[OPE-L:7545] Re: Re: RE: Fred's remarks on Marx, Sraffa & Rents

From: Paul Cockshot (paul@cockshott.com)
Date: Mon Aug 26 2002 - 10:10:47 EDT

On Sunday 25 August 2002 18:22, Fred B. Moseley wrote:
> This is a response to Gary's (7534) and (7535).  Gary, I would like to
> refocus the discussion back to the original question of the method of
> determination of the rate of profit (which I think you were trying to do
> too).  I would like to return later to the very important empirical
> question of the relative explanatory power of Marx's theory and Sraffa's
> theory, which has come up in recent posts.
> 1.  The question is:  is the rate of profit uniquely determined by the
> technical conditions of production and the wage rate (and a numeraire)?
> Gary and Gil have argued that the answer to this question is yes.  The
> technical conditions and the wage rate determine a system of n equations
> (one for each of the n industries) in (n+1) unknowns - n absolute prices
> and the rate of profit.  If, in addition, the price of one commodity (the
> numeraire) is set =1, then the rate of profit is uniquely determined,
> along with (n-1) relative prices.
> It follows from this argument that Marx's logical method - of first
> determining the rate of profit independently prices of production, and
> then assuming this predetermined rate of profit in the determination of
> prices of production - is wrong.  The rate of profit cannot be anything
> other than the rate of profit uniquely determined in Sraffian theory by
> the technical conditions and the wage rate.
> 2.  I argue that the crucial flaw in Gary and Gil's argument is that it
> assumes that the exchange-value of the numeraire, or the money commodity
> (e.g. gold), is determined in the same way as the prices of all other
> commodities, i.e. that the gold industry participates in the equalization
> of profit rates like all other industries.  This means that there is an
> equation for the gold industry that is essentially the same as all the
> other equations, i.e. that the price of gold is equal to production costs
> plus the average profit.

The gold industry can not be the key issue here. Assume state fiat
money instead if that is a problem.

This archive was generated by hypermail 2.1.5 : Fri Sep 06 2002 - 17:17:38 EDT