RE: What is profit? (was: Re: [ox-en] Re: "At Cost")
- From: "Paul Cockshott" <wpc dcs.gla.ac.uk>
- Date: Mon, 22 Sep 2008 09:32:19 +0100
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I am replying to this one point since it is the key one.
Paul:
No it does not imply this. Value added can be proportional to labour
provided that the customary share of value added between wages and
profits is approximately the same in all industries.
Why are you talking about "value added"?
I'm not talking about "value added", I'm talking about the difference
between owner costs and consumer price.
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Paul:
Adam Smith showed that all prices can be decomposed into
wages + profit, since costs are either wages, or purchased non-labour
inputs, whose price will in turn ultimately decompose into wages + profits
This amounts to saying that the final cost of any commodity is
made up of value added at different stages of the the production chain.
Thus in explaining profits one ultimately has to explain the relative
shares of wages and profits in value added.
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