[OPE-L:6371] RE: Re: Historical, real and current costs

C. J. Arthur (cjarthur@pavilion.co.uk)
Sat, 28 Mar 1998 21:37:40 +0000

Andrew relied to me

I also think it is invalid to derive conclusions from
>the premise of a one-good world and then argue that they apply to a multi-good
>world. I think it is valid, however, to argue that the conclusions apply to a
>multi-good world, when they have been derived from an example that postulates
>a one-good world, if the conclusions do not depend on that premise.
>I think my widget/chunche example is of this latter type. It concerns the
>implications, for Marx's theory of profit, of different conceptions of the
>money/labor-time relation (the monetary expression of labor-time, or MELT). I
>think that, if one holds that the magnitude of the MELT that pertains to
>constant and variable capital must be the same as the magnitude of the MELT
>that pertains to the product, one implies that workers can exploit the
>capitalists simply because the price level drops.
>Thus, the purpose of the widget/chunche example is to provide material for
>calculation of the MELT under conditions in which the price level drops
>between the time that workers receive and spend their wages, and the time that
>the product is completed and sold. It was to "motivate" the possible gap in
>time between these events, which alone allows for a drop in the price level
>between them, that I specified the gap in time between the end of working time
>and the end of production time.
>Now, as Alejandro Ramos has noted, we could doll-up the example with "n"
>sectors, a money commodity (or paper money), constant capital, etc. It would
>still be possible for the example to exemplify what the present example
>exemplifies, namely, differences between the timing of wage payments and
>workers consumption, on the one hand, and the timing of the completion and
>sale of the products on the other.
>For instance, it is self-evident that, in all "n" sectors, working time could
>end at 5 pm and the production time end only at 9 pm. We'd just have the same
>issue in a more cumbersome form. Hence, no conclusions concerning the MELT or
>its relation to Marx's theory of profit depend on the one-sector premise, even
>when the problem is *illustrated* by means of that premise.
>Moreover, what we'd have in an n-sector example is a bunch of "rugs" under
>which the problem at hand could be swept. My example prevents that, by
>removing the rugs. I hoped that the example would thereby bring the problem
>at hand into sharp focus, and show that it does need to be confronted
>directly. I still hope it will, i.e., that proponents of the simultaneist
>MELT, to whom the example was addressed, will reply when they have time.
>So, in order to avoid the cumbersomeness of n-sector examples, and to remove
>the n-1 rugs they provide, what is wrong with considering the timing issue,
>and its implications for the MELT, in the context of a one-good economy?
>Andrew Kliman

Yes... But one has to be very careful - for example in a multi-good economy
in which most products are 'dry' the price level rises between these two
times when equalisation of profit kicks in.

Chris A