Nathan,
> Julio, I would like to see reference to where the English side of the CCC
> confused a material unit of account with some other unit of account.
Joan Robinson (1954, p. 81):
"[T]he production function has been a powerful instrument of
miseducation. The student of economic theory is taught to write Q 5 f
(L, K ) where L is a quantity of labor, K a quantity of capital and Q
a rate of output of commodities. He is instructed to assume all
workers alike, and to measure L in man-hours of labor; he is told
something about the index-number problem in choosing a unit of output;
and then he is hurried on to the next question, in the hope that he
will forget to ask in what units K is measured."
I do not care whether a bourgeois economist is confused about this. I
care about us being confused. Joan Robinson was on our side, but she
was confused.
The units of so-called "capital" in the production function are
"physical." But the fact that these *are* physical units of means of
production at whichever level of aggregation one may choose does not
imply that the *material* content of value categories, which are
ratios of physical or use-value units, do not enter in the
aggregation. They *necessarily* do.
In my blog post, I make the point that under complete communism, with
no commodity production at all, the producers deciding at a higher
level on how much to produce in the gadget industry will have to
somehow aggregate gadget x with gadget y and with gadget z; that they
will need to assign weights indicative of the relative social
importance ("valuation" but in a communist setting) given to each type
of gadget, and that those weights or "shadow" relative "prices" are
ratios of physical or use-value units. Strictly speaking, these
material proportions have nothing to do with prices, because there's
no commodity production in this setting. Yet they are akin to prices
in their *material* content.
The fact that people have a hard time seeing this attests to the
strength with which our day-to-day life under capitalism fragments our
experience. Use-value and value categories are not separate and apart
in the ontological sense. We separate them in thought. Values are
use values involved in certain social relations, relations among
people.
> I'm also confused why you don't take the Leontief solution. his production
> functions are purely physical. after all the actual soviet union (as well as
> the united states) used input output data in various aspects of planning.
Nathan,
The "Leontief solution" uses "shadow prices" to "aggregate" industries
or product lines so that final demands can be mathematically
"transformed" into target output levels. What do you think the B
matrix is all about? How is the B matrix determined? Hint: You have
to invert the (I - A) matrix. Aren't these "multipliers" or "shadow
prices" or (Pasinetti's) "vertically integrated labor coefficients" --
i.e. ratios of *physical* units? What do you think these shadow
prices would look like under capitalism? Indeed, they would look like
relative prices, profit rates, etc.
Not that this matters here, but the Leontief case can be viewed a
particular instance of a broader set of "neoclassical" models,
distinguishing itself by the restrictive assumption of zero input
substitution elasticity. Nothing necessarily wrong with restrictive
assumptions though.
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