Re: [OPE-L] Ajit's Paper on Sraffa and Late Wittgenstein

From: Paul Cockshott (wpc@DCS.GLA.AC.UK)
Date: Tue Jun 06 2006 - 18:08:03 EDT

> Commodity capital is not in the form of money but in
> the form of commodities only. During the period of
> production all your inputs including commodity wages
> are commodity capital in the hands of the firms. After
> the production period the gross outputs are the
> commodity capital in the hands of the firms, some of
> this capital could be converted into revenue.

OK, I assumed you meant working capital, rather than commodity
capital, because you raised the issue of double counting. I assumed
you were talking about double counting of money amounts. But now I
think you might be projecting a money-commodity interpretation onto
the circular flow, which is not quite right, as I'll try to explain.

I'm a little hesitant to interpret simultaneous equations in terms of
the "beginning" of the period and the "end" of the period, but

The working capital (which is money) in firm accounts, received from
capitalist households, is spent on commodity inputs at the beginning
of the period. At the end of the production period there is zero
working capital and some commodity capital, about to converted into
revenue. The math does not imply that there is both working capital
and commodity capital in the hands of the firm at the same time, just
as the price and quantity equations do not imply that there is both
means of exchange and the bought item in the hands of the purchaser at
the same time.
Paul Cockshott
This is wrong, at the end of the production period the firms have
just as much working capital as they started out with. You say that
"working capital is spent on commodity inputs at the beginning
of the period", well if it is spent on commodity inputs, then
who did the firms purchase it from?

They purchased it from other firms, so they collectively do
not change their holdings of working money capital. The only
possible change occurs as a weekly fluctuation of the relative
cash balances of the working and capitalist class as a result
of the weekly payment of wages, and its reflux during the week
as workers buy consumer goods.

Moreover, the amount of money working capital is undetermined
by the equations, it depends on the velocity of circulation of

It seems to me that your attribution of a price to money capital
and setting this price to be r is a dimensional error, and 
a conceptual slide analogous to that made by bourgeois economics
when it terms interest the price of money.  r in the transformation
equations has the dimension 1/time price has the dimension
units of gold/ units of iron ( substitute other commodities in for iron).

This dimensional difference indicates that the r can not be a price.


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