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

From: Allin Cottrell (cottrell@WFU.EDU)
Date: Thu Jun 08 2006 - 20:54:53 EDT

On Thu, 8 Jun 2006, Ian Wright wrote:

> You think there is a dimensional problem because you conflate the
> price of money-capital with profit income.
> The price of money-capital, like the price of any commodity, is an
> exchange ratio against money. It has got nothing to do with time.

Ian, what do you think rides on this point?  I still can't make
any sense of your claim.  Let r = 0.1.  The borrower parts with
$10 and receives $100.  (Well, interest is not generally paid up
front, but never mind that.)  But the idea that $10 is the price
of $100, simpliciter, is just economic nonsense.  A loan has to be
repaid.  When?  There's the time dimension.

I pay $10 for the privilege of getting the use of $100 now (at
t = t0), to be repaid at t = t1.  The rate of interest I'm paying
depends on the magnitude t1 - t0.

To put it differently, r = 0.1 is just a wildcard, undefined,
unless I know the period to which this interest rate applies.

Allin Cottrell

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