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

From: ajit sinha (sinha_a99@YAHOO.COM)
Date: Mon Jun 12 2006 - 15:36:08 EDT

--- Ian Wright <wrighti@ACM.ORG> wrote:

> Hi Ajit
> > Ian, I don't think it was a silly point. I also
> don't
> > think your last message allays my fears. I would
> > rather stick to clarifying this point first,
> because
> > this might bring the basic problem, which I think
> is a
> > logical problem, with your approach to light. My
> point
> > is that output cannot become its own input. The
> two
> > tons of corn as input was not used out of the ten
> tons
> > of corn, it existed before the ten tons of corn
> was
> > produced.
> Indeed. That is why I thought your "speed of light"
> complaint didn't
> make sense. 4 tons of the output on the RHS is not
> identically the 4
> tons of capitalist consumption on the LHS. Just as
> 2 tons of the
> output on the RHS is not identically the 2 tons of
> raw materials on
> the LHS.
> > Are you now saying that you knew that
> > capitalists consumed 4 tons of corn out of the
> output
> > of (t-1) period of production, and this is what
> you
> > are replacing from the current ten tons of corn
> > output? If this is your position, then please
> confirm.
> Yes, but I am not "now saying" it. I have always
> said it. Both
> capitalist consumption and worker consumption is
> specified, i.e. the
> surplus is fully distributed both in nominal and
> physical terms. This
> is a state of self-replacing equilibrium, not a
> non-equilibrium state.
> Best wishes,
> -Ian.
Now we are getting somewhere. I'll try to show the
problems with your formulations below:

(1) Let's suppose that workers wages in period t is
not 0.001 tons per hours of labor but rather 0.0005
tons of corn per hrs. of labor. This will give you a
surplus of 6 tons of corn. However, your capitalist
consumption is a given datum from the past, which is 4
tons of corn. Now, all of a sudden you have 2 tons of
corn that your accounting principle is unable to deal
with. In other words, your accounting principle
becomes self-contradictory.

(2) How can you deal with this? You may try to put a
condition on your system that does not allow such
possibility. You may say that my example violates your
assumption of simple reproduction schema. Before we
get to what this assumption implies, note one
immediate conclusion: This situation must arise in all
expanded reproduction schemas--where your accounting
principle logically breaks down.

(3) Given your position that capitalists' necessary
consumption is out of last round of production, your
assumption of simple reproduction schema implies that
the given system with its given wages and profits must
not only remain frozen for all conceivable future but
also it must have been frozen for all conceivable
past. In other words, the corn equation with its wages
at 0.001 tons of corn per hr. of labor must exist from
the big bang to eternity! Because, anywhere in the
past or the future if the system diverged from this
frozen state, it can do only by breaking your
accounting principle.

(4) Up till now I have not mentioned Marx in this
context, simply to keep the focus on the logic of the
issue rather than create emotional outbursts and
quotation mongering. But it is true that Marx derives
his labor-values exactly the way I have been doing it
for the so-called Sraffian labor-values. Marx's
labor-values are derived directly from the technique
in use and it has nothing to do with wages or profits.
It is true that in some quarters (including Joan
Robinson) people think that labor-values also depend
on demand as it also represents the distribution of
total social labor into various sectors. But I have
shown in my paper, 'Some critical reflections on
Marx's theory of value' in the Westra and Zuge edited
book by Palgrave, which I think you have seen, that
this interpretation hits the dead end pretty quickly.
So, fact of the matter is that whatever you are doing
with your real cost accounting, it is not what Marx
was doing. Cheers, ajit sinha

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