On Dec 12, 2006, at 10:48 AM, Rakesh Bhandari wrote:
>
> A model of total automation; Spencer Pack gives a simple example.
>
>
>
> 28 56 0 0
> 16 0 48 0
> 12 0 0 8
> 56 56 48 8
>
>
> What we have in the first column is inputs of computers (28,16,12, 56
> total) needed to make 56 computers, 48 units of gold, and 8 units of
> wheat.
>
> That is, 28 computers => 56 computers
> 16 computers => 48 units of gold
> 12 computers => 8 units of wheat
> 56 computers => 56 computers, 48 units of gold, 8 units
> of wheat
>
>
> The economy is in simple reproduction because it produces only 56 new
> computers, and 56 computers are needed to produce computers, gold and
> wheat at the same scale again.
>
> There is no direct labor in this economy; there is not even indirect
> labor as computers, gold and wheat are themselves the products of
> commodities--the literal production of commodities by commodities.
>
> According to Pack this economy can be solved for relative prices and
> a uniform profit and absolute prices as well if we assume by
> definition that the price of one unit of gold equals $1.
>
> (1 + r) (28pc) = 56 pc
> (1 + r) (16pc) = 48
> (1 + r) (12pc) = 8pw
>
> r is the profit rate while pc and pw are the unit prices of computers
> and wheat.
>
> From the first equation we know the profit rate has to be 100%; price
> of one computer is $1.50 and price of one unit of wheat is $4.50.
>
> So contrary to the LTV, there can be a positive rate of profit and
> relative prices in a totally automated economy.
Why does the owner of the computer production process sell computers to others rather than just use them herself to produce 8 units of wheat and 48 units of gold? On the assumptions here, she only gets 24 units of gold and 4 units of wheat if she sells them.
Ted