# [OPE-L:4037] Re: Re: Re: Re: Re: transforming the inputs (was no subject)

From: Allin Cottrell (cottrell@wfu.edu)
Date: Mon Oct 09 2000 - 16:27:05 EDT

```On Mon, 9 Oct 2000, Rakesh Narpat Bhandari wrote:

> Where are the time subscripts?

If you wish, you can think of the successive iterations as
representing time periods.  This won't do as real dynamics, but
if it helps...

> So I have made the reasonable assumption that productivity
> increases 5% a year.

No, that's a totally gratuitous complication.  There's no
increase in productivity.  The same hours of labour are
performed each "period", producing the same physical
outputs.  (The actual quantities of the outputs are
immaterial.)

If we can't work this out on the simplifying assumption of no
tecnical change, there's little hope of working it out with
ongoing technical change superimposed.

> >There's a problem though.  The iteration has stabilized (there's
> >no further tendency for the numbers to change when the algorithm
> >above is re-applied), but we can't give the table a coherent
> >economic interpretation.  Try cross-referencing the entries in
> >the "price" column and the column totals for c and v.
> >
> >Dept I has an aggregate price of output of 420.00, yet the
> >purchases of its output come to only 405.00.
>
> No, no! The \$405 represents the money sum invested to buy
> means of production as inputs at prices of production (t);
> the \$420 represents the money sum which is needed to buy *a
> greater physical quantity of means of production* as outputs
> at their prices of production (t+1).

round: 46
c	  v   profit    price   pvratio
I  243.00   81.00   96.00   420.00   1.1200
II  108.00  108.00   64.00   280.00   0.9333
III   54.00   81.00   40.00   175.00   0.8750
Tot.  405.00  270.00  200.00   875.00   1.0000

On the interpretation you're proposing, how are you going to
write the next table?  You'll have to put 420.00 at the foot of
the "c" column and 280.00 at the foot of the "v" column as these
"greater quantities" of output are put to use.  If you write 200
for aggregate profit, you've then got an aggregate price of 900,
not equal to total value.

> So far you have not responded to me at all. I do not
> understand the transformation in terms of equilibrium or
> simple reproduction or as an iterative or recursive exercise
> or in terms of linear homogeneous equations or matrix
> algebra but, following Carchedi, as one period in a sequence
> in which labor productivity, unit prices and even r are
> changing.

Rakesh, I thought we'd agreed that the transformation as such,
in Marx, is an atemporal comparison of hypothetical states:
here, with prices equal to values; there, with prices such as to
yield a common rate of profit.  The "same economy" with
different sets of prices.  So why are you talking about changes
in labour productivity?

Allin.
```

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