Re: Surplus Value or Profit

[Gunnar Tómasson <gunnar.tomasson@xxxxxxxxxxx>]

Bruce:

With respect to the key point at issue, you wrote earlier:

> Of course he does not explain *at this point* how effective
> demand can exceed the factor cost of A, since he has already
> explained that effective demand arises in part from the
> fraction of aggregate income devoted to expenditure, and in
> part from the creation of purchasing power through finance.

And I noted the following:

A brief cursory look through Chs. 1-6 did not reveal any passage in which
Keynes 'explains' that "effective demand arises in part...from the creation
of purchasing power through finance."

Now you write:

> A portion of the purchasing power generated by income, plus
> purchasing power created through finance, provides the effective
> demand for the output of businesses and determines the value of
> the output, barring mis-anticipations of effective demand which
> lead to unanticipated changes in inventories.  This value of
> output is the income derived from in the aggregate by all the
> elements in the community concerned in a productive activity.
>
> Simple.

Comment:

You have yet to identify the passage in Chs. 1-6 in which Keynes

> already
> explained that effective demand arises in part from the
> fraction of aggregate income devoted to expenditure, and in
> part from the creation of purchasing power through finance.

Gunnar






----- Original Message -----
From: "Bruce McFarling" <ecbm@xxxxxxxxxxxxxxxxxxx>
To: <pkt@xxxxxxxxxxxxxxxx>
Sent: Saturday, November 24, 2001 6:35 PM
Subject: Re: Surplus Value or Profit


> At 13:15 24/11/01 -0500, Gunnar Tómasson
> <gunnar.tomasson@xxxxxxxxxxx> wrote:
>
> >...
> >"...But, apart from this, the conclusion that the *costs* of
> >output are always covered in the aggregate by the sale-proceeds
> >resulting from demand, has great plausibility, because it is
> >difficult to distinguish it from another, similar-looking
> >proposition which is indubitable, namely that the income derived
> >in the aggregate by all the elements in the community concerned in
> >a productive activity necessarily has a value exactly equal to the
> >*value* of the output."
>
> >I fail to see how this *indubitable* proposition can be squared
> >with the notion that "the creation of purchasing power through
> >finance" is part of Keynes's core thesis.
>
> Of course ... if you did not fail to see this, you would not be
> pursuing these particular misinterpretations of the General
> Theory. In any event, lets see how difficult it is to square the
> two:
>
> A portion of the purchasing power generated by income, plus
> purchasing power created through finance, provides the effective
> demand for the output of businesses and determines the value of
> the output, barring mis-anticipations of effective demand which
> lead to unanticipated changes in inventories.  This value of
> output is the income derived from in the aggregate by all the
> elements in the community concerned in a productive activity.
>
> Simple.
>
> Virtually,
>
> Bruce McFarling, Shortland, NSW
> ecbm@xxxxxxxxxxxxxxxxxxx
>
>