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

From: Ian Hunt (ian.hunt@FLINDERS.EDU.AU)
Date: Tue Sep 18 2007 - 01:17:28 EDT

Dear Fred,
It is what Medio does. Brody shows that inputs can be measured in the
quantities of any basic good and doesn't think there is any decisive
reason for favouring value as the units. My view is that value is
favoured because control and discipline of social labour is in all
industries a crucial component of social relations of production.

In the simple case, assuming one technique of production of
production and no fixed capital or joint products you can get the
value units from the equation l = A l + L. You can get the value
units in more complicated cases, but they will depend on expectations
of profitable lifetimes of machines (to get the flow of value from
fixed capital) and prices of products for dividing the value of
output between joint products. In my view, price and value are
mutually dependent and I do not try to show that there is a one way
dependency with prices depending on values.  The only sense in which
value is fundamental in my view is that discipline of labour is
fundamental to social relations of production.

Sraffa was engaged in a different exercise from regarding the
division of social labour as the the basis of laws of development of
commodity production (He was interested in the inverse dependence of
the rate of profit on wages rather than laws of development)

>Quoting Ian Hunt <ian.hunt@FLINDERS.EDU.AU>:
>>Dear Fred,
>>In the model, the fixed capital flow input is a quantity of value per
>>year, with a price per unit of value for the machine. In money
>>accounting terms, it is the depreciation of the item of fixed capital
>>per year. Empirically, the turnover period is determined by
>>accounting convention, together with expectations of profitable
>>working the lifetime of the machine.
>>Once the turnover period is found you can determine capital flows by
>>dividing the capital stock by the turnover period. The dimension of
>>capital stocks is money. So you divide the capital fund required for
>>the machine, ie its capital cost in money terms, by the turnover
>>period (whose dimension is time) to get the fixed capital flow (whose
>>dimension is money/time).
>>In my model, the capital is measured in value units and prices as
>>prices per unit of value. You could also measure the capital in other
>>units, and take prices per those units. Measurement in value units
>>reveals the division of socially necessary labour time involved in
>>the productive consumption of inputs. If you think the reciprocal
>>interaction between money price and labour productivity (defined as
>>the inverse of 'value') is important theoretically, then your theory
>>will take value units as significant. if you have other theoretical
>>interests, you will not doubt take other measures as the basis of
>>your model,
>Hi again,
>Thanks for this response as well.
>I thought that the given inputs in linear production theory were
>PHYSICAL quantities of inputs and outputs, not the VALUES of these
>physical quantities.  How are these values determined?  This is very
>different from Sraffa.
>Is this what Brody does?
>This message was sent using IMP, the Internet Messaging Program.

Associate Professor Ian Hunt,
Dept  of Philosophy, School of Humanities,
Director, Centre for Applied Philosophy,
Flinders University of SA,
Humanities Building,
Bedford Park, SA, 5042,
Ph: (08) 8201 2054 Fax: (08) 8201 2784

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