[OPE-L:1196] Re: determination of constant capital

Allin Cottrell (cottrell@wfu.edu)
Thu, 22 Feb 1996 14:00:27 -0800

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Andrew (nobody really thought I'd manage to stay out of ths altogther did
they?) writes:

> Theorem: changes in labor-time requirements do not lead to changes in
> the rate(s) of profit if values are simultaneously determined.
> Proof: hold constant all outputs and all physical outlays (including
> outlays to hire labor-power). Then the "value" rate of profit for
> any firm, industry, etc. will change if and only if relative values
> change. Let the vector of unit living labor requirements change from
> L to kL, where k is a scalar. The vector of simultaneously determined
> values thus changes from v = L{(I-A)} to kL{(I-A)} = kv (because A is
> constant). Hence, relative values remain unchanged. Hence, all
> "value" rates of profit remain unchanged. Q.E.D.

All labour requirements are up k%, and all physical outputs and outlays
held constant. So the total hours worked are up k%, but the workforce as
a whole is getting the same aggregate real commodity wage. This is the
second case that I mentioned in my posting: the workers have taken a hit
on their real hourly wage. Yes, s/v is unchanged (both have increased k%).
What do you think is wrong with this analysis?