Profit Rate of Marx The "Ricardo Effect" of Hayek and Model Du Pont PDF

Parallels between the prot rate of Marx, the "Ricardo Eect" of Hayek, and model Du Pont
by: Carlos E. Pascuali
Universidad Nacional de Rosario - 2009
Seccin 1
1Sum m ary
This paper attempts to make use of the statement by Paul Samuelson the existence of analogies between the basic structures of dierent theories: ... Implies the existence of a general theory to underpin to individuals and one with respect to these central characters. It attempts to explain the symmetries and parallels between dierent approaches to determining the rate of prot. To demonstrate these parallels between particular approaches, is the rst step toward nding of what Samuelson called the general theory , which would unify the analysis considered dierent theories. The approaches discussed here are: the determination of the rate of gains in the price level of production that Marx made in the Book III of Capital. Determination that is going to take place, inter alia, the problem called transformation of values into prices of production. The called Du Pont model system or the return on equity companies, widely used system in the world of corporate nance and nally the model used by F. Hayek in his article The Ricardo eect. Equal the rate of prot according to the approaches is trivial, but what is not a triviality when we dene the rate of gain as a function of the spin yield multiplied by the number of turns taken in the year. First we will present briey the three approaches and then analyze their equivalents, and possible theoretical linkages, holding that lead to the same results and, more signicantly, the same view of the situations under analysis. Moreover be discussed considering that such modes of determining the rate of gain, fall in conict with the neoclassical production function within certain limits and if certain units of measurement. They try to emphasize that analysis approaches in the emphasis placed in the variable CAPITAL TURNOVER.Or average product of capital (PMEK) and analytical importance has failure limit, or homogenization, the duration of the production processes equal to a period of time, considering dierent durations of cycles productive. Moreover signicant numerical problems should be taken in the theoretical, as employed by these authors and by Ricardo and Wicksell , And apply the formulations in question analysis.
Summary
Keywords: Symmetry theoretical parallels between dierent approaches, determination the rate of prot, Du Pont, Marx, Hayek, Ricardo eect, Ricardo, Wicksell. Capital turnover. Temporal duration of production cycles. rate prot (g) as a function of turnover rate (r) and the number of turnover annual capital (n):G(r, n) = r n.
Seccin
ndice
1 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 2 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 2.1 Hypothesis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 2.2 Justication . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 3 Historical introduction to the subject ... .. ... ... .. 9
3.1 The development of the concepts in the area of nance . . . 9 3.1.1 What concept of capital used in nancial theory . . . 10 3.1.2 Hamilton Macfarland Barksdale. A mental revolution: the historical origin of the Du Pont formula . . . . . . . . . . . . 11 3.1.3 The concepts of ow and rotation in the paradigm Du Pont . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 3.2 The notion of a capital in the Austrian theory . . . . . . . 17 3.2.1 The background: W. S. Jevons and the average period of production. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 3.2.2 Analysis of K. Wicksell average period of production. . 24 3.2.3 Wicksell to Hicks and capital measurement within the Austrian approach. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 3.3 Hayeks model on the Ricardo eect . . . . . . . . . . . . . . 29 3.3.1 Hayek Model Assumptions . . . . . . . . . . . . . . . . . 29 3.3.2 Conclusion on Hayek model . . . . . . . . . . . . . . . . 33 4 The rate of prot in Marx . . . . . . . . . . . . . . . . . . . . . 34 4.1 Background: David Ricardo. . . . . . . . . . . . . . . . . . . . 34 4.2 Capital and time in Karl Marx . . . . . . . . . . . . . . . . . 39 4.3 Some conclusions on the model of Marx of rate of prot. . 50 5 Comparative of formulations. . . . . . . . . . . . . . . . . . . 50 . . . . 50 54 55 57
5.1 Comparative . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2 Application of the formulas compared . . . . . . . . . . . . 5.2.1 Wicksells problem and the rate of prot. . . . . . . 5.2.2 The problem of Ricardo and the issue of machinery
ndice
5.2.3 On the transformation of values of commodities into prices of production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 5.3 The formula "M-DP-H" and the production function . . . 69 6 Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72 . . . . . . . . . . . . . . . . . . . . . . 78
7 Bibliographic references
Seccin 2
2 Introduction
Among the dierent formulations for the determination and ex- complication rate of corporate protability are the denominado Du Pont system [66], the formulation made by C. Marx in Book III of Capital [35] and arising from the article by Professor F. Hayek called Ricardo eect [19] which relates variations in the rate of return with variations in the periods of rotation of capital. When comparing the same are certain parallels form and the use of similar variables. Thus, for example, three are characterized by giving a marked- phasis to the category of rotation, giving relevance to the spin cycles assets, sales, etc., which enter as variables in the three forms formulations. Marx will develop his famous expression D M D 1, in which incorporates the time of rotation and on which its sits formulation of the gain, the Du Pont system relies on the consideration of the company as a system of fund ow, and the Hayek article used as one of the key variables to speed of capital. However, these formulations belong to or are part of theoretical approaches that are often considered dierent and even contra- posts, and they are used in dierent dimensions of analysis: while the development of Marx and Hayek they have been used in preference to level of economic aggregates, Du Pont system it uses micro economically. In addition to comparing and analyzing whether the variables employed are the same conceptually, and fulll the same roles in the three formulations, one wonders whether the use of the three formulas- mules, starting from the same business data, lead to equal explanations and predictions. In short: to analyze the cycle D M D as a process that occurs over time and highlight fundamental variable mental number of rotations the capital, or assets are in a period of time, is what will provide the foundation of the proposed relationship between the hypothesized gain formula Marx, the Du Pont and the article by Hayek.
2.1 Hypothesis
The hypothesis is that when you try to prove Marx says:
1. Spanish nomenclature is preserved:D M D , rather than money-commoditiesmoney ; M C M .
Introduction
The sum of the values (plus values) is determined, therefore, the value set in rotation multiplied by the number of rotations in a given period. Rotation of capital is = the production time + circulation time . Is implying, in terms of values, so the system Du Pont, price level, noted in the expression: ROE = ROS ATO Where: ROE return over equity ROS return over sales sales ATO assets turn over capital And what Hayek expressed in the formula: i=m t i prot rate on capital m prot rate per cycle t annual turnover rate of assets It is argued that the proper use of any of the three expressions described above, can reach the same conclusions, ie they have the same explanatory and predictive capacity. This is because the conceptual framework to see the production process as cycle or rotation of funds: D M D + D =D constitutes the foundation and is behind the three formulations as insight into the production process as feedback loop or reproduction of capital. As a secondary hypothesis arises to talk about D M D as Marx and see the enterprise as a system of fund ow, the way considered by modern nancial management is the same.
sales prot
Seccin 2
2.2 Justication
This is a signicant problem because it involves explicitly linking an empirical and based on accounting data, which has become part of the Financial Administration - the model ROE / ROI or Du Pont system conceptual frameworks belonging to the economic theory: the Ricardo Eect of Hayek and the approach made on the rate of prot in Book III of The Capital, belonging to Marx. One hypothesis that attempt to demonstrate, as we noted, is the three formulations have the same conceptual framework. Holding which applies the same conception, in case the hypothesis posed must be veried, it would unify under one umbrella three dierent developments and considered non relacionados. In case is proved that the hypothesis proposed in advance knowledge of the dierences of the three theoretical schemes and what behind the appearance of similarity. Clearly this would a theoretical advance in the one case as in another. Consider apply theoretical analytical tools such as the system Du Pont, tried to explain and predict success at the micro level allow an ecient explanatory power of phenomena at macro. This is possible if evidence theoretical relations existing. It is considered important for employees to three developments determine the rate of return, which now run by lifts dierent and which is treated as belonging to compartments watertight and not interconnected, they are related expressly which highlight the contact points which have in common. It believes that this is going to generate mutual enrichment between theory and practical developments, the Du Pont system may have relationships theoretical frameworks from which today lacks, while the model called The Ricardo eect of Hayek and formulation on the rate of gain made in Book III of The Capital by Marx, they can earn empirical applicability. Despite all the imperfections theory that may arise regarding the use of variables in the mode used, by the Du Pont system, the majority of the authors considered relevant to the eld of nancial management recognized to their best advantage the type of data used, which in practice business are those obtained with lower cost and greater ease. It believes that showing the proposed relationships can be shown the impact on the relative prices movement along the cycle economic, because of variations in the rate of capital turnover. The important
Historical introduction to the subject
thing is that it could make from accounting data. The technical term feedback loop . The characteristic of a feedback loop is that presents a set of causally connected elements in the that an initial cause propagates cycle through the elements returning to the origin point at a time dierent from initiation, and in which the end of a cycle giving rise to a new process.
3 Historical introduction to the subject

The basic concept in this analysis is the capital, many sometimes given to it by sitting or not yet clear what is meant by it, or comparing concepts used by the authors with dierent meanings beyond the common name occasionally used. Lets clarify under which senses applied the concept of capital, Marx 2, prevailing nancial theory and Hayek. We begin by the area of nance and the Du Pont formula.
3.1 The development of the concepts in the area of nance

