# [OPE-L:5045] RE: numerical example!!!

From: Drewk (Andrew_Kliman@msn.com)
Date: Fri Feb 23 2001 - 02:22:44 EST

```In reply to OPE-L 5041.

Fred, I agree that we are making some progress.  You write:

"I stand corrected about the real wage.  I can see now that
a given real wage, along with the given technical conditions,
uniquely determine the rate of profit."

Good statement!

What the second sentence means is that -- once input and output
prices are constrained to be equal -- there exists one and only
one uniform profit rate that corresponds to a particular ("given")
set of real wage and technical coefficients.  Since you, like the
Sraffians and other physicalists, constrain input and output
prices to be equal, you have the same uniform profit rate when you
have the same set of real wage and technical coefficients.  This

But then your post slips into error, because it confuses and
conflates two meanings of the word "given."  In the above passage,
"given" means "particular."  But you then employ it to mean
something quite different -- "taken as an initial datum."   For
instance:

"So whether or not technical conditions uniquely determine
the rate of profit depends on whether the real wage or the
money wage is taken as given along with the technical
conditions."

You cannot validly move from the first passage to the second,
precisely because the meaning of "given" has changed.

Moreover, this second statement is NOT correct.  As I pointed out,
what is "given" (an initial datum) is not relevant.  You could
have assumed, as an *initial datum*, the same money wage rate that
Steedman obtains as a *result* when he takes the real wage rate as
his initial datum.  You would then have gotten the same relative
prices and profit rate as he did.

Check it out.  You'll see that this is the case.

So you can go from the money wage and get the real wage, or
vice-versa.  Whichever you do, if your real wage (either specified
as an initial datum or derived as a result) is the same as
Steedman's, and if all your other physical quantities are the same
as Steedman's, then your profit rate and relative prices will be
the same as Steedman's.

It is thus not true that technical change in luxury industries
will alter your general profit rate.  As long as you are dealing
with the SAME ECONOMY in physical terms -- same real wage (either
taken as initial datum or derived) and same technical
coefficients -- as he is, your profit rate will be the same as his
is.  His profit rate can't change in response to changes in
productivity in luxury industries, so neither can yours.

The following is possible.  You and Steedman begin from the same
economy.  You have the same profit rate.  Then you introduce the
same change in luxury goods' technical coefficients into your
economy and his, but you allow the real wage rate to vary in your
economy but not his.  Then you'll get a different profit rate from
his.  But the reason will NOT be that luxury productivity affects
your economy.  The reason will be that your real wage rate has
changed.  The comparison of your profit rate with Steedman's won't
be valid, because you'll be comparing profit rates in two
different economies.  It is obvious, but meaningless, that two
economies can have different profit rates.

You need to get different profit rates for the SAME economy as
Steedman's.  And that means that all of your technical and real
wage coefficients must be the same.  And since, as we know, if
they are all the same, then your profit rates must be the same,
you will not be able to get what you need to get.  Your

See you soon.

Ciao,

Andrew ("Drewk") Kliman
Dept. of Social Sciences
Pace University
Pleasantville, NY 10570 USA
phone:  (914) 773-3968
fax:  (914) 773-3951

Home:  60 W. 76th St. #4E
New York, NY 10023 USA

"The practice of philosophy is itself theoretical.  It is the
critique that measures the individual existence by the essence,
the particular reality by the Idea."
```

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