# Re: [OPE-L] questions on the interpretation of labour values

From: ajit sinha (sinha_a99@YAHOO.COM)
Date: Sat Mar 24 2007 - 12:40:22 EDT

```--- Pen-L Fred Moseley <fmoseley@MTHOLYOKE.EDU> wrote:

> Quoting ajit sinha <sinha_a99@YAHOO.COM>:
> > _____________________________
> > Okay, this is the last time I'm going to comment
> on
> > this. Let me follow your reasoning step by step as
> put
> > forward by you:
> > (1)Firms revenue is determined by capital consumed
> > (which is whatever it happens to be) plus the
> average
> > profit on their invested capital.
> > (2)The average profit is determined by the general
> > rate of profit.
> > (3) The general rate of profit is determined by
> the
> > total surplus value in the economy as a whole.
> >
> > Let me assume that there is no problem with your
> > procedure from (1) to (3). Thus according to your
> > reasoning (1) cannot be determined unless (3) is
> > known. Now, when I ask you how do you determine
> (3) or
> > rather the total surplus value in the economy as a
> > whole?, you tell me I take (1) as given and
> subtract
> > the given capital (C+V) from it. And you think you
> do
> > not indulge in circulat reasoning? Do whatever you
> > want, but please don't attribute such reasoning to
> > Marx--poor Marx has already got a pretty bad
> press,
> > with friends like you he stands absolutely no
> chance!
> > Cheers, ajit sinha
>
> A very brief summary:
>
> 1.  S = N  - V
>
>       = mL - mLn      (where Ln = V/m)
>
> 2.  R = S /(C + V)
>
> 3.  PPi = (Ci + Vi)(1 + R)
>
>     PPi might also be called "gross industry
> reveune"
>
> This is sequential determination (from the macro to
> the micro),
> not circular reasoning.  C, V (and Ci and Vi), L and
> m are
> taken as given, and from these N, S, R and PPi are
> derived.
>
> Fred
_____________________________
Okay, this is the last time for sure. Your first
equation:
(1) S = mL - mLn
The traditional "Sraffian" interpretation of surplus
value is
(1') S' = L - Ln. So let me multiply both side of (1')
with m (whatever m happens to be), which gives us:
(1'') mS' = mL - mLn. Clearly your S = mS'. So up till
now all you have done is to multiply "Sraffian"
surplus value equation with a constant on both side of
the equation. Now to  your equation 2:
(2) R = S/(C+V). You say, you take (C+V) as given, say
equal to M. Let us suppose that the "Sraffian" labor
measure of C and V is given by C' and V'. According to
your definition of m:
mC' = C, and mV' = V, in any case, m(C'+V') = (C+V).
Thus the "Sraffian" rate of profit, R' = S'/(C'+V') is
exactly equal to your R = S/(C+V). Now to your
equation 3:
(3) PPi = (Ci + Vi)(1+R). Again the "Sraffian"
counterpart of your eq. (3) is given by:
PPi' = (Ci' + Vi')(1 + R'). Note that R' = R. Now you
claim that (Ci + Vi) is given as Mi; but again, given
your definition of m, PPi = mPPi', Ci = mCi', and Vi =
mVi'. Thus again your equation 3 is nothing but
multiplying the "Sraffian" prices of production
equation by m on both sides of the equation.

Now, you must know that by multiplying any equation
with any constant on both side of the equation leaves
the equation as it is. All you have done up there is
to multiply the well established "Sraffian" equations
with m on both sides. This is why you keep saying it
does not matter what m happens to be. Now I understand
why. If you think you are saying anything different
from the well established "Sraffian" position, you
will have to show that your (Ci+Vi) does not have to
be equal to m(Ci'+Vi').

You also must have noticed that in your latest
"sequencial" determination, you did not start with a
given M. When logical consistency was called for, you
had no option than to fall back on the "Sraffians".
Cheers, ajit sinha

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