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<DIV style="FONT: 10pt arial">----- Original Message ----- </DIV>
<DIV
style="BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: black"><B>From:</B>
<A title=sokol@jhu.edu href="mailto:sokol@jhu.edu">Wojtek Sokolowski</A>
</DIV>
<DIV style="FONT: 10pt arial"><B>To:</B> <A title=lbo-talk@lbo-talk.org
href="mailto:lbo-talk@lbo-talk.org">lbo-talk@lbo-talk.org</A> </DIV>
<DIV style="FONT: 10pt arial"><B>Sent:</B> Tuesday, December 12, 2006 4:15
PM</DIV>
<DIV style="FONT: 10pt arial"><B>Subject:</B> RE: [lbo-talk] technical
conditions approach</DIV>
<DIV><BR></DIV>
<DIV class=Section1>
<DIV>
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<P class=MsoNormal><FONT face="Times New Roman" color=blue size=3><SPAN
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size=2></FONT> </o:p></SPAN></FONT></P></DIV>
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<P class=MsoNormal><FONT face="Times New Roman" color=blue size=3><SPAN
style="FONT-SIZE: 12pt; COLOR: blue">I think that most today’s prices, at
least in the developed world, are driven by the rent component, not by the
reproduction of labour power (i..e. the actual cost of production)
component. That is to say, a garment that sells for say $50 at Macy’s
has about $2 reproduction of labor power component (i.e. actual production
cost) and $48 in economic rent, i.e. charge for the Macy or other designer
schmuck brand. <o:p></o:p></SPAN></FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" color=blue size=3><SPAN
style="FONT-SIZE: 12pt; COLOR: blue"><o:p> </o:p></SPAN></FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" color=blue size=3><SPAN
style="FONT-SIZE: 12pt; COLOR: blue">I believe that LOTV does not say much
about that $48, which IMHO limits its usefulness in explaining how modern
economy works.<o:p></o:p></SPAN></FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" color=blue size=3><SPAN
style="FONT-SIZE: 12pt; COLOR: blue"><o:p> </o:p></SPAN></FONT></P>
<P class=MsoNormal><FONT face="Times New Roman" color=blue size=3><SPAN
style="FONT-SIZE: 12pt; COLOR: blue">Wojtek<o:p></o:p></SPAN></FONT></P></BLOCKQUOTE></DIV><FONT
face=Arial size=2>
<P class=MsoNormal style="MARGIN: 0cm 0cm 0pt">Leather Shoes: Final Sales
Price $70 US</P>
<P class=MsoNormal style="MARGIN: 0cm 0cm 0pt"> <o:p></o:p></P>
<P class=MsoNormal style="MARGIN: 0cm 0cm 0pt">Immediate Cost of
production</P>
<P class=MsoNormal style="MARGIN: 0cm 0cm 0pt"> <o:p></o:p></P>
<P class=MsoNormal style="MARGIN: 0cm 0cm 0pt">Leather 4$</P>
<P class=MsoNormal style="MARGIN: 0cm 0cm 0pt">Energy 3$</P>
<P class=MsoNormal style="MARGIN: 0cm 0cm 0pt">Equipment 3$</P>
<P class=MsoNormal style="MARGIN: 0cm 0cm 0pt">Paid Labour 1$</P>
<P class=MsoNormal style="MARGIN: 0cm 0cm 0pt">Unpaid Labour 1$</P>
<P class=MsoNormal style="MARGIN: 0cm 0cm 0pt"> <o:p></o:p></P>
<P class=MsoNormal style="MARGIN: 0cm 0cm 0pt">Total cost 12$</P>
<P class=MsoNormal style="MARGIN: 0cm 0cm 0pt">Profit to factory owner 1$</P>
<P class=MsoNormal style="MARGIN: 0cm 0cm 0pt">Value added by labour 1$</P>
<P class=MsoNormal style="MARGIN: 0cm 0cm 0pt">Sale cost to intermediate
seller 12$</P>
<P class=MsoNormal style="MARGIN: 0cm 0cm 0pt"> <o:p></o:p></P>
<P class=MsoNormal style="MARGIN: 0cm 0cm 0pt">Shipping cost from factory to
US including warehousing and port handling costs 22$</P>
<P class=MsoNormal style="MARGIN: 0cm 0cm 0pt">Energy 6.00$</P>
<P class=MsoNormal style="MARGIN: 0cm 0cm 0pt">Equipment 6.00$</P>
<P class=MsoNormal style="MARGIN: 0cm 0cm 0pt">Paid labour 5.00$</P>
<P class=MsoNormal style="MARGIN: 0cm 0cm 0pt">Unpaid labour 5.00$</P>
<P class=MsoNormal style="MARGIN: 0cm 0cm 0pt"> <o:p></o:p></P>
<P class=MsoNormal style="MARGIN: 0cm 0cm 0pt">Total unit cost 34$</P>
