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

From: Ian Wright (wrighti@ACM.ORG)
Date: Mon Jun 12 2006 - 13:51:31 EDT

```Hi Paul

> Ian why do you think that capitalist consumption is productive
> whereas that of workers is not?

Could you define "productive"? Then I will try to answer your question
as best I can.

> Why not include workers consumption as well in your equation so
> to get
> 2 tons raw material  + 4000 hrs of labor +4 tons workers consumption + 4
> tons capitalist consumption  --> 10 t. of corn

Because we are calculating real-costs in terms of labour-time. The
labour-value of direct labour does not need to be reduced to the
labour-value of its input goods, otherwise the process of vertical
integration enters an infinite loop. This is a property shared by all
formulae for calculating labour values, both the real-cost version and
Sraffa's. But there's no reason to conclude in either case that
workers consumption is not being treated as "productive".

In real-cost accounting the equation for labour value is:
2v + 4v + 4000 = 10v
to give v = 1000 hours (where v is labour-value of corn).

In Sraffian accounting the equation for labour value is:
2v + 4000 = 10v
to give v = 500 hours.

In both cases we don't replace the 4000 hours with workers
consumption. If we did then in the first case we get:
2v + 4v + 4v = 10v
which balances, but is an empty tautology.

And if we replace the 4000 hours in the Sraffian equation we get
2v + 4v = 10v
which is a contradiction, a little sign of the labour-cost accounting error.

However, as the corn-economy is so low-dimensional, and a well-known
special case in which the transformation problem does not arise, then
these examples can appear trivial and a "storm in a teacup" unless we
have the n-commodity context of the accounting problem in mind.

Best wishes,
-Ian.
```

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