[OPE-L:5373] Re:Luxuries in the New Solution

Ajit Sinha (ecas@cc.newcastle.edu.au)
Sun, 17 Aug 1997 23:22:18 -0700 (PDT)

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At 00:57 17/08/97 -0700, Rieu wrote:
>Yes, I totally agree to this point. But, some points must be noted.
>1) My argument was not equalization itself, but tendency of equalization,
> in the sense that every capital pursue higher rate of profit.
>2) In the 'sraffian simultaneist' framework, although the fact that the
> general rate of profit is the weighted average of all industries is
> a change in luxury sector cannot affect the general rate of profit.
> Okishio already proved this point. cf. Okishio(1974), "Value & Production
> Price" in M.Krueger & P.Flaschel eds., <Nobuo Okishio-Essays in Political
>Economy>, Verlag Peterlang.

I don't understand what you are agreeing with here, but your general
understanding of the Sraffian position seem to be quite wrong. Sraffian as
well as Marxian general rate of profit is not an empirical waighted average
of various rates of profits prevailing in different industries and firms.
If that was the case, then, of course, prices will have to be known before
the 'general rate of profit' could be calculated. In the Sraffian case, the
the long term prices are an outcome to the solution of the general rate of
profit. As far as the proof of why luxury good sector will have no impact
on the general rate of profit, why give credit to Okishio (1974) when it is
already there in Sraffa (1960)? Cheers, ajit sinha