# Re: [OPE-L] workers' consumption and capitalists' consumption

From: Allin Cottrell (cottrell@WFU.EDU)
Date: Mon Jun 05 2006 - 17:58:15 EDT

```On Mon, 5 Jun 2006, Ian Wright wrote:

> Let's consider the Sraffian definition of labour value, v=l(I-A)^{-1},
> and interpret its series expansion as representing previous "rounds"
> of production back in time. As everyone knows, this intepretation
> isn't strictly accurate but I think it helps us to form a picture in
> order to consider the accounting issues. Expanding,
> v = l(I + A + A^{2} + ... )
> The first term, as you know, represents the direct labour expended on
> inputs to produce unit  outputs, the second term represents the
> penultimate indirect labour required to produce the inputs for the
> last round, and so on, ad infinitum. The claim is that we are counting
> *all* the direct and indirect labour expended to produce unit
> commodity outputs, and this summing up measures the labour-value of
> commodities.

OK.

> Now consider the Sraffian reduction to dated labour representation.
> Expanding,
> p = l(I + A(1+r) +A^{2}(1+r)^{2} + ...)
> Here, in contrast to the Sraffian formula for labour values, we have
> at extra (1+r) term. It's there because in order to properly formulate
> competitive price accounting we must include the profit that
>
> However, in simple reproduction, that profit income is spent on
> capitalist consumption goods. Hence, in the previous "rounds" of
> production, capitalists spend their profit income on commodities,
> which they consume. Someone has to make those commodities.
>
> There are two key questions now:
> (i) Where is the labour-time that was expended in previous rounds on
> the production of capitalist consumption goods in Sraffian
> labour-value accounting? Is this labour being counted or not?
> (ii) Should it be counted?
>
> I want to concentrate on (i) in this message, because it is a matter
> of fact that should be easy to get agreement on.
>
> My answer to (i) is that the the labour-time expended in previous
> rounds of production to make capitalist consumption goods -- is
> missing. Sraffian labour-cost accounting does not count *all* the
> direct and indirect labour that was expended to produce the ultimate
> outputs.

My inclination is to answer thus:

"Where is the labour-time that was expended in previous rounds
on the production of capitalist consumption goods in Sraffian
labour-value accounting?"

It's in the labour-value of those consumption goods.

"Is this labour being counted or not?"

It's being counted in the value of the capitalist consumption
goods themselves.  It's not being counted in the value of the
commodities produced "by means of" those consumption goods,
because there are no such commodities.

I will, however, try to find time to read your fuller exposition
on this.

Allin Cottrell.
```

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