Re: [OPE-L] models with unequal turnover periods

From: Fred Moseley (fmoseley@MTHOLYOKE.EDU)
Date: Sat Sep 08 2007 - 10:01:29 EDT

Quoting Ian Hunt <ian.hunt@FLINDERS.EDU.AU>:

> Dear Fred,
> The paper is titled 'An Obituary or a New Life for the Tendency of
> the Rate of Profit to Fall' and can be found in  Review of Radical
> Political Economics, 15:1, 1983, pp. 131-148. It has got a few typos
> in it (URPE did not in those days always return the text to authors
> for checking) but these are relatively easy to sort out - if you have
> any trouble let me know and I will tell you what they are supposed to
> be. I am trying to produce a decent scanned copy: if I do, then I
> will send that electronically, with typos fixed.
> By turnover period, I mean the sum of the turnover period of fixed
> capital plus the turnover period of constant capital plus the
> turnover period of variable capital, which can of course all differ
> and contain different variants. These differences are explicitly
> taken into account in the paper.

Hi Ian,

The differences in turnover periods between fixed (constant) and
circulating (constant and variable) capital are not what I am talking
about.  Rather, I am talking about the differences in turnover periods
of circulating capitals in DIFFERENT INDUSTRIES.  These differences are
not taken into account in your paper.  Your paper is based on Medio’s
model which explicitly assumes an equal turnover period in all
industries.  Medio wrote (p. 332):  “Consider an economy of n
industries, each of them producing a given amount of a single commodity
in a GIVEN INTERVAL OF TIME, let us say a YEAR.” (emphasis added)  This
is the assumption I am talking about.

And my point is that this is a necessary assumption in Sraffian theory
because, if there were unequal turnover periods, then the rate of
profit determined by the simultaneous equations would be equalized
across different turnover periods, which in turn would imply unequal
annual rates of profit, contrary to the prevailing tendency.  Plus,
simultaneous determination requires that all commodities are exchanged
at the same time, which in turn requires that they all must have the
same turnover period.


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