While nancial theory began to emerge in late not until the nineteenth century marked the period between 1950 and 1970 that dened many of its key concepts, tools and theories. Selecting a few authors hypothesized that the same founding authors and are basing this assumption on the relevance of work in the eld of nance for the purpose of taking them Du Pont and the system as presented. The authors chosen are: Ezra Solomon, Miller, Merton, Modigliani, Alchian, Robicheck, Anthony, J. Fred Weston, J.C. Van Horne, all contributions linked to an article signicant in the eld of nancial economics. As we shall see Du Pont formula is developed in the corporate practice in the end nineteenth century, but is institutionalized academically and is reported on all for the work of these authors since 1950. but before entering the actual history should be claried as were used or still used in nancial theory concepts, mainly the capital.
2. Not repeat hereinafter, in the context of this work, we understand the talk about the categories used by Karl Marx (rate of prot, turnover, capital, etc.). the expressed and used in Book III of The Capital, unless otherwise indicated otherwise expressed.
10
Seccin 3
3.1.1 What concept of capital used in nancial theory According to E. Solomon 3 assessing the return on investment or ROI can be determined by evaluating the performance of every dollar invested. This performance can be calculated in various ways. Some are based on accounting standards and other streams in discounted cash. The rst way that explains [55] is that of accounting standards, we will focus on this item because it is valid within the context of this work. ROI evaluations grounded in accounting standards is to measure some extent of utility, performance or prot on some measure of expenditure or investment, taking accounting data. The result is a rate generally shown as percentages and therefore used both the denominator and the numerator amounts expressed in the same type of units. This "RATE" as is based on accounting data of the amount activities expressed in the numerator and denominator, thus often called accounting rate of return. And the same, how is it calculated? Solomon notes that there are several ways to measure and all are corstraight as each responds to dierent questions. There were at least in the decades of the 50 , 60 or 70 generally accepted standards results to calculate the ROI4 and states that all are correct or valid, what is required is to specify clearly the method of calculation. this healthy general recommendation is ignored today. Ultimately argues that formula is simply a convention used in a professional practice. In the second term in the eld of concrete practice nancial management in large corporations, from start twentieth century, took form a system of calculation and measurement of the rate corporate prot called ROE, acronym for: return over equity . The academic theory of nancial management in the sixties named in this development as Du Pont system and incorporated it as a tool - sometimes unnamed - in most of the relevant academic literature. Such as the works of F. Weston, Van Horne, Merton, and so on.
3. [Page 92 et seq] 4. Ibidem.Pgina 939.
11
3.1.2 Hamilton Macfarland Barksdale. A mental revolution: the historical origin of the Du Pont formula The development of administrative and nancial management paralleled the historical formation of large corporations. Especially in the U.S. between 1880 and 1935 are developing guidelines for managing signicant normally used in present. By taking large corporations relevance in the collection of savings through issues of shares, bonds, etc.., and the consequent development of markets and nancial instruments; begin to require certain information, primarily intended for the investing public. The information required, such as nancial reports, etc.. involve a new form of management, management that will be characterized by relying on quantitative data that allow vision of business progress. Within that period of design administrative systems Barksdale said Hamilton Macfarland ( 1861 to 1918). Lets look in detail at this point. In the early twentieth century a group of executives: Pierre Du Pont, Amory Haskell and Barksdale were dedicated to making what would now be called a re-engineering in the chemical company Du Pont de Nemours. This process, which was analyzed in detail by Alfred Chandler, pioneer in the history of business in the U.S., began operating in the high explosives department of the company and consisted of application of the concepts developed by Frederick W. Taylor on The Principles of Scientic Management in a premeditated manner. H. M. Barksdale, who had just assumed as a manager general of the company, piloted this mental revolution, as has sometimes been referred to by authors such as John C. Rumm. Regardless of the particular issue at hand should be noted that this process of Du Pont is a milestone in the history of the administration and has been studied as a case type of conict management and organizational resistance to change, for example by Professor Christiane history Diehi-Taylor of the University of Minnesota. Barksdale was who reorganized and led to positions featured on the market at the Du Pont de Nemours, organized the systematic way of managing that company who then was transferred its mode to General Motors and through it, what is usually known as the Sloan system, the majority of U.S. corporations Among some administrative innovations made are the following: coding in an internal manual of the "how-to" administrative of Du Pont,
12
Seccin 3
establishing the Department of Product Development, start analyzing purchases and set the workow as tool, inventory analysis and its rotation, establish the market analysis department in 1906!! hire economists to estimate the progress of the national economy, which implemented perhaps the rst macroeconomic analysis department in a private company, placing technical services within customer! (which in sometimes takes it as an invention of the 80s), all this was done successfully before 1910.
For Barksdale mode control business was measuring the return on investment of capital. Under his leadership a group of young executives devised a measurement system for this purpose. This system was baptized, years later, as system Du Pont in honor of the corporation in which Donaldson Brown in 1903 (Disciple and son of Hamilton Macfarland Barksdale), who occupied the role of Senior Executive Accounting, built the ROI model: the protability of sales multiplied by the annual turnover of assets . Later other Du Pont executives discovered the importance of another variable: the leverage or leverage: Total assets divided by equity capital and formed the ROE formula as it is known today day Newton Fowler, citing a 1990 article in Selling & Sticney F. considers Donaldson Brown was the creator of the formula Du Pont , though some authors interpret the inspiration was Hamilton Macfarland Barksdale, father-in-law, teacher and head of Donaldson Brown, as discussed above. The latter in his memoirs seem to support this interpretation as recognizing Barksdale great strategist of the managerial revolution created by the Du Pont and after the rst Great War would be continued in the General Motors which extend to almost all large corporations5.
5. [3, pg.:151- 153]
13
Anyway although Donaldson Brown can be considered as the creator of the ROI formula, which is the basis of the system, who was not drafted ROE mode, as noted earlier.Based on the analysis of Russell B. Read on Return on investment. A guide to management decisions 6 and picture published in [54, page 203] was standardized in the manner formula which can be displayed in the following gure 2.1: The nancial control system called Du Pont used accounting data, being the administrative department of the company data supplier. This led to consider Solomon Esra these charges as accounting rates of return 7, as noted earlier. While there is much literature review of such fees as the pioneer accounting article Solomon & Laya, Measuring the productivity of the company: some systematic errors cos committed in the rate of return in general all, even Solomon end up recognizing the practicality, not easily suplantable of work down with accounting data8.
Figura 1. Du Ponts scheme
6. [NAA; June, 1954] 7. [55, page 92-93] 8. Solomon & Laya say: the ratio of net income to net assets per books, not a reliable measure, to estimate the overall performance of an investment. Furthermore this analysis requires a certain amount of return on investment and No other way to measure this concept in a division or company.[49]
14
Seccin 3
Almost 40 years after the articles of Joel Dean Measuring the Productivity of Capital and The payo period and the rate of prot of M.J. Gordon, 1955 9 who initiated the critical accounting data used in the formula Du Pont, Richard S. Teitelbaum [60] in an article in Fortune April 1996 states that the largest U.S. industries still employ Du Pont model, it is built with one of the indices of S & P 400, and despite attempts to implement replacements to date no substitutes that have neither the simplicity, elegance and practicality of the Du Pont formula.
9. [54, pages 21 to 31/48 to 56]
15
With the development of computerized administrative systems such SAP or equivalent, in which transactions are recorded in real time, this formula has better support data. Beyond the problems of measurement data is real time, the Current computerization reinforces the value of Du Pont formula. 3.1.3 The concepts of ow and rotation in the paradigm Du Pont It is also important to note that Erich Helfert 10developed, among others, detail the concept of the company as a circulation system in the form of funds usually represented today. The focus of the company and fund ow system is closely linked to the model Du Pont and is an estimate of said formulation.
COMPANY The Bell Telephone Co. of Pennsylvania The Coca-Cola Company Eli-Lilly Ford Motors Company Merck & Co. Vick Chemical Union Carbide West Virginia Pulp and Papers Co.
COMPANY Campbell Soup Company Du Pont de Nemours Federal-Mogul General Electric Company Rheem Manufactoring The Timken Roller Westinghouse Electric Corp and so on
Tabla 1. List N.A.A
Du Pont system is generally used in two versions: Weighing the gain on equity - ROE - or pondering on Total Capital invested in the business in question: ROI (return over investment). Both modalities, according to the objective of the proby: posal, remain in daily use tools most corporations to date11. The ow of funds approach is based on the recognition of the next cycle.
10. [23] 11. [60]
16
Seccin 3
cash purchases production sales collection cash + cash Rotation cycle or time consuming. Each of the above categories: cash, purchases, etc., Represents a stadium employee by money capital in successive transformations until reversion to the original form. For description of Du Pont formula used the publication of the National Association of Accountants [41] intended for assessment of historical and projected protability of companies. This work was made by the NAA with participation of 44 companies belonging dierent sectors or activities of these three preferred not to give to know his name, the 41 were named companies as listed in Table 1. As you can see in the sample of companies in Table 1, companies are not only globally but signicant belonging to various productive sectors, the total interviewed 42 Du Pont system used to evaluate their performance.From the authors concerned and the work of the Du Pont formula NAA in version used is constructed as: roe = (utility sales) (sales assets) Of course the above expression assumes that no debt or passive, in case of considering the eect thereof include leverage constructing the formula as follows:
roe = (utility sales) (sales assets) (assets equity) In this work, as Hayek and Marx did not consider the debts or liabilities since they vanish at the macro level, consider the equation given in addition to rst disregard liabilities assuming that there are the same, the same as the capital asset and roe roi. What is the concept that gives NAA categories or variables that make up the formula at work mentioned above, such as capital,equity, etc?. The answer is simple: The forty-two comcompanies that use the return on equity to evaluate performance been based both prots and capital, in the gures in nancial statements 12.
17
This has a logic beyond the theorethe above formulatical discussion the quality of the gures, which should be the quantities to be used, that the ideal is to use the category of Capital goods and analyze physical drives protability and more beyond the problems of homogenization of the categories, companies using available data, with all its aws, are a reasonable guide for decision making. No class companies working with global production functions, marginal productivity the marginal productivity of capital and production factors. the decisions and analyzes of what happened or what may happen - About decisions involving capital and protability-are taken with other tooling which the model called Du Pont is the paradigm. Of course this does not mean that is invalidated to production functions, etc., here arises only comfort operational availability based on the gures of tooling that is widely used and, moreover, that this model Du Pont with other denominations, has been used in economic theory.
3.2 The notion of a capital in the Austrian theory

Hayek was part of the so-called Austrian school of economy. Will see below what they meant by capital and for that try to outline briey the line genetic concept from Jevons, Bohm-Baweck, Wicksell and Hayek nally. Will attempt to show as authors like Jevons and Wicksell incorporated and used in its notion of capital in the Austrian theory of capital, the time variable, in the form of average of production period .
3.2.1 The background: W. S. Jevons and the average period of production. Jevons developed the theme of capital in his The Theory of Political Economy published in 1871 - with a second edition in 1879 - there presented his concept of the average period of production Austrian school then became famous. Capital dened as:
12. [41, pg.:11].Emphasis not on the rise.
18
Seccin 3
the set of commodities which are required to maintain maintenance workers of any class or kind committed to working13 practically dened as a wages fund but with the characteristic of not limiting it to one year. For Jevons the time between the start and end of an activity - understanding as to productive activity product realization - is supported by the capital. He considered this support function as intended:
...main but not only unique, of the capital...14 That is the word time constitutes signicant variable. Expressed two concepts that the Austrian school will maintain over use of its famous triangular schemes: the volume of invested capital (K), amount of a single dimension: capital. and the volume of investment (I): amount of two dimensions: the capital and time (t) which is applied during an activity specic.
The volume of invested capital (K) is expressed by the value of the ordinate of the function F (t) = K(t) = k t where K = k, in continuous K terms: t = k. The capital investment volume is determined by multiplying each increment of capital or investment for the period of time (ti) that this increase is invested:
i=n
K
i =1
ti = volume of capital investment
(1)
or when there is a ow reversal process, continuous or discrete, we have: K

