ComradeRed
1st May 2006, 05:21
I've been thinking about this carefully lately and I think I found something rather interesting.
The rate of profit is the amount of surplus value created in a production process, denoted usually as surplus value (s) over capital (k). It should be noted that k=c+v for the constant capital <c>, which is in effect dated labor, and the variable capital (v) which is the cost of the labor used in the production process.
The rate of profit is supposed to denote the "extra" over the inputs. This is the composition of capital, the amount of labor added over the dated labor (dated labor being in the form of constant capital).
Isn't it valid to hypothesize that the rate of profit to multiply c+v by is (1+v/(v+c)) iff s/v=1? We get for C=s+k=s+v+c = (1+v/(v+c))(v+c) = 2v + c, then s=v.
A better formulation permitting a variable rate of exploitation would be, for some nonzero real rate of exploitation E=s/v, the rate of profit would be (1+E/k) (for the capital k=c+v).
This is saying the rate of exploitation (surplus value from fresh labor) over the capital (the dated labor inputs plus fresh labor) plus one is the rate of profit. This, I think, is what Marx meant to make the rate of profit (but I don't know, I never met the man).
As a test case let us examine a facility where the constant capital is 12 units of labor, the variable capital is v=6 units of labor, and the surplus value s=3 units of labor.
12+6+3=21 units labor is the cost for all the units output. The rate of profit is (1 + (3/6)/18) = 1 + .5/18 = 1 + 1/36 = 37/36. The price would be 37*21/36 = $21.5833 for the output.
When working with a whole economy, the situation is rathe interesting; I have the math if anyone is interested (I'm exhausted so I'll post them tomorrow :)). Ian Steedman's criticism from Marx after Sraffa are proved to be moot :D (***** thinks he can take on a quantum geometer, he's got a nonlinear proof coming :lol:)
The rate of profit is the amount of surplus value created in a production process, denoted usually as surplus value (s) over capital (k). It should be noted that k=c+v for the constant capital <c>, which is in effect dated labor, and the variable capital (v) which is the cost of the labor used in the production process.
The rate of profit is supposed to denote the "extra" over the inputs. This is the composition of capital, the amount of labor added over the dated labor (dated labor being in the form of constant capital).
Isn't it valid to hypothesize that the rate of profit to multiply c+v by is (1+v/(v+c)) iff s/v=1? We get for C=s+k=s+v+c = (1+v/(v+c))(v+c) = 2v + c, then s=v.
A better formulation permitting a variable rate of exploitation would be, for some nonzero real rate of exploitation E=s/v, the rate of profit would be (1+E/k) (for the capital k=c+v).
This is saying the rate of exploitation (surplus value from fresh labor) over the capital (the dated labor inputs plus fresh labor) plus one is the rate of profit. This, I think, is what Marx meant to make the rate of profit (but I don't know, I never met the man).
As a test case let us examine a facility where the constant capital is 12 units of labor, the variable capital is v=6 units of labor, and the surplus value s=3 units of labor.
12+6+3=21 units labor is the cost for all the units output. The rate of profit is (1 + (3/6)/18) = 1 + .5/18 = 1 + 1/36 = 37/36. The price would be 37*21/36 = $21.5833 for the output.
When working with a whole economy, the situation is rathe interesting; I have the math if anyone is interested (I'm exhausted so I'll post them tomorrow :)). Ian Steedman's criticism from Marx after Sraffa are proved to be moot :D (***** thinks he can take on a quantum geometer, he's got a nonlinear proof coming :lol:)