seed corn is applied all at once; the hit is taken straight away.
f) Just as in the transformation problem there is a choice of 'temporal' or
'simultaneist' iteration. In the one case value would decline to its
asymptotic limit. In the other case the excess price would decline
gradually to meet the new value.
It all depends what you want to mean by value.
(Naturally to isolate this issue theoretically we must apply cet par, e.g.
the price of labour power stays the same notwithstanding the cheaper corn.)
Chris A