[OPE-L:1737] Re: Temporality and Simultaneity

Massimo De Angelis (M.DeAngelis@uel.ac.uk)
Thu, 11 Apr 1996 07:23:02 -0700

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Dear Chai-on,

sorry for the late reply. the way I read your example below is this:
whatever is the forecast for next period, capitalist B has paid 100
for c, so at total market value = 260 the total prate for B is
80/100 (lower than prate for A) . NEXT period prate will be equal if
B buys at 80. To me, BOTH are real profit rate. Can you tell me why
you don't think this is the case??


> Dear Massimo,
> In the example of the two producers, I assumed the value of input materials
> to be changing. If the production conditions (the machinarys, etc.) are
> changing in their values, the less competitive producer should be weeded out.
> Because the input materials are assumed to change in their values, he was
> less competitive temporarily. let us discuss this case only in the first instance.
> let assume the producer A purchased the input materials at 100 while his
> competitor did them of the same amount at 80 at a later point of time for
> the reason that the input materials were devalued (the two values, 100 and
> 80, were assumed to have been prevalent market values). The second producer
> has not yet come out to the market when the first man put his products on
> the market. But, when his products are on the market, the input materials
> are already known to have been devalued. Nevertheless, because the second
> man has not produced the same product with less expensive input materials,
> the market value of the products are not yet depreciated in proportion to
> the value of the input materials. Then, how would he compute his profit rate?
> 100(c)+80(v)+80(s)=260 is its current market value. But since 100(c) is
> already depreciated, 80(c)+80(v)+100(s)=260 will be seen as the prevailing
> market condition. In the first case, the profit rate would be 80/180. But
> in the second case, it would be 100/160. None of the two can be a proper
> profit rate in projecting the next production. 80(c)+80(v)+80(s)=240 will
> rather be a proper reference for it. Yet it is not a real profit rate,
> is it?
> I look forward your reply.
> With regards
> Chai-on Lee