# Re: [OPE-L] workers' consumption and capitalists' consumption

From: Philip Dunn (hyl0morph@YAHOO.CO.UK)
Date: Sat Jun 03 2006 - 15:11:31 EDT

```Hi Hans

It is basic. Neither workers' nor capitalists' consumption transfers to
the commodity sold by the capitalist.

Returning to Ian's formulae:

"According to Sraffa, prices are proportional to labour values only
when r=0. Setting r=0 in Sraffa's dated labour representation gives
the following formula for labour values:

v = l(I-A)^{-1}

where l is the vector of direct labour coefficients, I is the identity
matrix, and A is the technology matrix (apologies if your font is not
so good at distinguishing l and I). This is the standard formula
employed by neo-Ricardian critics of Marx's value theory. For example,
Samuelson uses it in his 1971 Sraffa-inspired critique of Marx's
theory, and Steedman uses it in Marx After Sraffa.

Briefly, this formula only holds in the case of simple commodity
production, that is production absent a capitalist class. In
conditions of capitalist production, the correct formula is:

v'=l(I-A*)^{-1}

where v' is the vector of real-cost labour values, and A* is the
technology matrix augmented by capitalist consumption."

Rewrite them as:

v = l(B-A)^{-1}
v'= l(B-A*)^{-1}

where the output matrix B = I.

Consider:

v'= l(B*-A)^{-1}

where B* = B - (A* - A).

This removes capitalist consumption from gross output for the purpose of
calculating value. Gross output is x = Bx where x is the output vector
but we only consider x* = B*x

Ian says:

"Alternatively, there is another, equivalent representation of v',
which does not require knowledge of capitalist consumption:

v' = (I-A(1+r))^{-1}l(1+r)"

If this is correct it seems to be saying that Sraffian prices are the
same as values when capitalists' consumption is removed from gross
output.

This significance of this is probably zero.

On Sat, 2006-06-03 at 11:52 -0600, Hans G. Ehrbar wrote:
>
> > So the value of workers' consumption does not transfer to
> > the commodity produced by the capitalist?
>
> Of course not.  Marx considers the creation and transfer of
> value to be real processes happening right there in the
> production process, not something which the theoretician
> allocates afterwards to selected activities.  If the worker
> sits down for dinner, this activity clearly does not add
> value to the product which is at this moment far away from
> him or her in the factory.
>
> Jerry has been emphasizing that the consumption of
> labor-power creates new value, and that the worker's
> consumption can be considered productive consumption for the
> capitalist, but these are different issues.  The value of
> the variable capital is not transferred to the end product.
>
> Hans G. Ehrbar

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