Re: zero average profit

From: Paul Cockshott (wpc@DCS.GLA.AC.UK)
Date: Tue Jun 17 2003 - 04:29:45 EDT

Ian Wright wrote:

> Hello Paul,
> >The conclusion I draw from this is that although stochastic
> >and statistical models have to be the way to go, one must
> >be very cautious about imposing conservation principles
> >on them if they are to be:
> >a) internally consistent
> >b) plausible as models
> I am listening, and note your word of caution. I agree that
> institutions do regularly violate the conservation of money.
> But assuming, say, a fixed population size and a fixed amount
> of money, and abstracting from state control of the money
> supply and fractional reserve banking, is another way to slice
> the cake, just like, for example, the Sraffian model abstracts
> from money and assumes a fixed number of commodity
> types, or the classical assumption that prices correspond to
> values, or the "law of one price" and so on. Holding some
> things constant simplifies the analysis, as I'm sure you're well
> aware.

This is a fair enough approach, but we have to be cautious
about how much one can say about capitalist economies
if we assume money to be conserved. As soon as you have
any developed banking system this is no longer the case, and
I dont think there have ever been capitalist economies without
such a banking system.

This may relate to your original question about where does
the extra money in the m-c-m' come from, it may be unsustainable
without some give in the money supply provided by credit

> You mentioned possible links between quantum mechanics
> and models that do not assume conservation of money.
> That was a good thought because the following paper
> embodies that idea:
> It may interest you because it explicitly considers double-entry
> bookkeeping, and allows monetary transfers to lead to
> "particle creation or annihilation" via an analogy the author
> calls "bookkeeping mechanics".

I will check it out.

> -Ian.
> _________________________________________________________________
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Paul Cockshott
Dept Computing Science
University of Glasgow

0141 330 3125

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