From: Ian Wright (iwright@GMAIL.COM)
Date: Wed Sep 28 2005 - 12:15:14 EDT
Hi Jerry At the Maximum rate of profits in the Sraffian system, workers "live on > air". > Yes. Sraffa assumes that all the wage is considered variable and a share of the "surplus". He rejects the option that the part of the real wage necessary for subsistence is already represented in the technical coefficients matrix, and considered means of production. Although that can be done, as Paul has suggested. If we were to translate this into Marxian categories, it would mean that > the Maximum rate of profits > R = S/ C + -0- > in other words, the formula for the rate of profit is reduced for all > practical purposes to > R = S/C > Therefore (if you're actually interested in this stuff) if you are > concerned about the maximum rate of profit in the basic sector vs. > the maximum rate of profit in the non-basic sector then you have to > zero in on (no pun intended) what would happen if in the non-basic > sector the surplus produced varies in a different way than the basic > sector when inputs in the form of means of production, and non- > living labour inputs ,vary. > OK. But the problem of "self-reproducing non-basics" (I wonder if it is time for a better name?) arises at levels below this theoretical limit of the maximum rate of profits. If one is going to refer to *value* and surplus value rather than only > physical magnitudes and the surplus product, then one would > have to throw out the proposition that living labour in the form of > wage-labor produces value (since there is no wage-labour at the > maximum rate of profits). > Perhaps this suggests a direction to examine. Marx, as we know, > held that *wealth* (as distinct from *value*) can be created by > labor and *nature*. Perhaps you can think of a 'non-basic' that > is *not produced* by labor but which nonetheless comes to be sold. > I find it hard to think of an example of a commodity that appears in the market that has not had some labour expended on it. I.e. if we are to examine the surplus product in physical terms then > we have to consider the fact that "nature" to varying degrees > contributes to the production of goods (again, a point that Marx > was well aware of). *Non-produced* goods, objects created by > natural forces without the expenditure of human labor but which > come to be *privately appropriated* by capital and sold on markets, > are a case to consider. A non-produced non-basic then might be > ambergris. The price that ambergris sells for and the revenues received > by the sellers of the ambergris has, unlike basic goods, no necessary > relation to costs. Rather, the price is driven by demand and the extent to > which there is or is not competition among sellers of ambergris. For > instance, one could easily envision a circumstance in which the ambergris > market was controlled by a monopoly or a quasi-monopoly. In > general, we would anticipate that the "rate of profits" for monopolies > would systematically differ from the average rate of profits, including > the rates of profit in the basic sector. > Yes, maybe, but you are being impolite by introducing realism here (I am joking). In the Sraffian scheme it's assumed that a uniform rate of profits prevails in a state of self-replacing equilibrium. (Some interpreters avoid the strong link between Sraffa's scheme and concepts of equilibrium, but I think this is the only way Sraffa's equations can be given economic significance). So all commodities are reproducible indefinitely. No scarcities. The ambergris will have the usual necessary relation to cost on condition that some labour must be expended in its "production" (e.g., fetching). This is an assumption of the Sraffian system (which I am not defending by the way, just examining). Best wishes, -Ian.
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