# Re: [OPE-L] questions on the interpretation of labour values

From: Pen-L Fred Moseley (fmoseley@MTHOLYOKE.EDU)
Date: Sat Mar 24 2007 - 09:25:37 EDT

```Quoting ajit sinha <sinha_a99@YAHOO.COM>:
> _____________________________
> Okay, this is the last time I'm going to comment on
> this. Let me follow your reasoning step by step as put
> forward by you:
> (1)Firms revenue is determined by capital consumed
> (which is whatever it happens to be) plus the average
> profit on their invested capital.
> (2)The average profit is determined by the general
> rate of profit.
> (3) The general rate of profit is determined by the
> total surplus value in the economy as a whole.
>
> Let me assume that there is no problem with your
> procedure from (1) to (3). Thus according to your
> reasoning (1) cannot be determined unless (3) is
> known. Now, when I ask you how do you determine (3) or
> rather the total surplus value in the economy as a
> whole?, you tell me I take (1) as given and subtract
> the given capital (C+V) from it. And you think you do
> not indulge in circulat reasoning? Do whatever you
> want, but please don't attribute such reasoning to
> with friends like you he stands absolutely no chance!
> Cheers, ajit sinha

A very brief summary:

1.  S = N  - V

= mL - mLn      (where Ln = V/m)

2.  R = S /(C + V)

3.  PPi = (Ci + Vi)(1 + R)

PPi might also be called "gross industry reveune"

This is sequential determination (from the macro to the micro),
not circular reasoning.  C, V (and Ci and Vi), L and m are
taken as given, and from these N, S, R and PPi are derived.