i= n i =0 ti tn t0
K(t)dt
13. [26] 14. [26]
19
This gives a well-known example, that if you are building a machine and everyday work is done at a salary equivalent four dollars daily for one year will be: 4 364 + 4 363 + 4 362 + + 4 1 = 265,720 however, in which units are measured 265,720 , following Jevons, are lbs / day and are applying the above formula (1). It can represent the volume of capital investment in a diagram in which on the x-axis is timed to duration of investment and on the vertical axis K or volume amount of capital invested by time unit. If we have a function that represents the investment ow rate continuously F = K(t) the resulting surface area or under the curve F , measures the volume of investment during time t. The value of the ordinate at each sample point of the absisa the volume of capital (K ti) while the area under the curve shows the volume of investment. In the example, the volume of capital after 364 days is: 1456 equals the value of the ordinate of the straight by day 364 for 4 pounds daily investment. Indeed Jevons approaches the concept of numeral. the numeral is a category used to calculate average account balance current bank, credit cards, savings, checking accounts commercial, etc.., and is not nothing but the sum of the daily balances divided by the number of days. In our example, the numeral is:
tn
numeral N = I t =
t0
K(t) dt t
(2)
To determine the amount of investment, in your example, Jevons will employ the following methods, which give the same result. One is gives the detailed above 265,720 lbs / day, but this sum is equivalent to: surface=S=(base height) 2 = (364 4 364) 2=264,992 (3)
which is nothing else than the surface of the triangle formed by the union of the plane with the maximum time and the value of ordinate full time investment. The area of the triangle is equal to: 264,992, if we make the calculation of the denite integral of the line between 0 and 364 his is equal to: 264,991.99 . The discrepancy (265, 720 Vs 264, 992 ) between formulas (2) and (3) or the surface S of the triangle is the known dierence between the surface of the rectangles making up the called Riemann sum and the area under the curve or straight.
20
Seccin 3
Denitely try to calculate what Jevons (t 2) or period means of implementation of capital, which involves determining tacitly now called numeral or average capital applied for a period of time. The numeral, as noted above is the method employed by nancial institutions in America and Europe at least, to calculate average daily balances for a period of time, today. Both methods allow to obtain, given an interest rate, the same amount of interests, have a xed time and use the average capital of a lapse of time or use the middle period is the same for calculating interest. Well see how the building gets its famous period means. Taking the example gives the building a house, which the Jevons used, will have noted that if: W = total wages T = total time investment N = workers s = wage per worker s = Total daily wages = average investment period where: s=s N = K = I W =sT =K = W =sT 1 T 2 K W =s =I T T (4) (5) (6) (7)
If work continues for n +1 days:If work continues for n +1 days: s+s 2+s 3+ + s (n+1) = K In terms continuous the average period is deducted by:
Tn
s T dT = s
T0
1 T 2 2
(8)
Replacing in (8) by (7): KT 1 W T = = investment volume = VI 2 2 (9)
21
The total investment volume VI is constructed as the product total volume of the wages or ordered at the time Tn (or K) by "Middle period " or: 1 KT VI W T = =K = 2 2 W and:
VI W 2 T = W W
1 T = 2
(10)
We will see this more clearly following the example Blaug15 oers to address the issue 15 and see how you mix the concepts of average capital ) to total capital K. Suppose that in a single-sector economy are: (K =
VI W
= 2 t
where: N = system number of worker I = ow input = rate of investment per da y = N W w = daily wages =n K = capital = t t =0 Nt w T = Total time = k = average capital K then: I =N w K 2 T VI VI VI = = = = = T N w K I T T N w T N w =
1 2 1
(11)
T =
T N w
1 T 2
(12)
15. [7] Blaug, in his extraordinary book points out that the production period through K a single-sector economy can be expressed as: = I , where K is the amount of real capital, as shown by (4), (5) and (8/9) this is not so, this ratio is the production time which, in the examples is 2 .(pag.552-4).
22
Seccin 3
Consider a numerical example that will allow us to clarify what above: N : 60 workers w : 2 wage units T : Total investment period of 10 days by (11) and (12): VI VI VI = = I T T N w K 1 VI VI T 2= = 2 I N w (13)
1 T 2 (N w ) =VI 2
Substituting (13) for the values assigned in the example: VI = 2 102 (60 2) = 6000 Obviously this value of 6000 does not match what Jevons called volume of capital invested. Since this is the value of ordinate the last day of the investment period (in the example the 10th) or as he called the height of the triangle in the charts above, for Jevons is: K =t (N w ) Substituting the values of the previous example: 10 (60 2) = 1,200 That is, the value of the ordinate at t=10. We deepening do in this arid exercise since the peculiar nomenclature used by Jevons has led to some confusion. For example with the balance capital through, among others seem to Blaug, [7, p. 554] incurs this. Now we can write the basic equation model k 1 Bawerk to develop Wicksell: = 2 t = N w Bohm1
23
or k = 2 N w t. As a collection of physical elements, 1 capital is the cumulative result o f 2 N t man-years of work. the total value of work tied up in the stock of capital is precisely half the amount invested in the total product an investment period 16
= k = 600 ; ie average capital. Applying the example gets values K It is obvious that the equality indicated by Blaug, paragraph aforementioned, performed using the average capital value of which has to dierentiate the physical heritage and it is this form that Jevons applied. in the text quoted above, he says, wrongly: The total value of work tied up in the stock of capital is precisely the HALF of the amount invested in the total product of an investment period Clearly that is used in the passage quoted average capital and not capital Total employee. It is the rst concept, the average capital, which will used for determining the interest rate and put a system again the importance of the time factor in the Austrian model. Caracteristic shared with Marxist models and formula Du Pont as we shall see. But the total value of work tied up in the stock of capital (not half) is equal the value invested in a period investment. For Jevons the volume of capital is the total capital accumulated or integral investment rate. The average balance of capital, or capital environment, which today is used in the Most nancial institutions, used in the production time period or considered is: k= [(s1 t1) +(s2 t2) + i=n i =1 ti + (sn tn)]
Where: s = balance =n t = time i i =1 ti = T The middle period or average period, , can also be seen as the arithmetic mean of the period time considered17.
16. [7,pag.554]
24
Seccin 3
3.2.2 Analysis of K. Wicksell average period of production. We have analyzed how Jevons works implicitly with the average balance of capital, category, calculated in the same way, today is used to determine the interests of savings banks, cards credit, etc.., worldwide Western Financial. Well see Wicksells work and how it will discover what is now called Wicksell eects (real and price) and the problem of the reversal of the techniques. But most signicant of Swedish authors analysis, in the context of this thesis, is its capital concept and approach, in which the marginal productivity of capital is equal to the interest, so you can not sustain a distribution theory based on marginal productivities. Points out one aspect of the problem of capital, perhaps for the rst time: the problem of measurement units. When measured at capital amounts of exchange value performance - interest - is the species thus wages constitutes a pure number. Unlike the above, the relationship work or income f the earth, are heterogeneous quantities relations. Wicksell in product his analysis will use a production function Cobb and Douglas before. The form gives this function is as follows: F = F (A, B , l, r) = A l +B r Where: A: number entry workers B : Acreage l: wage per worker r : rent per acre
F B F A
(14)
It takes into account the timing of capital as follows: F = F (A, B , At , Bt , l, r, lt , rt)

F
F (A, B , l, r, t)
(15)
Where: A is partial derivative of the production function with respect t to the work of the year t: lt and so on. For the rst time highlights, and this fact has been generally neglected in theoretical work, there is a validity to the individual entrepreneur in a context of perfect competition is not maintained at a macro level18
17. In the above scenario we assume zero depreciation, and processes such as investment in a stream and product at a point.
25
This theory applies only to capital .... if seen from the point of view of the individual employer for whom wages and rents are market-dependent data. If we start from an increase (or perhaps decrease) of the total capital of the country, this will not be true if the corresponding increase (or decrease) of the social product is the governing interest rate19. This is to take care with aggregate production functions that are generally ignored, and is a point that has relevance in our analysis. But the big dierence with modern treatment of production function is the signicance that gives the time. Wicksell temporal stratication timely analyzes of capital structure, and linking the interest rate and income distribution. Lets follow the example he gives himself in words Wicksell this author methodology aims to: The method that we will expose the interest will emphasize the importance of the time element, which is really the core of the concept of capital 20 Wicksell taking a simple case in which factors production are used only once and then the product needs a period of storage, parking and or maturation, as given in forestry, viticulture, cheese production, etc., states the following. The function is capital, working capital, on a background of maintenance workers. If you know the total labor supply and the total supply of land the only variable dimension of capital will time .Assuming that: we have a closed economy, and occurs a single product, the wine, which are exchanged with other countries remaining goods, assuming it is determined by the market price parked wine, resulting in a time-dependent rate of aging (Pt) we have21: Pt = P0 t Pt = t P0 (16)
18. The emphasis is not on the original.It employs the same nomenclature that Wicksell. 19. [62. pag.133-4]. 20. [62.pag.134 ] el resaltado no est en el original. 21. The fact consider a single product is not exclusive to Wicksell, the Swan and Solow models that gave rise to intensive macro production functions added (and subsequent discussion from the work of J. Robinson) are functions of a single product - the meccano as Swan-still called in recent texts as the renowned Advanced Macroeconomics by Roemer or Economic Growth by Barro & Sala-i-Martin, used this type of functions.
26
Seccin 3
Supposed an annual production of one million hectoliters inputs being the only land and labor, and the price of wine P0 = wagest0 + rentt0; the Wickselsample values are: P0 = 67 P1 = 74 P2 = 81 P3 = 90 P4 = 100 P5 = 110 If we take the value of the must and multiply again by the rate of price growth, given the values of the example, we to sell a wine Vt =4, with four years of aging, it is necessary capital the following: V0 V1 V2 V3 V4 K = 67 [1.1050 + 1.1051 + 1.1052 + 1.1053] = 313.24 or what amounts to the same, for four periods: K4 = 67 (1.1054 - 1 ) 0.105 = 313.24 But after a year, the entire stock of wine will be aged (aged) and incorporates a class K5 , the total value of the stock will be: K5 = 67 (1.1055 - 1.105 ) 1.105 = 346.1327 The dierence between these two amounts (K5 - K4)E 32.89 E 33.0 represents annual accumulation (for fth year) of stock in units currency. It adds a utility or performance of 33 monetary units or what is the same: wine sales price then parked the fourth year wort year original price (100-67) = 33 monetary units. The dierence between these amounts, the 33 monetary units, is the annual remuneration of capital of 313.24 currency units. K4 67 (1.1054 - 1 )0.105=
99.89 67. 313.24 =0.10499 313.24 0.105
= 32.99
But if he enters another year of storage, fruit of the savings of the population, Wicksell shows that the interest rate falls and can give the following relationship: prot = PmgK r capital
27
capital = K = Km - Kn m = n + 1 In short: with his numerical example, which was followed verbatim as to the amounts, aims to highlight the importance of the time factor in the analysis of capital and not necessarily marginal productivity of capital coincides with the rate of interest, at the macro level. Essentially states that the theory of D. Ricardo on capital and prot is correct and criticizes Walras theory by losing sight of the time factor. In fact highlights the link between distribution of income and prot rate, thus: prot rate = prot income income social capital = P I I K (17) (18)
on this point, and continuing with the example of Wicksell, return later, specically on the period of rotation () or average period of production. Previously rst need to introduce other topics.
3.2.3 Wicksell to Hicks and capital measurement within the Austrian approach.
In the preface of Capital and Time Hicks says the evolution of his thinking from Value and Capital in which while applying a Walrasian method, it does on problems similar to those that Keynes sought to unravel. In Capital Growth basically tries claried himself approach possible modes of economic dynamics or time evolution of the variables of a model. for Directions in Capital and time to guide their thinking about measurement capital in the same approach, Hicks called neo Austrian. Hickss model is based on a key opposition: the dierence between capital and capital goods 22. This is a very important distinction in economic theory and has not resulted in very few confusions. In general neoclassical production functions work implicitly on the assumption of a single class of capital good in physical terms.
22. His distinction is not unique to Hicks and is the dominant mode of neoclassicals thinking.
28
Seccin 3
The controversy over capital theory in the words of Hicks is more about two dierent concepts of capital, according to this author, are useful in dierent contexts: the capital to see a list of capital goods or equipment and see the capital as an amount in monetary terms. The controversy appears from the fact, accepted from Wicksell who rst made explicit that the subject, that as soon as you leave the world of microeconomics of capital appears the problem in all its dimensions. In macroeconomics or global level requires a unique value capital through which to represent the acquis. Those who think that capital is a list of physical goods: capital goods, accept the need to homogenize a value only. And this is the root of the problem. In the words of Hicks [25;pags.158-159]: Whatever one might expect from physical goods is a list - so much of this that -; macroeconomics should be able to have aggregation. This is an obvious added in terms of value added ..... The capital must always be estimated in terms of something, money ..... If a concept as the reason product/capital, which is part of this approach, has to make sense, capital and output must be measured in the same terms The reason output or Q is the inverse of the rate capital turnover. But the solution beyond that accorded to capital measurement issues important thing is the perspective you look at the problem. Hicks, in a way that coincides with the continued focus in this work, says: The concept of production as a process over time, with capital ( accountant equity ) as the report is done in this on the state of the process, not specically Austrian. Is the same concept that underlies The Theory of the British classical economists, and is older still ... is the typical view of man business currently standpoint of accounting and formerly the viewpoint of traders ..... Can address a short period ... but of course, is impossible to deal with a sequence of such periods without reinstituting accounting discipline 23
23. The highlight certain words not in the original,[25;pags.21-22]
capital K
29
From the point of view of capital Hicks treated as accountant equity is the common view of the classical economists, Austrian and businessmen, this interpretation is consistent with the assumption made in this work. All three models: that of Marx, Von Hayek and model Du Pont, as we shall see, are characterized by accepting the unreliability of the measuring accountant, the accepted for its practicality and availability. In fact, companies around the world and whatever their size make decisions based on this type of capital measurement, as noted earlier.
3.3 Hayeks model on the Ricardo eect

