THE BORE
General => The Superdeep Borehole => Topic started by: Shostakovich on February 26, 2020, 10:35:32 PM
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I was rereading his book (I read it in December and absorbed the main points but didn't really try to understand all the logical steps) and as soon as we have a surplus we have, for the industry producing commodity A:
LAw + (1 + r)(ΣIApI) = ApA
Where I is the ith commodity. I took this at face value last time... but now I see that the ratio r, which he calls the rate of profit, is the ratio between revenue net of labor costs and the cost of circulating capital. However I would assume that labor costs should factor into the determination of the profit rate. :wtf The way it's written here it looks like the firm collects its revenue, doles out the wage bill due, and then what's left over divided by the cost of intermediate goods is the rate of profit. That isn't the real world - production takes time and wages are part of the investment.
Obviously this matters because the rate of profit is equalized between firms and the equations having a different logical form should surely affect the determination of the standard commodity and all the rest of it. At first I thought, you know, maybe it doesn't matter, but I worked out the prices for an example and of course the net rate of profit ends up being way different from Sraffa's r.
help? I know I have to be wrong :doge