This is in reply to Daniel Davies.
People should really consult my paper. I answer these kinds of objections in it. "Why would anyone carry out production of a good worth half as much as its inputs?" They wouldn't, not knowingly. That's not what's at issue here. Consider the following tableaux: Even-numbered hours ------------------- sector input of A input of B output ------ ---------- ---------- ------ A 2 2 5 B 4 4 10 ----- - - total 6 6 Odd-numbered hours ------------------- sector input of A input of B output ------ ---------- ---------- ------ A 4 4 10 B 2 2 5 ----- - - total 6 6 There's a 1 unit negative net product of A during even-numbered hours and a 1 unit negative net product of B during odd-numbered hours. But over each 2-hour span, 15 units of A are produced, while only 12 are used up, and the same goes for B. So there's a positive (3 unit) net product of each good over each 2-hour span. If the relative price of A in terms of B happens to exceed 4 in even-numbered hours, and is less than 1/4 in odd-numbered hours, then profit -- when measured in terms of simultaneous valuation (when the input price is constrained to equal the output price) -- is negative in each hour, and therefore over every 2-hour span, and therefore always. But if wages are low, there is surplus-labor. So surplus-labor is not sufficient for positive profit under simultaneous valuation. "unless the less stylised version of this argument has some compelling reason why production of B would take place under these relative prices, I'm not sure that this conclusion can be established" This isn't relevant. What's at issue isn't what *will* happen, but what is necessary and sufficient. The above shows that surplus-labor is not *sufficient* for profit under simultaneous valuation -- one also must have the "right" kind of prices in order to have profit, or else no negative net product of anything, even for 1 hour. Right? Andrew Kliman
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