[OPE-L:1749] temporality and simultaneity

chaion lee (conlee@chonnam.chonnam.ac.kr)
Fri, 12 Apr 1996 08:29:44 -0700

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

In [OPE-L:1737], Massimo wrote,

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??

as regard to my example,

> 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 for A. 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
since 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.

Chai-on Lee replies:
In my example, capitalist B has paid 80 (not 100) for c, so at total
market value = 240 (not 260, for the market value is already depreciated
when the second producer puts his products on the market in asmuch as the
prevailing market value of c is 80 then) the total profit rate for B is
80/160 (not 80/100) (higher than the profit rate of A notlower than prate
for A since for A, the prate is 80/180) . NEXT period prate will of course
be equalised since B and A both would buy the c at 80. To me, therefore,
80/160 is the **only** economically relevant profit rate. Can you tell me
why you don't think this is the case??

I look forward your wise reply.