Re: [OPE-L] Marx on the 'maximum rate of profit'

From: Ian Wright (wrighti@ACM.ORG)
Date: Mon Nov 06 2006 - 17:45:58 EST

> That was not my point. My point was that the labour of supervision paid
> the capitalists enough for them to reproduce. Thus the consumption out
> of profits is not necessary for their reproduction as you would have it
> in your accounting scheme which makes their consumption socially
> necessary.

It pretty much comes down to this: do you want to (i) calculate actual
labour-values based on the current state of the economy, or (ii)
calculate counterfactual labour-values based on an economy that lacks
capitalist consumption, or in some way changes capitalist consumption
from its current level?

If your goal is (i) then I recommend we use real-costs labour-values.
You won't have a transformation problem.

But if your goal is (ii) then don't expect your labour-value
accounting to match your price accounting (especially if you follow
Sraffa and count profit-income as a nominal cost of production that
gets reflected in unit prices, but do not count the labour-embodied in
capitalist consumption goods as a real cost of production that gets
reflected in unit labour values). You will have a transformation

My point of view is this: capitalist consumption is a real cost,
regardless of whether that consumption is subsistence, luxury or both.
Certainly capitalists don't need big homes, yachts and helicopters to
keep pumping out profit-income. But they do consume such things, and
labour is expended to produce them. So I'd like to know how much
labour-time is required to produce unit commodities from scratch given
the current state of the economy. Therefore I need to also count the
labour-time required to produce capitalist consumption during the
period of replacement. If I don't do this, I'm calculating
labour-values for another, different economy, in which capitalists
abstain from consumption.

> David Z has shown in his recent article in the IDR that the closer
> correlation between prices of production and real prices than between
> labour values and real prices that we observed in the UK is anomalous.
> In most countries the reverse holds.

It's interesting that Sraffian labour-values do well compared to
Sraffian prices of production. I'd like to be able to explain this one
day in terms of a dynamic model. As we both know, the assumption of a
realised uniform rate of profit, so crucial to linear production
theory, is empirically false.

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