Von Hayek published in London, in the February issue of 1942 Economic, an article entitled The eect of Ricardo and from which have emerged articles and comments Hicks, Kaldor, Haberler, Blaug and others. The same relates, essentially, on the thesis Ricardian competition between labor and machinery, as set forth in the famous Chapter XXXI of the Principles of Political Economy and Taxation . Hayek attempts to show that the Keynesian thesis that an increase in nal demand induces an elevation of the level of investment is not is valid, we will focus our discussion on this point but on methodological instruments employing Hayek, who is the subject relevant to this work 24. 3.3.1 Hayek Model Assumptions Hayek denes Ricardo eect as that proposition states that a general alteration of wages in relation to Prices of consumer goods, revised prot rates on capital in proportion to the dierent speeds of rotation capital. It will take the following as basic proposition: a general decline real wages relative to prices of consumer goods, rise over the rate of return on the capital of companies, proportionally higher speed have its capital. to lower (or raise) real wages should be interpreted from the point of view or companies from which the product has, from rising prices, a higher purchasing power.
24. Our comments are guided by the publication of the article as an appendix to [20] pages XVI Appendix IV and pages 390-422. Appointments are made all of this publication.
30
Seccin 3
The rise in prices is due to increased demand caused by increased consumption of rents collected ... in the production of capital goods [19,pags.303] The increased demand for consumer goods that exceeds level beyond which it is not easy to increase the production of consumer goods. Wages and interest rate of loanable funds market remain constant. The invariance of the price of loanable funds equivalent to assuming that ... no cash loans of any kind during the period in question .... The rates of return on capital are the same for all companies at baseline and in the long run. The restriction on the loan market is not only basic used to facilitate exposure, Hayek actually going to analyze the impact of imperfect credit markets in the model. We assume that there are no liabilities of any kind, whether it is simple to include and take into account the impact of dierent levels of leverage that companies can get, do not consider it to focus on the essentials. Hayek believes that Ricardo eect although ... is fundamental to the examination of the interest in the work of BohmBawerk, Wicksell, Mises, none of these authors develops some extension .. [19;pags.390]
Hayeks basic proposition is synthesized with the following expression: We have yet to introduce a measure that is clear, and uncontroversial as possible, in the proportions in which they combine capital and labor in dierent companies and in Dierent production methods. For our purposes, the most convenient, and it also has the advantage of being well-known businessmen, is the concept of turn rate applied to all or part of the capital of a company. ..... When it is remembered that the rotation rate expresses the number of times the total sales value exceeds capital of the company .[19;pags;394-395] From the above the basic variables are: m prot margin on sales (or the output)
31
t rate of rotation of capital or rotational speed or turnover i rate of return on equity

product-cost prot m= = producto product product t = equity i = prot product = prot = m t product equity equity
And builds a formula of the rate of prot on capital which is expressed as follows: i=mt (19) That is, the rate of return on capital is equal to the prot margin on the product (or sales in the course all that occurs sold) by the speed of rotation of equity. It should be noted that two aspects Hayek explicitly, t determines the number of times, whole or fractional, that capital or assets total result in sales during the period. We assume that the 1 unit of time is one year. Therefore the reciprocal of tor t 360 = n where n is the number of days it takes to rotate once the equity or the famous period average ( ). As the assets of a rm does not constitute a homogeneous whole, not all asset classes rotate at the same speed. This is easy to visualize taking stock of any company that inventories turn over fast production machines, etc. While analysis of Hayek performed by taking the equity as a quantity of monetary value such as mentioned above, can be expressed in units of company product: cm = average cost in product units p = unit price Q = physical quantity product K = capital in physical units Product C = monetary capital then:
(p Q) (cm Q) p cm cm mr = =Q =1 p = pQ pQ pQ pQ Q = = tr = pR R C ir = m t = Q R
32
Seccin 3
Considering the capital in terms of product25 recall that the Q inverse relationship R is another way of expressing the average period of production26: =
1
Q R
R . Q
Lets see how the model works pro-
posed by Hayek, we use dierent numbers for the purpose of highlighting some aspects in which Hayek does not stop. Taking four companies, a, b, c, d and data have monetary quantities sold, prices, costs and volume of capital means money employee is part of an initial situation in which there dierent values of m and t for each company except c and d having equal values but dierent product prices, as seen in Table 4. Hayek assuming that demand will increase for these products for the reason given in the course of increased consumer demand, will come to a nal situation in which rates of return on capital i, are dierent in rising industries in those with higher turnover rate to what is, less average period of production . Company A B C D Capital 1000 250 800 800 Sales 1000 500 2000 2000 Cost 900 476 1920 1920
Tabla 2. Initial situation
Hayek is a net increase in the selling price and sales of 5%, with no variability in cost or valuation of capital m 10% 5% 4% 4% t 1 2 2,5 2,5 i 10% 10% 10% 10%
Tabla 3. Initial rate of return on the capital

25. mr,tr , ir ; are expressed in terms of the product. 26. Consider the year (360 days) as the unit of measurement.
33
There are dierent returns on sales and capital speeds dierent, but equal rates of return on capital
Company A B C D
Capital 1000 250 800 800
Sales 1050 525 2100 2100
Cost 900 476 1920 1920
Tabla 4. Net increase of 5% in sales price
With the net change in price changes the value of sales remaining constant the rest m 14% 9% 9% 9% t 1.05 2.1 2.625 2.625 i 15% 20% 22% 22%
Tabla 5. Final rate of return on the capital
3.3.2 Conclusion on Hayek model It makes the goal of this paper the description of the eect Ricardo 27 we highlight the model, what their variables, their conditions assumed for purposes of comparison with the known formula then Du Pont and analysis of Marx and try to prove that are structurally the same. Yes it is important to note that in building the model,Hayek, is based on : 1. The concept of rate of rotation - t - noting that it has the advantage of being well-known businessmen [19, p.: 394]. It is important to emphasize that Hayek, like Hicks, is fully aware that this category applies and knows in business.
27. In [43] is analyzed and described the Ricardo eect and its operation.
34
Seccin 4
2. Considers the protability or sales margin m is dierent from the return on capital i, which is the key issue since the models matching rate of return on sales the rate of return on capital directly exclude the impact of time to analyze problems. The excluded because the rates match no sense to speak of rotation. Furthermore, equalization implies that soften or disappear the dierent composition of capital structures28. This is not an issue lower by 1972 Monza Alberto stated: Instead of conceiving the idea production function in a historical context, it began to be used in one timeless instant or [39, p.: 22]. 3. His notion of rate of rotation as a signicant variable continues the focus of Ricardo, Jevons and Wicksell.
4 The rate of prot in Marx

Before digging into the construction of the determination of the rate of prot that Marx uses in Book III of Capital , see David Ricardo analysis on the subject. Ricardo makes his soliciting on capital and protability highlighting the variable rotation.
4.1 Background: David Ricardo.

