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

From: Allin Cottrell (cottrell@WFU.EDU)
Date: Tue Jun 06 2006 - 20:44:40 EDT

On Tue, 6 Jun 2006, Ian Wright quoted Paul C:

>> 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).

and replied:

> In a system without a money-commodity then "r" has dimensions $/$,
> i.e. it is the price of money-capital per unit of money-capital
> supplied. For example, if a capitalist receives a return of 0.5$ per
> 1$ supplied then r=0.5 $/$. In other words 1 unit of money-capital
> costs r$.
> In contrast, your suggestion that the dimension of the profit rate is
> "1/time" is perhaps closer to the Austrian view.

Ian, you are definitely off the rails here.  Any magnitude with
dimension $/$ has to have a value of 1.0 in any sane system.

The interest rate (or rate of profit) necessarily has a time
dimension, although "per annum" is generally implicit (and
also generally legally enforceable).

I offer you 50% on your money.  You snap up the offer, but are
disappointed by the interest checks you receive.  I reply, "Aha, I
meant 50% per century!"  You can then sue me, with a reasonable
probability of success.  The Austrians may make a fetish of time,
but it's not their property.

Allin Cottrell

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