Re: [OPE-L] Marx on the 'maximum rate of profit'

From: Ian Wright (wrighti@ACM.ORG)
Date: Sat Oct 14 2006 - 12:35:01 EDT

Hi Ajit

> Ian, I don't want to revive the debate.

OK, I understand, please do not feel obliged to reply. I intervened
because your statement "capital cannot be measured by direct and
indirect labor-time" does revive our debate.

> But my basic
> point is that you have created a system of subsistence
> economy--you are not the first one to confuse simple
> reproduction with the subsistence economy because
> subsistence economy is one example of simple
> reproduction.

Any Sraffian open economy with an undistributed surplus maps to a
family of equivalent closed economies with a distributed surplus.

To compute prices Sraffa must close his surplus equations -- and he
does so by specifying the nominal income distribution. But that is
half a closure. To compute labour-values Sraffa must also specify the
real distribution of income. He doesn't do that. But one can. Adopting
a full closure of the economy does not transform a surplus producing
economy into a subsistence economy. We are simply fully distributing
the surplus.

> Your whole argument about money sector
> etc. is a mathematical smoke and mirrior, which is
> hiding this simple fact from you. The real test of
> your accounting principle would be its application in
> an expanding reproduction scheme. If your accounting
> system breaks down in this case then you will realise
> that my criticism was right all along. And again, if
> your accounting scheme breaks down in the case of
> expanding reproduction then it of course it couln't be
> Marx's accounting procedure as you cannot claim that
> Marx's accounting was designed only for simple
> reproduction of the capitalist system. So apply the
> test and see what happens. If your accounting passes
> this test, then you may have something! Cheers, ajit
> sinha

Yes, let's move on to discuss expanded reproduction. But first let's
get agreement on the simpler case of simple reproduction.

The point is that Sraffa's labour-value accounting system does not
pass the test of simple reproduction. It does not measure replacement
costs. I invite contradiction on this point, particularly as it is a
relatively straightforward matter of logic and simple arithmetic
(e.g., the low-dimensional corn economy in the appendix to my working
paper: ).

Do you appreciate the problem that exists with Sraffian labour-value
accounting in the context of simple reproduction?

Best wishes,

This archive was generated by hypermail 2.1.5 : Tue Oct 31 2006 - 00:00:03 EST