David Ricardo tried to set the economy and basic problem as the determination of the laws governing product distribution between dierent social classes, linked to the rate overall benet of the economy with the distribution and thus the value capital with that. Without entering into the debate about the value of this hypothesis, it is necessary to expose the role that Ricardo gives the time and their relationship with capital.
28. In the best case is considered a capital turnover rate equal to 1.
The rate of profit in Marx
35
Ricardo expressly raised, perhaps for the rst time, the problem of capital measurement. The Essay on prots of 1815 to analyze the determination of the rate of prot and relation to the accumulation of capital defending the thesis that the rate of prot will decline if there progress in agriculture. One of the methodological decisions taken Ricardo, Sraa and will stand out in his comments on the complete works of this author, is the tacit assumption that the input and output of agriculture are physically identical 29. As noted Cartelier [12, p.: 242]: Ricardos conception, based on the idea that the cost production .... is the basis of price, it only makes sense if the cost of production of wheat is determinable independently of the price of the goods .... In short, Ricardo develops propositions in the Essay on PROFIT require the assumption of homogeneity of inputs and outputs The problem posed by Ricardo on capital measurement in the 60 nd 70 of the nineteenth century and generated reappeared called capital controversy or both Cambridge. The subjects consisted of basic theoretical discussion on the possibility of achieving a unit separate capital and distribution prices at the aggregate level or production of macro function. Ricardos analysis of Sections III, IV and V of chapter On the value of the Principles incorporates the impact of time30 but holding the principle that relative prices are independent of income distribution. The tool tries to use is that of "dating" tacitly work, especially in section IV, and transform the capital into homogeneous units of work originated in dierent time. Which is going to take note Cartelier following: ...another way to say the same is to emphasize that everything happens as if the date of the expenditure of labor did play a paper the side of the your quantity ... (if the quantities of labor remain constant and only its temporal distribution changes) ... The importance of this phenomenon, sometimes called today days Ricardo eect is the greater in that the process of capital accumulation progresses ...31.
29. Wicksell model discussed earlier about wines from dierent years is metodolgicamente equal to the raise of Ricardo in the Essay . 30. As pointed out by Pasinetti referring to Ricardo and Principles : All exceptions - as explained later in a letter - re reduced to one, which refers to the time .[44, p. 15-16]
36
Seccin 4
In the rst edition of the Principles chapter On the value presents the subject in a clearer manner, within the framework of this work, and mark how the general principle of independence of relative prices relative to capital structure presents exceptions. If between xed and circulating capital dierent proportions exist, or if the xed capital had a dierent duration, the relative value of goods produced would be altered as a result of increased wages. The example he adds 32, after the text referred to in the above quote, to prove what they say is: comparing the hunter and sherman and while the hunter has a capital structure such that xed capital formation (FC ) is pounds L150 and the capital circulating (CV ) of L 50 a sherman presents FC L50 and CV L150, prices determined based on a 10% prot on total capital. The calculations used to show that Ricardo hunter must sell assets in pounds L79 and 8s, while the sherman must sell L173 pounds and 7d 2s are not shown and only highlights the result. We will make explicit tar calculations, because the way to make them is linked to the issue we are trying to clarify and are illustrative of the impact of dierent rotation periods. Employ for this purpose the measurement system sterling, which is obviously the employee by Ricardo, that Newton, whenever the Director of House of the Currency of England, designed and which is based on the following conversions: 1L = 20 s 1s = 12d the previous relationship between pounds, shillings and pennies transform it in the following example, in decimal. Except this transformation it does not aect the result, as it is a change of scale, the numbers are used by Ricardo. Take the concept of annuities and present value of it explicitly in his example, consider the following example built with the data given in the 1st. edition of the "Principles" of 1817. First raises the capital structure for the hunter and sherman
31. The Ricardo Eect as Hayek so renamed it, is one of the thematic our main focus on the rate of prot, and we agreed to link their way (of Cartelier) to issue temporary capital. 32. In the rst edition, the third this example is not found.
37
sector FC hunter 150 sherman 50
CV 50 150
price prot L79 s8 10% L173 s2 d7 10%
Tabla 6. capital structure
To interpret the justication for these prices [Table 2] and the following is important to note that Ricardo calculates compensation circulating capital with direct rate of 10% per year (5 and 15 respectively) but the remuneration of the xed capital obtained by applying: The hunter .... To replace your capital with 10% xed prot, the present value of an annuity of L24.4 at 10% per annum for ten years will be to 150 lbs ................................. L 24.42
Now, as it integrates the current value of the annuities used by Ricardo for compensation of xed capital of the hunter and the sherman?
hunter year FC interest amortization annuities 0 150 0 0 0 15 9.4116 24.4116 1 140.5884 sherman 0 1 50 46.8627 0 5 0 3.1372 0 8.1372
Tabla 7. Annuities to 10%
38
Seccin 4
The interest component in the value of the respective Annuities in year zero, L24.4 and L13.8 , respectively, in addition to the replacements of CV (50 and 150 respectively) over the relevant interest needed to form prices in each sector. From here applies the same criterion, that Hayek later used in his article, noting that: ... if wages increase, will alter the relative value of the property, although none of them requires more work for production ... . What if these values, we apply the same method to the problem of the transformation of values into prices of production? We apply the analysis scheme C. Marx made the show the relationship between values and prices of production in the transformation problem. sector hunter sherman total FC 150 50 200 CV prot amortization cost price 50 20 9.4116 59.4116 79.4116 150 20 3.1372 153.1372 173.1372 200 40 12.5488 212.5488 252.5488
Tabla 8. Ricardos problem according to the scheme of Marx
The table above displays the price structure implemented by D. Ricardo. El component amortization is key, without that amount does not integrate the Ricardian example price, but also does not employ the full amount of the annuity. Here is the price as a decimal, we will for L79 s79 , d8 out of 20 shillings make one pound thus constitute 0.4 in decimal form: L79.4116 E L79 s8 Now and raised the price diers of labor value. If we apply the criterion of Marx has global totals of price and value, must be equal, plus valor and values are determined. For the determination of surplus value, L40 or prot system, are distributed in proportion to the CV , with the hypothesis of equal value plus rate for all sectors. See table below. sector hunter sherman total FC 150 50 200 CV value plus amortization cost value 50 10 9.4116 59.4116 69.4116 150 30 3.1372 153.1372 183.1372 200 40 12.5488 212.5488 252.5488
Tabla 9. Example values
39
Place column amortization the value of depreciation of the share capital for the perpetuity [see Table 7], is curious but in this example of the rst edition of the Principles all hypotheses are veried that Marx analyzed in his famous chapter on the transformation of values into prices of produccin. In Marxian terms the amounts of the products of hunting and shing that determines Ricardo: L79.4 and L173.13 respectively are producer prices and values are: pounds L69.4116 and L183.1372 respectively33. In this example from the rst edition of the Principles we emphasize that: as Marx pointed out on several occasions, but does not prove, Ricardo uses values and prices of production. As exemplied in the preceding tables made with data from the example of the rst edition of the Principles. that there is a temporal distribution of capital strongly marked CV and evidenced by the ratio FC . in the sectors, there is a dierent rate of rotation of capital: 0.397 and 0.866 in the hunter and sherman, respectively .
The above points put us in the context of the transformation problem and allow us to state that the issue is already implicit Ricardo, as evidenced by the previous example and as Marx pointed out without proof. We will leave in this instance, momentarily, the development of this example and, like the previous Wicksell, deepen it by applying the model of the Ricardo eect later.
4.2 Capital and time in Karl Marx
33. The fact that Ricardos example, of the rst edition, applies the model used by Marx in the transformation problem and is evidenced in the course prices and values ??are dierent, we know that has arisen prior to this work.
40
Seccin 4
In Book II of Capital, rst published in 1885, Marx will perform a careful analysis of the circuit of money capital ,in other words, the turnover time and number of turnovers of capital. And anticipating in decades to works management nancial, to study the eect of rotation time investment in capital-money or more precisely: cash requirements that are determined by the magnitude of the turnover time or type of business cycle in question. this aspect leads to recognition Blaug, who notes commenting on the Marxian analysis of capital turnover in Book II: The facts of the time consuming nature of the production process have never been better described, even by BohmBawerk . [7, p.: 305] In Chapter VII of Book II entitled The turnover time and number of turnovers, considers and denes the total turnover time as the period of time it takes the process D M D , making it clear that the year as a unit of measure logic to quantify the number of rotations. Marx explains the cycle D M D = D + D commenting three phases: 1. its company appears on the market as a buyer, investing their funds in the purchase of goods, starting with the existence capital money or D. 2. the production process or create a value added to the company internal process, which consists of the use of production time, M generator. 3. the company returns to the market as a seller and you need to convert its products into cash to restart the cycle. Turn your products into money within a period of time called the circulation time, which makes the appropriation of value added produced in (2), in the form of D = D + D One paragraph more clear as to how to calculate the rotation and that is particularly important in the context of this work is in Chapter IX The aggregate turnover of the capital advanced. Cycles of turnover. Here then is taken to explain why the cycle D D and give a series of examples will point: On the way to calculate the turnovers, give the word to a American economist [34, p.: 165]
41
To mention later a extensive paragraph of Principles of Political Economy of Poulet Scrope 34, the shape of this author to arrive at the rotation of 16 months is linking annual sales and capital total 35.In Chapter XVI, the same volume II, introduces the fact that the annual rate of surplus is equal to the quota of rotation or cycle multiplied by the number of rotations in the year. After noting:
Economists tell us that there never unclear about the mechanism of rotation, pass continually ignore this fundamental factor, namely the production process actually can only absorb a portion of the capital industrial.[34;pag:237] This refers to the need to consider time of production+time of circulating or marketing. In Chapter XVI The turnover of variable capital. Showing numerical example dening the rotation like the ratio of annual output and the value of the capital advanced, [34, page. :262-263]. Really the capital advanced is a ow concept and refers to the capital investment made in the period (the annual expenditure of Scrope cited) and not the stock of capital. Marx considered the annual cost price equal to capital expenditures constant and variable capital, like the amount related to the total capital.
34. by Google is consige Longmans English edition. This is collated with the above in E L CAPITAL. Marx cites rigor Potter book Political Economy: its Objects, Uses, and Principles , New York, 1841. It appears that much of this work is essentially a slightly modied reprint of the rst ten chapters of Scrope Principles of Political Economy , published in England in 1833. On the other hand Scrope was English and not American. 35. In his book Poulet Scrope; [ 1943: 156-159]. take annual expenditure + prot capital = annual sales and it is this latter concept that divides the total capital: annual sales 12 = month rotation. And it is this latter concept that divides the total capital-month rotation give 16 and 9 months respectively for rotation thereby. According to the edition made by Siglo XXI of Capital: In Werke and TI this includes the following note: In the manuscript, Marx points out that this way of calculating the rotation time capital is false. The average time of rotation shown on the appointment (16 months) has been calculated taking into account a gain of 7 1/2% on the total capital of 50,000 dollars. Regardless of prot, turnover time of this capital amounts to 18 months.. A Marx gives 18 months because rotation calculated based on the cost price instead of using annual capital sales: cost price 12 =month rotation.
42
Seccin 4
The capital is dened like value that includes both capital constant as the variable. Marx after studying the process of circulation of capital in Book II, Volume III appeared in 1894, and in reality like the Volume II, compiled from drafts by F. Engels, proceedings opened to research the.... The various forms of capital, as evolved in this book, thus approach step by step the form which they assume on the surface of society, in the action of dierent capitals upon one another, in competition, and in the ordinary consciousness of the agents of production themselves .[35;pags:45] 36 Is important the point of view adopted of: ... habitual consciousness of the agents of production , which coincides with the selected and emphasized by Hayek and Hicks, of seeking common categories of analysis to businessmen. Marx introduces the category of quota prot in the following terms: The rate of surplus-value measured against the variable capital is called rate of surplus-value. The rate of surplusvalue measured against the total capital is called rate of prot. These are two dierent measurements of the same entity, and owing to the dierence of the two standards of measurement they express dierent proportions or relations of this entity.... The transformation of surplus-value into prot must be deduced from the transformation of the rate of surplus-value into the rate of prot, not vice versa. And in fact it was rate of prot which was the historical point of departure. Surplus-value and rate of surplusvalue are, relatively, the invisible and unknown essence that wants investigating, while rate of prot and therefore the appearance of surplus-value in the form of prot are revealed on the surface of the phenomenon [35;pags.,58] In the third book of Capital, presents his formula of the rate of prot or quote of prot from the surplus value p, or simply for the prot, as follows: p p (20) g = = C CC + CV
36. The highlight is not in the original.
43
Where: g prot rate p value plus C total capital CC constant capital CV variable capital But then the above expression, indicates two aspects that inuence the formula: a) the value of money that must be assumed constant, b) turnover, noting that the above formula only... ...is strictly correct only for one period of turnover of the variable capita l.[35, p.: 65] In the Grundrisse also explains its way to analyze the capital turnover and its impact on the process. Very clearly exposes each cycle of reproduction of capital is equal to a rotation:
The number of reproductions is = to the number of turnover. So the plus-value total = p n R 37 [36, p.: 187] To continue with a clear numerical example which calculates the rate of turnover or n, as Marx called dividing the annual product by total capital. [36, p. :243-254] In Chapter IV of Book III of E L C APITAL, analyzes the impact of rotation on the rate of prot and gives examples on pages 86-87, which begins in calculating the rate of return on the invested capital and arrives at a formulation follows: g = p n Where:
37. R is rotation, are respected the symbols the text quoted.
V C
(21)
44
Seccin 4
p surplus of a rotation n annual number of rotations P annual surplus P = p n C total capital V annual variable capital g prot g prot rate =
i=n i =1
pi
P C
i=rotations
k variable capital cycle p surplus of a rotation = k

p P
P annual rate of surplus value = C Replacing in (21): g =

p k
kn V pn P = = V C C C
(22)
That is: surplus value of a cycle,p, multiplied by the annual number of turns in the cycle ,n, divided by total capital,C ; is equal to the annual P rate of return on capital, C . This going to allow you to emphasize that equal terms the prot rate of two capitals : the rates of prot of the two capitals are related inversely as their periods of turnover .: adding: The amount of variable capital invested in his business is something the capitalist himself does not know in most cases. We have seen in Chapter VIII of Book II, and shall see further along, that the only essential distinction within his capital which impresses itself upon the capitalist is that of xed and circulating capital .[35, p.: 88] After the foregoing uses, returning to it, an example of a textile plant with 10,000 spindles Mule. This example is developed in the rst volume of Capital and assumed that the gures given for one week of
45
april 1871 are valid for every week of the year (raises a stationary state). This development is at the end of the symbol FE, which is likely that the author is Engels, in any case is the interpretation of Engels on the rate of prot and this is signicant for our hypothesis. Beyond this particular will reproduce this example because shows the determination of the rate of prot, as Marx understood it, and expose the same result by reaching our author, otherwise. It can be seen in Table 10 , built by example and numbers used by Marx, that the prot rate per cycle multiplied by the number of turns gives the total capital in the year determines the annual prot rate equal to 33.28% (33.27% Marx placed a calculation and 33.28% with the mode used here, indicating the dierence below). The key is what specically says: p n = P p n = P (23)
Where P is the annual quantity of surplus value in Table 10 this is 4160 = 80 surplus value of a period 52 cycles. Take the example of Marx:
weekly product C amortization CC per cycle CV 12.500 20 358 52
Surplus 80
Product 510
12.500
Year 52 weeks - Annual values 1.040 18.616 2.704 4.160 prot per cycle Cycle product 510 Rotation
product C
26.520
Cycle prot 80 Prot on the product

