[OPE-L:6281] El Chunche (was "Historical, real and current costs")

andrew kliman (Andrew_Kliman@CLASSIC.MSN.COM)
Sun, 15 Mar 98 19:13:34 UT

A reply to the PIAF:

From: owner-ope-l@galaxy.csuchico.edu on behalf of aramos@aramos.bo
Sent: Sunday, March 15, 1998 11:10 AM
To: ope-l@galaxy.csuchico.edu
Cc: Multiple recipients of list
Subject: [OPE-L] Historical, real and current costs

Ale: "In Costarican Spanish we have an equivalent for "widget" --"chunche"--
which sounds very funny for
other Spanish speaking people."

My dictionary spells it "chuncho," and says this definition of chuncho is

"Sorry, but I think you couldn''t translate your known best-seller "Das Korn"
as "The Widget"."

How about _El Chunche_?

""Widget" designates something that is everything and, at the same time,
nothing, i.e. it abounds in methaphysical subtleties and theological niceties.
Really materialists --as I think you are-- deal with real things, as corn.
What do you think?"

Who gives a damn about thought? It is nothing but a superstructural reflex
produced by the material base.

Labor--Wages, Land--Rent, El Chunche--Widget: they do their ghostwalking as
social characters, and simultaneously as REAL THINGS.

Of course, the sole REAL THING is Coca-Cola ("It's the real thing").

I had written:

> Since the example concerns the total social capital, what is
> happening is simply that the general price level falls, for
> whatever reason (e.g., due to a drop in investment following a
> fall in the profit rate). Before 9 p.m., the total social
> product would have sold for $100; after 9.m., it actually sells
> for $98.

Ale replies:

"Is the fall in the general price level a "nominal fall"?"

Actually, I didn't give you (a temporalist) enough information to determine
this. But I didn't pose the question to temporalists (this was not another
"quiz.") I posed the question to Duncan and other proponents of the
simultaneist MELT, for whom, I believe, history doesn't matter here. I
believe they have all the information they require.

But I have no objection to your assuming that the *temporalist* MELT at 5 p.m.
is 1. For instance, you may assume that techniques of production have never
changed; it has always taken 1 hour to produce 1 chunche. Because there are
no other commodities, value is not redistributed across sectors, and thus the
money commanded by 1 chunche ($1 at 5 p.m.) also represents 1 labor-hour.
Hence, at 5 p.m., the *temporalist* MELT is $1/labor-hr.

Then, I think *we'd* agree that the fall in the general price level is a
nominal fall. That is, it is not because less labor is needed to produce it
that the price of a chunche falls. However, *we* are not proponents of the
simultaneist MELT.

Ale: "I would say that you have 2 MELTs, one before 9 p.m. ($1/hour), and
other between 9 p.m. and midnight ($0.98/hour)."

Yes, of course. So would I. But our paradigm is temporalist. I don't think
this possibility is permissible within the simultaneist paradigm.

Ale: "If, between 9 p.m. and midnight, we measure value by means of its
*internal* measure (labor-time) the
widget is still worth 1 hour, but the external measure of value records

Right. I think proponents of both MELTs (temporalist and simultaneist) agree
about this. The problem is to RELATE the $98 = 100 labor-hours of sales
revenue to the $99 = ? labor-hours worth of costs. *We'd* say $99 = 99
labor-hours worth of costs, so the workers performed 1 hour of surplus-labor,
and so REAL profit is positive ($1 at the old MELT, $0.98 at the new MELT.)
But what will the *simultaneists* say?

According to my understanding of the simultaneist MELT, they'd say that profit
(no distinction between real and nominal being made) is -$1, that the $99 =
$99/($0.98/hr.) = 101.02 labor-hours, and therefore the workers exploit the
capitalists. The workers only worked for 100 hours, but received the
equivalent of 101.02 hours as wages. So surplus-labor is -1.02 hours.

If I understand Duncan correctly, however, this is not the conclusion he wants
to draw. So I've asked if he could provide us with his calculations. In his
post of Sunday, February 22, 1998 9:58 PM, he did provide calculations for a
similar example, but they were based on one of two assumptions that violated
the conditions of the example: either the price of the commodity remains
constant, or the real wages change with the change in the price level. The
reason the second isn't permissible is that the workers have ALREADY spent
their wages and already consumed the widgets when the price level drops. They
can't retroactively acquire more widgets simply because the $99 would NOW buy
more widgets, because they don't own the money anymore.

The reason the first assumption isn't permissible, as I tried to clarify
yesterday, is that I'm simply stating facts (not constructing a "period
model"). And the fact is that the price changes between the time that wages
are received and used to buy consumption goods and the time when the product
is finished and sold.

Ale: "In your example, the possibility that the price prevailing before 9
p.m. had been "inflated" seems to be discarded, so we are not seeing an
alligment of money figures to labor-time figures. I say this because your
suggested cause of the falling price --"falling profit rate"-- could imply
such an alligment."

Right. If the original MELT is $1/labor-hr., then we are seeing a
"dis-alignment," i.e., divergence; i.e., change in the MELT. But, again, that
may only be what *we* temporalists see.

Andrew Kliman