Re: [OPE-L] Truncating Marx

From: Ian Wright (wrighti@ACM.ORG)
Date: Mon Sep 10 2007 - 12:06:33 EDT

> The fundamental problem with
> measuring capital by labor-values is that it does not
> take into account the fact that capital accrues on
> compound rate and not simple rate. Unless you argue
> that capital must accrue on simple rate and not
> compound rate, you simply cannot make a case for Marx.

In static, or stationary, linear production models the simple vs.
compound rate mismatch arises due to a labour-cost accounting error:
prices of production count the price of money-capital as a component
of the price of commodities but standard labour-values do not count
the corresponding labour-value of money-capital as a component of the
real cost of commodities. I agree Ajit that this does appear to cause
a contradiction for Marx's LTV. And it also is the root cause of
Ricardo's problem of an invariable measure of value. But fix the
accounting error and the classical paradoxes melt away.

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