Date: Tue, 1 Nov 94 17:38:35 MST From: guest account <guesta-AT-econ.utah.edu> Subject: "new" solution Instead of citing references that few will bother to look up, why don't we present the "new" solution? (No double counting (one assumption of this solution) i.e., all flax is used up in the production of linen (the total value of flax 4 will be the 4 c used to produce linen) Values Total Profit rate c v s Value S/C+V flax 0 2 2 4 100% linen 4 1 1 6 20% If goods traded at their values capitalists would move away from linen to produce flax --> supply of flax rises --> price of flax fall. . . conversely, supply of linen falls --> price of linen rise. As prices change, the realization of surplus value is redistributed until both departments equilibrate with the same profit rate. Prices Total Profit c v s Price rate flax 0 2 1 3 50% linen 3 1 1 6 50% Because all of the total value of the flax is used in the production of linen, the only net product is that of linen. The net product of values (6) is equal to the net product of prices (6) 6 = 6 --> the "new" solution guesta ------------------
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