Date: Sun, 14 May 1995 17:12:30 -0400 (EDT)
From: glevy-AT-acnet.pratt.edu
Subject: [PEN-L:5081] Re: profit-rate equalization (fwd)


With apologies to Paul Cockshott, I am forwarding his PEN-L message since 
it deals with some issues we have discussed in the Marxism list.

---------- Forwarded message ----------
Date: Sun, 14 May 1995 13:57:05 -0700
From: Paul Cockshott <wpc-AT-clyder.gn.apc.org>
To: Multiple recipients of list <pen-l-AT-anthrax.ecst.csuchico.edu>
Subject: [PEN-L:5081] Re: profit-rate equalization

I have just done a new type of test on the data obtained
from the 3 methods of  predicting the price vector:
sraffian prices, 'New Solution' prices and classical
labour values. It occured to me that a common metric that
we use in vector quantisation of images to see which of
several vectors gives us the best approximation to an
target vector is to take the dot product of the vectors.

Let M be the vector of market prices, and V the vector of
labour values, then the dot product M.V would be the
projection of the value vector onto the market price
vector. The longer it is, the better the approximation.
To make this a valid comparison I ensure that in all
cases the total estimated values, prices of production
etc are made equal to the total market prices, by an
appropriate scaling.

Using the mexican input output table for 1980 I obtain
the following

Method of calculation           Dot product in square pesos
---------------------         ---------------------------
New Soln                                     2.538E+0012
Sraffian prices              2.535E+0012
Labour values                           2.596E+0012

The interpretation is that the New Soln of the
transformation problem is that advocated by Kliman, this
along with the sraffian one is used to compute vectors of
prices of production using the assumption that actual
rates of profit in each industry correspond to the
average rate of profit on a flow basis (62%).
The labour values are calculated assuming that the rate
of surplus value is constant in all branches of
production at 193%.

The result seems to indicate that the labour values are
the best predictor of market prices in Mexico with
sraffian prices the worst.

I hope shortly to have available the results of doing other
tests on the data.

P.S. I have just noticed that the exponent in the figures should
be E+24, since the original figures were in millions of pesos
not pesos.

Paul Cockshott



     --- from list marxism-AT-lists.village.virginia.edu ---

     ------------------