P product
Prot rate cycle 0.1568 Annual rate of prot on capital

P C
= 26.520
4.160
= 12.500
26.520
= 12.500 0.3328
4.160
0.1568627
2.1216
Tabla 10. Example of Marx, cap.IV of Volume III
46
Seccin 4
On the basis of preceding example is understood, therefore, that (23) can be expressed as: P V = g V C P = g C prot cycle n = g product cycle g = annual prot rate In: V C = g , the rst term is the annual rate of surplus value and second rotation number gives the total capital in the period annually V through V . The expression C Marx once used at least to indicate the so-called organic composition of capital, but also indicates turnover. Clearly, the annual mass surplus value equals the the annual mass of prot at the macro level, but in spite of the emphasis our author gives this point, this equality of masses of surplus value and prot, Marx emphasizes again and again, is not respected by either Borkiewitz or others known attempted solution to the problem of transformation. Marx noted above will say that the mass of surplus value measured by the variable capital is the rate of surplus value and measure the mass of surplus value by the total capital, is the rate of prot. The mass of surplus value coincides with the prot, at company level and or sector, in terms of values but do not production prices, but globally in a closed economic system mass aggregate surplus value must be equal to the mass of prot aggregate to the same period of time:
P V
n = number of cycles in the year p = a cycle surplus value g = annual prot t = n pt =P = g t =1
Chapter VIII of the third book will reiterate, leaving well clear, the incidence of dierent rotations of capital [35, p.: 158].
47
We demonstrated in the preceding chapter that, assuming the rate of surplus-value to be constant, the rate of prot obtaining for a given capital may rise or fall in consequence of circumstances which raise or lower the value of one or the other portion of constant capital, and so aect the proportion between the variable and constant components of capital. We further observed that circumstances which prolong or reduce the time of turnover of an individual capital may similarly inuence the rate of prot. Since the mass of the prot is identical with the mass of the surplus-value, and with the surplus-value itself, it was also seen that the mass of the prot - as distinct from the rate of prot - is not aected by the aforementioned uctuations of value....Aside from dierences in the organic composition of capitals, and therefore aside from the dierent masses of labour - and consequently- other circumstances remaining the same, from dierent masses of surplus-labour set in motion by capitals of the same magnitude in dierent spheres of production, there is yet another source of inequality in rates of prot. This is the dierent period of turnover of capital in dierent spheres of production. We have seen in Chapter IV that, other conditions being equal, the rates of prot of capitals of the same organic composition are inversely proportional to their periods of turnover . We have also seen that the same variable capital turned over in dierent periods of time produces dierent quantities of annual surplus-value. The dierence in the periods of turnover is therefore another reason why capitals of equal magnitude in dierent spheres of production do not produce equal prots in equal periods, and why, consequently, the rates of prot in these different spheres die r.
You can see, in the following example -Table 11 - also extracted from Marx, that the prot rate per cycle multiplied by the number of turns gives the total capital in the year, determines the annual prot rate, which is the same for all three companies, despite the dierent capital
48
Seccin 4
structure. The data is taken from pages 86-87 of Volume III. company I II III xed capital 10000 9000 0 variable capital 500 1000 5000 cc advance 500 1000 6000 product per cycle x 1600 3200 16000 total capital 11000 11000 11000 cv 500 1000 5000 annual product D 16000 32000 16000
company amortization (d) I 100 II 200 III 0 surplus p 500 1000 5000 Turnover
I II III
I II III
rate annual per cycle prot rate D p =T =g T g = g d + cc + cv + p total capital 1.454545 0.3125 0.4545 1.454545 0.3125 0.4545 1.454545 0.3125 0.4545
Tabla 11. with data from Marx
The prot rate is the same for our author arrives 45.45% and the formulation in this example, which rigorously follows the method of Scrope, is:
49
g =
i=t i =1 i=t
pi (di + cci + cvi + pi)
i=t i =1
(di + cci + cvi + pi) T = i =1 total capital annual rate of prot = g = g T
What is interesting in this example is that Marx assumed that variable capital turns are dierent: Company I II III turnovers per year of the variable capital 10 5 1
Whereupon also be expressed Table 7 with the formula38: n CV = g if p = 1, 00 C (24)
Where C is total capital, and the rate of surplus is 100%. Company I II III n C 10 0,04545 5 0,09090 1 0,45454
CV
n C 45.45% 45.45% 45.45%
CV
38. The quantity of surplus-value appropriated in one year is therefore equal to the quantity of surplus-value appropriated in one turnover of the variable capital multiplied by the number of such turnovers per year. Suppose we call the surplus-value, or prot, appropriated in one year S, the surplus-value appropriated in one period of turnover s, the number of turnovers of the variable capital in one year n, then S = sn, and the annual rate of surplus-value S = s, as already demonstrated in Book II, Chapter XVI, I. [English edition: Vol. II, p. 305.Ed.][35;pag. 88]
50
Seccin 5
4.3 Some conclusions on the model of Marx of rate of prot.

After the brief presentation on the development of the rate of prot on capital in Marx, in which we were interested only highlight the impact of turnover, is clearly stated that it is a function of the number of turnovers that the total capital expressed in annual production. In the numerical examples we tried, from the numerical examples taken from the text of Marx, and highlight the variable aects turnover. Employing in the style of Scrope, a variable of the type of margin on the product annually.
5 Comparative of formulations.
We begin by comparing the three models: model Du Pont, the employee by Hayek and Marx used in to analyze the rate of prot in Volume III of Capital. Then apply the analysis of the example given by Wicksell with wines, and the example of the sherman and hunter Ricardo described above, the transformation problem. analyze whether the three formulations allow conclusions or identical or dierent interpretations of the results.
5.1 Comparative
We will build a table with the three models used, analyzing variables employed therein and comparing their denitions. Names used are employed and explained above. Before presenting the comparative table must remember some characteristics of the technical vocabulary of Marx. On Marxs terminology dierent interpretations, as an example, let us see what says M. Blaug:
Comparative of formulations.
51
Since most of the marxian economics thrives ina cloud of terminological confusion, the rt step is to agree on a set of denitions... we will consistently use capital letters for stocks and lowercase letters for ows. Marxs constant capital, c, is denied as the sum of depretiation charges on xed capital and inputs of raw materials. Adding the wages of production workers v, Marxs variable capital, we get the ow of total capital outlays,k...The gross national product =c+v+s but the net national product = v+s. The rate of surplus value p =s/v. The rate of prot,g , as Marx denet it, is equal to s/ k ; on stock basis it is equal to s/C.[7;pags:250-251] In the above quote from Blaug, not explained that k is the rate of S prot of a one turnover and C is the annual prot rate, where if n =n is the number of turnovers per year then: S = i i =1 si , and C is total stock of capital. Blaug trying to clarify the terminology does not clarify the dierences between the prot rate of one turnover, and the annual prot rate. Fundamental and basic dierence in Marx, such as we try to show previously. variables annual rate of prot margin of turnover
i=n i =1
Marx g
i=n i =1
Hayek i m=
prot sales
Du Pont roe ros
(di + ci + vi)
turnovers
Tm =
i=n i =1
(di + ci + vi) C
t = capital
sales
ato
Formulation
g = Tm
i=n i =1
(di + ci + vi) i = m t roe=ros ato C
Tabla 12. Comparatives
The dierent formulations show and try to achieve the same result, and are based on similar key assumptions: 1. consider a cycle like: D M D = D + D
52
Seccin 5
2. considering that each stage is consumer of time. Cycle is a process in time with its peculiar history. The cycle duration is measured taking as a unit of measurement the year, and is specied as number of annual turnovers. 3. They believe that the protability of each rotation is not the same as annual prot rate. The annual prot rate is determined by the surplus of each rotation and the number of them. 4. They believe that capital is reproduced in the year in proportion to total annual output or sales and prots. 5. Capital measured as capital money or valued monetarily. Needless to say in the formulation of Marx, presented above, he con=n siders the assumption that i i =1 pi = P annual prots= G, at company level, this will abandon the hypothesis by presenting the transformation of values in production prices using, in the level of prices of production, replacing the corporate surplus value. But noting that the economic system, closed system, the sum of the surplus values must equal the sum of the prots. Furthermore, their comments from the work of Scrope who takes as reference to calculate turnover as stated: On the way to calculate the turnovers, an American economist states [34] Scrope uses the following example: In some trades the whole capital embarked is turned or circulated several times within the year. In others a part is turned oftener than once a year, another part less often. It is the average period which his entire capital takes in passing through his hands, or making one revolution, from which a capitalist must calculate his prots. Suppose for example that a person engaged in a particular business has one half of his capital invested in buildings and machinery; so as to be turned only once in ten years; that onefourth more, the cost of his tools, etc., is turned once in two years; and the remaining fourth, employed in paying wages and purchasing material, is turned twice in one year. Say that his entire capital is $50,000. Then his annual expenditure will b e[34; pags.165-67]
53
Marx employs the numbers of the edition of Alonzo Potter39, will compare them with the original of Scrope, to show the mean term, in time, in which his capital is turned: variables capital amortization buildings tools wages and raw materials annual expenditures prots on his capital 7.5% annual sales time of turnover for Marx time of turnover for Scrope Potter 50000 25000 = 2500 10
12500 2
= 6250 25000 33750 3750 37500 12 = 18 12 = 16
2500 2
Scrope 10000 5000 = 500 10 = 1250 5000 6750 750 7500
50000 33750 50000 37500
10000 12=18 6750 10000 12 = 16 7500
Marx, as we noted above, cites these examples and the explanatory text as a way to calculate rotation rate of annual total capital. The method for calculating the spin time by Scrope, the text dates from 1853 40, is one of the rst written record of he later named Du Pont formula and model of Hayek, however, as anticipated, Marx, we made a review. Criticism which appears as a note or write down your drafts manuscript of Volume II, refers to a corresponding turnover time of 16 months, taking the annual expenditure . Instead of annual sales considered by Scrope. If the calculation is made on the cost price, or annual expenditure ,is: capital total 12 month = time of turnover annual expenditure substituting in the above expression: 10000 12 = 17.77 E 18 month 6750
39. The numbers of Potter are extracted from Marx [34;165-167]. The numbers of Scrope of Principles of Political Economy ,pags 150-152 in http://books.google.com.ar/books. 40. This Scrope written casts doubt on the paternity of Du Pont formula.
(25)
54
Seccin 5
which is the amount of time of rotation considers valid as Scrope correction. That is why it seems convenient to consider the formula Marx employs in his examples of Volume II and Volume III as:
amortization of a rotation = d tools and raw material of a rotation = c wages of a rotation =v numbers of turnovers per years = n =n annual expenditures = i i =1 (di + ci + vi) = E annual prot = G capital total = C annual rate of prot = g E capital total 1
m
= Tm T 12 = time of turnover of capital in moth=T
then: E G annual prot = = g capital total C E (26)
Rotation Tm, as calculated by Marx, is lower than in the two other formulations, but the end result obviously gives the same rate of prot on capital , as compared with the expressions of Hayek and Du Pont, and which is compensated by a greater margin over cost. The method of applying to the numerical examples employed by Marx and others cited here the dierent formulations which to visualize the result is the same.
5.2 Application of the formulas compared

