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

From: Paul Cockshott (wpc@DCS.GLA.AC.UK)
Date: Wed Jun 07 2006 - 18:40:37 EDT

> --------------
> That goes very much against what actually happens in capitalist
> accounting practice. The gross revenue actually stays in the firms accounts
> and portion of it then goes to the rentiers as dividends or interest.
Think of the mathematics in flow terms. Then the only flow of money
from firm accounts to capitalist accounts is the net profit income.
The gross revenue minus the profit income, that is the working
capital, then remains in firm accounts.

Also, consider how it would be possible, in a linear production model
of simple reproduction, for capitalists to reallocate their
money-capital to different sectors of production, if revenue cannot be
withdrawn from sectors and transferred to capitalist accounts.
Well this can not be done in your case of circular flow anyway
since the material form of the product is already determined.
This is where the analogy with socialist planning comes in.
The rate of surplus production in the USSR was determined by
the physical form of the output enshrined in the plan.

> I would disagree, both coexist. There is a stock of commodity
> capital and a simultaneous stock of money used to facilitate
> the exchange of the commodity capital. If you introduce the
> notion of money capital you have to account for it separately
> as a distinct stock.

In the circular flow model there is both working-capital and
commodity-capital. However, there is not an identifiable "point in
time" when a firm both owns the working-capital and the
commodity-capital that was bought with it. That would not make any
It makes sense because of the stochastic nature of transactions
which requires cash balances to ensure reproduction ( see my draft
on money which you have ).


In reality production is of course not smooth. Hence, within a
production period, a firm will have a partial stock of working-capital
and a partial stock of commodity-capital and unfinished goods etc.
This level of detail is abstracted from in linear production theory.
It is in Sraffa, I agree, but by introducing money capital
as a category which is not there in Sraffa you have to deal
with it. As I said in private email earlier that throws
you into the deep end of joint production, since each 
production process has as output a commodity, and a stock
of cash.


All Sraffa's variables could be qualified wrt time, but it is a
redundant procedure. For instance, the net product also has dimensions
of quantities of commodity types per "year". The per "year" is

All production flows could be so qualified, but not his prices
whose dimension will remain units of numeraire per unit of x.
Your treatment of r as a price is still inconsistent since
it is of dimension $t^{-1}$
Although the austere concept of money-capital employed in the circular
flow does not perfectly match Marx's natural language discussions of
it, nonetheless this quote may help:

"It is not until capital is money-capital that it becomes a commodity,
whose capacity for self-expansion has a definite price quoted every
time in every prevailing rate of interest."
Marx, Capital Vol. 3.

Marx is being vulgar here.

This archive was generated by hypermail 2.1.5 : Fri Jun 30 2006 - 00:00:03 EDT