<P class=MsoNormal style="MARGIN: 0cm 0cm 0pt">Profit to shipping company and
port authority $5.00</P>
<P class=MsoNormal style="MARGIN: 0cm 0cm 0pt">Value added by Labour 5$</P>
<P class=MsoNormal style="MARGIN: 0cm 0cm 0pt"> <o:p></o:p></P>
<P class=MsoNormal style="MARGIN: 0cm 0cm 0pt">Transport to Main Warehouse
4$</P>
<P class=MsoNormal style="MARGIN: 0cm 0cm 0pt">Energy 1.50$</P>
<P class=MsoNormal style="MARGIN: 0cm 0cm 0pt">Equipment .50$</P>
<P class=MsoNormal style="MARGIN: 0cm 0cm 0pt">Paid Labour 1$</P>
<P class=MsoNormal style="MARGIN: 0cm 0cm 0pt">Unpaid labour 1$</P>
<P class=MsoNormal style="MARGIN: 0cm 0cm 0pt"> <o:p></o:p></P>
<P class=MsoNormal style="MARGIN: 0cm 0cm 0pt">Total Unit Cost 38$</P>
<P class=MsoNormal style="MARGIN: 0cm 0cm 0pt">Profit to Transport Company
1$</P>
<P class=MsoNormal style="MARGIN: 0cm 0cm 0pt">Value added by labour 1$</P>
<P class=MsoNormal style="MARGIN: 0cm 0cm 0pt"> <o:p></o:p></P>
<P class=MsoNormal style="MARGIN: 0cm 0cm 0pt">Central Warehousing 7$</P>
<P class=MsoNormal style="MARGIN: 0cm 0cm 0pt">Energy 1.50$</P>
<P class=MsoNormal style="MARGIN: 0cm 0cm 0pt">Equipment 1.50$</P>
<P class=MsoNormal style="MARGIN: 0cm 0cm 0pt">Paid Labour 2$</P>
<P class=MsoNormal style="MARGIN: 0cm 0cm 0pt">Unpaid labour 2$</P>
<P class=MsoNormal style="MARGIN: 0cm 0cm 0pt"> <o:p></o:p></P>
<P class=MsoNormal style="MARGIN: 0cm 0cm 0pt">Total unit cost 45$</P>
<P class=MsoNormal style="MARGIN: 0cm 0cm 0pt"> <o:p></o:p></P>
<P class=MsoNormal style="MARGIN: 0cm 0cm 0pt">Transport to Regional Warehouse
4$</P>
<P class=MsoNormal style="MARGIN: 0cm 0cm 0pt">Energy 1.50$</P>
<P class=MsoNormal style="MARGIN: 0cm 0cm 0pt">Equipment .50</P>
<P class=MsoNormal style="MARGIN: 0cm 0cm 0pt">Paid Labour 1$</P>
<P class=MsoNormal style="MARGIN: 0cm 0cm 0pt">Unpaid labour 1$</P>
<P class=MsoNormal style="MARGIN: 0cm 0cm 0pt"> <o:p></o:p></P>
<P class=MsoNormal style="MARGIN: 0cm 0cm 0pt">Total unit cost 49$ </P>
<P class=MsoNormal style="MARGIN: 0cm 0cm 0pt"> <o:p></o:p></P>
<P class=MsoNormal style="MARGIN: 0cm 0cm 0pt">Regional Warehousing 7$</P>
<P class=MsoNormal style="MARGIN: 0cm 0cm 0pt">Energy 1.50$</P>
<P class=MsoNormal style="MARGIN: 0cm 0cm 0pt">Equipment 1.50$</P>
<P class=MsoNormal style="MARGIN: 0cm 0cm 0pt">Paid Labour 2$</P>
<P class=MsoNormal style="MARGIN: 0cm 0cm 0pt">Unpaid labour 2$</P>
<P class=MsoNormal style="MARGIN: 0cm 0cm 0pt"> <o:p></o:p></P>
<P class=MsoNormal style="MARGIN: 0cm 0cm 0pt">Total Unit Cost 56$</P>
<P class=MsoNormal style="MARGIN: 0cm 0cm 0pt"> <o:p></o:p></P>
<P class=MsoNormal style="MARGIN: 0cm 0cm 0pt">Transport to Store 4$ </P>
<P class=MsoNormal style="MARGIN: 0cm 0cm 0pt">Energy 1.50$</P>
<P class=MsoNormal style="MARGIN: 0cm 0cm 0pt">Equipment .50</P>
<P class=MsoNormal style="MARGIN: 0cm 0cm 0pt">Paid Labour 1$</P>
<P class=MsoNormal style="MARGIN: 0cm 0cm 0pt">Unpaid labour 1$</P>
<P class=MsoNormal style="MARGIN: 0cm 0cm 0pt"> <o:p></o:p></P>
<P class=MsoNormal style="MARGIN: 0cm 0cm 0pt">Total unit cost 60$</P>
<P class=MsoNormal style="MARGIN: 0cm 0cm 0pt"> <o:p></o:p></P>
<P class=MsoNormal style="MARGIN: 0cm 0cm 0pt">Warehousing cost at store 7$
</P>
<P class=MsoNormal style="MARGIN: 0cm 0cm 0pt">Energy 1.50$</P>
<P class=MsoNormal style="MARGIN: 0cm 0cm 0pt">Equipment 1.50$</P>
<P class=MsoNormal style="MARGIN: 0cm 0cm 0pt">Paid Labour 2$</P>
<P class=MsoNormal style="MARGIN: 0cm 0cm 0pt">Unpaid labour 2$</P>
<P class=MsoNormal style="MARGIN: 0cm 0cm 0pt"><SPAN
style="mso-spacerun: yes"></SPAN> </P>
<P><SPAN
style="FONT-SIZE: 12pt; FONT-FAMILY: 'Times New Roman'; mso-fareast-font-family: 'Times New Roman'; mso-ansi-language: EN-CA; mso-fareast-language: EN-US; mso-bidi-language: AR-SA">Total
unit cost 67$</SPAN></FONT>
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