Numerical examples employees above show than any of the three expressions of the comparison chart, you get the same result but try to show more clearly this point solving examples given by these authors. We will apply the model of prot rate, to elucidate the above problem proposed by Wicksell of wines already mentioned; the problem Ricardo of hunter and sherman; the problem of machinery the famous Chapter XXXI of the Principles and nally by example numerical used to explain the transformation of values into prices production by Marx. The formulas or expressions that employ are expressed in Table Comparison of the previous point,[table 8 and formula (26)].
55
5.2.1 Wicksells problem and the rate of prot. The problem of Wicksell wines, which has already been described and was made a number of comments, has a historical importance. With the same arises for the rst time what was later known as the Wicksell eect . Joan Robinson noted that the eect of Wicksell and the problem of the reversal of the techniques associated with the referred eect, are the key to the whole theory of the accumulation of capital , a term, however, the match will not Blaug [7, p.: 609]. Allen also in Mathematical analysis for economists used for this problem determining the optimal period of maturation of the wine, as an illustration of the derivation of logarithmic and exponential functions. Referrals uses this example are sucient to indicate the theoretical importance of the same. The problem we are going to to submit in the amounts employed by Wicksell, but using another method of solution: the model of the rate of prot in the comparative expressed formulations. We want to see if we get another path to the same result. If we remember the wine problem which started from a wort of 67 currency units equals the cost of labor and a selling price of 100 already stationed, we had:
P4 = 100 P3 = 100 1.1051 = 90.4977 E 90 P2 = 100 1.1052 = 81.89 P1 = 100 1.1053 = 74.11 P = 100 1.1054 = 67.0735 0
In words of Wicksell: Apart from the supply of cash to eects transactions and certain other requisites, the circulating capital of the community...consist entirely of the stored wine of four successive vintages . Consequently, its money value at the beginning of each year of account.....is 1.1054 1 K4 = 67 = 313.242 E 313 0.105 K5 = 67 1.1055 1.105 = 346.133 E 346 0.105
56
Seccin 5
Where:
K5 K4 = 33 prot of the year is the same of selling price less cost of wages (100-67). Where applying the model of rate of prot with rotation gives the same rate of return that Wicksell.
33 m = 100 = .33 100 t = 313 = .319489 g = m t = 0.33 0.319489 = 0.105431 E 0.105
Since then, the prot rate of 10.5%, g , the same result that reaches Wicksell and we stated already, but using the formulation M-H-DP. There are some aspects worth noting: 1. 33% is the share of prots in the annual product, thereby one can say that the rate of prot on capital (10.5%), macro level, is determined by the distribution of income and the speed of rotation of the Capital41 2. It shows that the speed of rotation of capital (31.9152%) not determined by their chronological age, but by the conversion of capital in annual product cycle or temporal duration D annual output M D . That is by capital total , regardless of when it has been applied capital. 3. The turning speed rate tells us the annual product is equal or played back to 31.9152% of the total capital, or it takes to 3.13 years in reproduce total capital.
When Wicksell in his example incorporates another stage of maturation, the wine of another year, if we replace by the quantity that our author uses also got the same result:
41. This is what will Sraa noted in the following terms: can not be reconciled with any notion of capital as a measurable quantity independent of distribution and prices [57, p.: 63]
110 70 110
57
422 = 0.09478 E 0.0955 0.105

110
exercise is left to the reader. These are the same results that comes Wicksell and are consistent in showing that increased social capital decreases the rate of prot, caeteribus paribus . The prot rate model used by Marx-Hayek-Du Pont giving the same result as Wicksell expressed in his book, by placing in relief other issues such as capital turnover.
5.2.2 The problem of Ricardo and the issue of machinery
In the chapter XXXI of the Principles ..., in the 3rd. edition, Ricardo will ask what later became known as the problem of machinery. Ricardo says, contrary to his initial opinion on the subject, the emergency often of a conict of interest as a result of mechanization, which is detrimental to the job: ...but I am convinced, that the substitution of machinery for human labour, is often very injurious for the interests of the class of labourers [63,pags 289] This issue is closely linked with the Ricardo eect, and see how the formulation of the rate of prot MH-DP has explanatory capacity thereof. The question posed by Ricardo in this chapter of the Principles is such that it has led to Pasinetti noted: In fact, the chapter On Machinery has confused always at Ricardo readers....[Pasinetti MODEL] shown that Ricardos model is valid on the assumption of a uniform composition of capital throughout the economy "[45, pg.: 34] Ricardo begins by noting an initial situation in which a capitalist employs L20.000 monetary capital, with a xed capital L7.000, and L13000 constitute the remaining capital allocated to wages, prots are 10%. In a second year dedicates 50% of its capital to normal activity and 50% to build a machine that the same used in the third period by
58
Seccin 5
substituting work. Obviously, in the second year or cycle is unchanged labor demand, L13000, but that happens in the third cycle? Here is a chart with the numbers of Ricardo.
sector I-year 1 Ia-year 2 Ib-year 2 total year 2
xed c. cc c.total cost prot price 7000 13000 20000 13000 2000 15000 3500 3500 7000 6500 10000 6500 1000 7500 6500 10000 6500 1000 7500 13000 20000 13000 2000 15000 5500 20000 5500 2000 7500
total year 3 14500
Tabla 13. On machinary
You can see, the numbers following the example of Ricardo, that while, in their terms, the net product remains the same, is reduced in year 3 the gross product and therefore the mass of funds (circulating capital in the example) intended to wages. The mass of funds to wages for the third year is reduced, not only in the amount of wages applied for investment in the construction of the machine but also in the substitution of unrealized prots. As the entrepreneur needs L2.000 their utility, but only has L1.000 liquid, since the machine has built unrealized prots, rolls back these funds the stock of circulant capital of which decreases by the same amount. As this example is for a single sector and the prot rate of the system is unchanged, this implies that, in terms of the model Du Pont-MarxHayek and using the nomenclature of Hayek, then we have: sector m
prots output
t
output capital
i mt 0.1 0.1 0.1
Rotation days
1 t
365
year 1 0.1333 0.75 total year 2 0.1333 0.75 total year 3 0.2666 0.375
486.66 486.66 973.33
59
It can be seen that although the rate of prot on equity are unchanged, are 10% continuously, changing the turnover of capital extending the rotation cycle and reducing the wage bill increasing the share of prots in the annual product. If we applied the approach of Marx, noting that Ricardos example ignores depreciation and is equivalent to a closed economy in which the sum of the values is equal to the sum of the prices of production and the sum of the prots equals the sum of the surplus values, the rate of surplus value increases and decreases capital turnover:
p1 =
2000 2000 = 0.1538 p2 = = 0.3636 5500 13000
This is consistent with what purport to address Ricardo. On the one hand, labor is substituted by capital, the net output is not modied, it generates unemployment, increases the rate of surplus value and capital turnover increases in duration.By applying Marxs formulation, according to the correction he eected to Scrope in Volume II of Capital, we have rst: prots annual expenditures = g annual expenditures capital replacing:

prots annual expenditures annual expenditures capital
= 13000 = 0.1538 = 20000 = 0.65

13000
2000
0.1538 0.65 = 0.1
561 days of capital turnover
the end result is the same rate of prot on capital. We see how the model Du Pont-Marx-Hayek has a power explanatory consistent with the interpretation of Ricardo, but emphasizing to be amended the rate of capital turnover. When applied funds of working capital, xed capital investment, becomes the organic composition or structure of capital and this aects the turnover rate, t , which decreases. To oset this decline and eects of achieving the same rate of systems protability, g = i, the prot margin on the product - Return on sales - m , is raised, (Marx add: p it rises) in Ricardo words:
60
Seccin 5
All I wish to prove,is, that the discovery and use of machinery may be attended with a disminution of gross produce;and whenever that is the case, it will be injurious to the labouring class, as some of their number will be thrown out of employment, and population will become redundant, compared with the funds wich are to employ it. [63,pags. 291]
Silos Lavini in the discussion of the fruits of technical progress [67, p.: 133 - 152] analyzes an example the case own and proposed by Ricardo compared against the objections of Marx and Wicksell. Recall that Marxs objections are of form but essentially agrees with the proposition of Ricardo, while Wicksells objections are substantive. Wicksell assumes exible wages and sticky prices. Ricardo implicitly assumes sticky wages and exible prices, although as Lavini proves with sticky prices the reasoning is unchanged in substance. But, beyond this discussion, we are interested in the context of this work is that the three formulations lead to same conclusions and show aspects related to rotation and distribution of capital that otherwise would be obscured. 5.2.3 On the transformation of values of commodities into prices of production
We will use the three formulations of the problem known as the transformation of values into prices of production. Of course we will not attempt a solution to the problem, but analyze it in the light of the formulation to see if the interpretations derived from M-DP-H are equal and what aspects of the problem show that, sometimes, with other methodologies not stand out. We believe that the example has a historical importance in the theory economy signicant enough to test the consistency of our hypothesis. The problem of transformation takes shape from Bortkiewicz the work of (1907), Seton, Morishima (1973), Middle, Steedman, and others, coming back to the theoretical consideration of the work of Sweezzy Theory of Capitalist Development . The transformation of the values of commodities into prices of production within Marxist theory has a long history of theoretical discussions on the subject.
61
The problem arises because Marx made his analysis of the economy capitalist in Volume I and Volume II in terms of values. In is rst modeling the relative prices of goods and services reect the labor incorporated into them and are proportional to the amount incorporated. But, as noted by Ricardo, the dierent proportions of capital and labor change the relative prices. Marx gives a solution in Volume III, Chapter IX Formation of a General Rate of Prot (Average Rate of Prot) and Transformation of the Values of Commodities into Prices of Production . Lets use the same example given by Marx and numerical quantities. [35, p.: 163 et seq.] There are some considerations to be made, the cycle D M D occurs in time, begins as a money-capital outlay , which applies in inputs, labor, etc. and reversed after a period of time, in money more back into a plus value. Marx will be taken as unit of time the year, like most economists, which is measured by how many rotations gives the capital in the calendar year42, but we must bear in mind that the reversion to money in a year is identical to the product of the year and therefore:
d = annual depreciation c = annual constant capital =annual variable capital = V v =annual surplus p + +p =value of commodities Yv = d c +v pc = d + c + v = price of cost of commodities g = annual prot g G = annual rate of prot = C C = total constant capital CT = total capital =C + V Y p = pc + G C = price of commodities
C 80 70 60 85 95 390
V 20 30 40 15 5 110
p 20 30 40 15 5 110
d 50 51 51 40 10
Yv 90 111 131 70 20 422
pc 70 81 91 55 15
g 22 22 22 22 22 110
Y p dierence 92 +2 103 -8 113 -18 77 +7 37 +17 422 0
Tabla 14. table and data of Marx

42. We assume product sales. There is no problem of the product realization.
62
Seccin 5
When the cycle D M D is dierent from a year, which is the most normal and common in the business world, we that C + V =CT Yv , 500 > 422 , and also in a closed system, if we assume that the average rate of surplus value p in each activity adheres to the system average rate of surplus value , and that the average prot rate G is equal in all the sectors 43, then the values produced in each sector dier of the prices of production. In the above table shows that the sum total of the values produced in the year is equal to the sum total of the prices of production of the same period, and that sum total of the surplus value equals to the sum total of the annual prot these are the two conditions proposed and emphasized by Marx: 1. 2.
k =m k =1 k =m k =1
Yvk pk
k=m k =1 Y pk = 422, k=m k = 110 k =1 g
where m = numbers of sectors
For Marx, assuming a closed economy, in the system total surplus value must be equal to the total prots of the period, and total surplus values must be equal to the total of the prices of production. This, in general, to propose solutions to the problem of the transformation are conditions that many authors do not respect. The theoretical diculty is generated because the input variables: C, V, p, and wear (d) are expressed in terms of value, but the output variables are found, one in terms of value (cost) and one output prices. Marx himself said that as the companies buy their capital goods and production inputs to output prices, not values, so to calculate the prices of production based on the same columns of constant capital, capital variable, wear, used to obtain the values, the system is not exact or close. This dierence between inputs and outputs, as its valuation has generated strong criticism of this theory. That is, output prices are obtained by summing to cost prices expressed in terms of value, a proportionate share of surplus value44. Proportion that arises from dividing the total surplus in parts equal to equal parts of the total capital of society, by what the cost price is not transformed. Without this discrepancy invalidates the result, for our author. [35, p.: 167]
43. Which in a perfectly competitive market would be the norm. 44.
surplus country total capital country
total capital company
63
However if we emphasize Marxs vision to pose the problem we will see why the solutions given by Bortkiewicz and later authors do not respect the conditions (1) and (2) mentioned above. Do not take the example of Marx and usually do in three sectors, leaving equal the sum of surplus value and amount of prot, and the sum of values and prices of production. We noted that both conditions are basic to Marx. The abandonment of these equalities, neglect made to force a apparent mathematical solution implies not have interpreted the problem and why it is essential for the validity of Marxs scheme, the two equations 1 and 2 above expressed. As noted by R. L. Meek: "Most contemporary debates about the transformation problem are actually slightly less that debates about the general validity of Marxs theory of value and distribution as a whole "[38, p.: 118] Our author starts of a macro view, in of the entire system level, understood as closed economy. What is observed, the data really are the prices of production and the rate of prot, but the only surplus the system produces-if the labor theory of value is true - is the surplus value aggregate, therefore there is no possibility that the mass of prots the year is equal to the mass of surplus value in the same period, and the prices of production combined must equal the sum of values. The aggregate product of the year, the GDP of the economy, must be in the values and the price of production the same, since dierences in each sector, the most and least are compensated. But and the total capital accumulated? The sum of accumulated total capital must be equal in value or price because discrepancies are discrepancies in the valuation but they are not creators of value per se and compensate each other. The discrepancies between values and prices of production are compensated into the total of system. Marx tries to solve of valuation the dierences working with percentages, starts of the aggregate gures, the level at which the sum of values equal the sum of prices of production, and takes the capitals of each sector as a percentage of the total. Marx carries analogically compare the system as a collective enterprise in which the aggregate surplus is distributed in proportion to the aliquot part of capital that each individual capitalist possesses. Every 100 of an invested capital, whatever its composition, draws as much prot in a year, or any other period of time, as falls to the share of every 100, the Nth part of the
64
Seccin 5
total capital, during the same period. So far as prots are concerned, the various capitalists are just so many stockholders in a stock company in which the shares of prot are uniformly divided per 100, so that prots dier in the case of the individual capitalists only in accordance with the amount of capital invested by each in the aggregate enterprise, i. e., according to his investment in social production as a whole, according to the number of his shares. Therefore, the portion of the price of commodities which replaces the elements of capital consumed in the production of these commodities, the portion, therefore, which will have to be used to buy back these consumed capitalvalues, i. e., their cost-price , [35;pags.165] Therefore the prot rate of the system is the total surplus of the year divided the total capital - both aggregate amount in values and in terms of prices of production should give the same amount by what has been said - thereby recognizing that relative prices individual in terms of prices of production, are dierent than values of each sector [35, p. :161-167]. This outline is questioned by authors like Pasinetti [44]. Without analyzing the problem of transformation, beyond the brief introductory comments made so far and without claiming to give a solution. We show now how the model Du Pont-Marx-Hayek is applied to numerical example Marx gives the treat the topic and as dierent formulations can obtain the same results and the same conclusions. The model M-DP-H does show interesting aspects of the problem with other proposed solutions are not revealed. In relation to consider the formula used by Marx must to remember what following, as noted in a previous note. Poulet Scrope [46, p. :156-159], who is cited in Volume II as an example of how to calculate the turnover of capital, making annual expenditure + prot = annual sales and it is the latter concept that divided by total capital: total capital 12 = number of month of turnover annual sales (27)
Examples of Marx takes Scrope give 16 and 9 months respectively of rotation with this technique. Depending on the edition made by Siglo XXI of the capital at this point is added the following note:
65
In Werke IT and this includes the following note: In the manuscript, Marx points out that this way of calculating the turnover time capital is false. The average time of rotation indicated in appointment (16 months) has been calculated taking into account a prot of 7 1/2% on the total capital of $ 50,000. Leaving aside of prot, the turnover time of this capital amounts to 18 month A Marx gives 18 months because the rotation is calculated based on the price of cost, not including prots: total capital 12 = number of month of turnover annual cost (28)
comparing the equation (27) against (28) the dierence is displayed. Now, Book II as the third party were edited and published by Frederick Engels. The latter, who by letters dated Marx was widely consulted regarding modes of calculation and accounting business, pointing with his initials in the following text of Volume II - Chapter 15: Eect of the Time of Turnover on the Magnitude of Advanced Capital: The preparation of this chapter for publication presented no small number of diculties. Firmly grounded as Marx was in algebra, he did not get the knack of handling gures, particularly commercial arithmetic, although there exists a thick batch of copybooks containing numerous examples of all kinds of commercial computations which he had solved himself. But knowledge of the various methods of calculation and exercise in daily practical commercial arithmetic are by no means the same, and consequently Marx got so tangled up in his computations of turnovers that besides places left uncompleted a number of things were incorrect and contradictory. In the tables reproduced above I have preserved only the simplest and arithmetically correct data. My reason for doing so was mainly the following: The uncertain results of these painstaking calculations led Marx to attach unwarranted importance to a circumstance, which in my opinion, has actually little signicance. I refer to what he calls the release of moneycapital. The actual state of aairs, based on the above assumptions, is this....:
66
Seccin 5
In other words: There is indeed a release of money, a formation therefore of latent, merely potential, capital in the form of money. But it takes place under all circumstances and not only under the special conditions set forth in the text; and it comes about on a larger scale than that assumed in the text. So far as circulating capital I is concerned, the industrial capitalist is in the same situation at the end of each turnover as when he established his business: he has all of it in one bulk, while he can convert it back into productive capital only gradually. The essential point in the text is the proof that on the one hand a considerable portion of the industrial capital must always be available in the form of money and that on the other hand a still more considerable portion must temporarily assume the form of money. The proof is, if anything, rendered stronger by these additional remarks of mine.(F.E.) In view of this consideration, one of the few if not only, in the Engels pointed out that a certain lack of habit in practical merchant calculation and the points in the eld of the rotation of the capital. It is noteworthy that, Engels, not Marxs commentary printed in which this corrects and modies Poulet Scrope and prints the text with the amounts of Marx. Not with standing the above, we take Marxs formulation with the price of cost. We apply the formulation M-DP-H, the data table 14. We will apply the formulas to values rst and then at the prices of production and dierentiate between Marxs formula cost price (cp) and the other substituting with the annual product. ROS sector C + V P cp values m I 100 20 70 90 0.22 II 100 30 81 111 0.27 III 100 40 91 131 0.30 0.21 IV 100 15 55 70 0.25 V 100 5 15 20 ATO t 0.90 1.11 1.31 0.70 0.20 ROE i 0.20 0.30 0.40 0.15 0.05
You can see values that the rates of return on capital (i) are all dierent, with the ad hoc hypothesis equal rate of surplus value.
67
sector C + V I 100 II 100 III 100 IV 100 V 100
P 20 30 40 15 5
cp prot price m t i 70 22 92 0.239 0.92 0.22 103 0.213 1.03 0.22 81 22 113 0.195 1.13 0.22 91 22 55 22 77 0.286 0.77 0.22 37 0.595 0.37 0.22 15 22
If we use the formula of Marx, with the cost price rather than the prices of production that we nd dierence? Month cp prot cp prot C +V C + V cp 12 cp C+V cp 0.3143 0.2716 0.2418 0.4000 1.4667 0.70 0.81 0.91 0.55 0.15 0.22 0.22 0.22 0.22 0.22 17.14 14.81 13.19 21 80
Some can be made rst and consideraciones.First and this is signicant for our hypothesis, the three models M-DP-H arrive at the same result. Even Marxs version, priced at cost rather than product arrives at the same rate of prot on capital total. Using this formulation, MDP-H, shows that most marxist authors do not give due importance to Volume II and capital turnover. Thus the solutions of Bortkiewicz and others are based on consider capital only duration of one year (which is equal to consider annual turnover capital)such as Sweezy said: ...formula C + V strictly speaking sample the rate of prot on capital really used in the production of a given commodity ..... Marx makes the assumption that all capital has an identical period of turnover of a year. [58;pags. 79-80] In the preceding paragraph it is clear that confuses the rate of prot on capital with the prot margin on the product. On the other part if it is true that Marx, like any author, taking the year as a standard measurement or unit of measurement rotation cycles, it is also clear that does not assume that all the capital is turned into a year. In all
P
68
Seccin 5
examples of the author, cited here, it is clear that it is not. The dierent depreciation (d)of the problem of transformation clearly indicate Capital not all rotate in one year. Moreover the use of formulas MDP-H leaves also recorded that the turnover time is higher than the year. Lets look at the last column of the table above rotation time, in the example of Marx, ranging from a minimum of 13 months at 80 months, all ve sectors turn in longer time than one year. What is certain, and no major diculty is that macro level, for the economy as a whole, in a closed system, the sum of the values is equal to the sum of the production prices, and simultaneously the sum of the surplus values is equal to the sum of the prots. Furthermore, it is clear from the example of Marx, not considered capital with a useful life of one year. Taking the values of year use of constant capital, as used by the constant capital, the example of Marx, whose total is 202, it is obvious that the lifetime of capital exceeds the calendar year considered. See macro level, considering the consolidated ve sectors such as one, that occurs with the example of Marx: C 390
P cp
V 110
cp C+V
P d cp value price prot=G 110 202 312 422 422 110 =g

P V V C +V
=g 0.22
0.3526 0.624 0.22 1. 0.22 macro-level data Marx
Observed in the previous frame global situation45 , in a closed system the macro equalities between values and prices of the one part, and surplus value and prot on the other, are obvious. Determines an average cycle length D M D of 19 months and 7 days. This global rotation length conrms the above, on the error of considering cycle length equal to a calendar year, because this does not conform to example of Marx. At the macro level the formula M-DP-H says, in a closed system and without regard to the public sector, the share of prots in the added value multiplied by the turnover of capital or the average product of capital is equal to the rate of return on capital.
45. The organic composition of capital can also be represented as: C P C V (1- C + V )=g C+V
69
If we consider that V + P = annual value added = GDP= Y , and G = the sum of prots, can express the following relationship: G V +P = G V +P C +V
(29)
recall that in (29) C + V is equal to the total capital of the economy. Another way to express the same thing is to say that share of prots in Y G GDP ( Y ) multiplied by the average product of capital ( C + V ) is equal to the global rate of prot (G )46.
5.3 The formula "M-DP-H" and the production function

The formulations M-DP-H are related, or can easily expressed in terms, of a neoclassical production function. We consider a function of the Cobb-Douglas and that is equivalent to that used by Wicksell, who in fact was the rst to the use. If we consider a closed economy with no participation state, Y = F(K , N ), the real capital we express K in terms of the nal product for which: K = C + V . If the labor force available is measured in man-hours in terms of the nal product and as N call and establish a consistent relationship between V and the amount of labor that can be used, then: Y = f (K , N ) = K N Y = T = turnover=average product of capital=pmk K Then:
f (K , N ) pmgk = K = K 1 N pmk = Y = f (K , N ) = K N = K 1 N K K K prot = pmgk K K 1 N K prot pmk = Y = m= Y =
K N
46.
Y G C +V Y
= G
70

Y K N Y
Seccin 5
t= K = = K 1 N = K = pmk K i = m t = (K 1 N ) = pmg k
In summary: i = m t = (K 1 N ) = pmk = pmgk (30)
With the term M-DP-H, given the above assumptions 47, is arrives at the rate of prot on capital is equal to the marginal productivity of capital [Formula 30]. And it is clear that the rate of rotation t equals average product of capital. The rate of prot on capital is equal to the exponent of the variable capital per the average product of capital. Recall that represents the share of the prots of capital in income Y f (K , N ) or net product, multiplied by pmk = K = K or average product of capital, we determine the marginal productivity of capital. With the production function or formula M-DP-H the result is the same, showing dierent aspects of the same reality, in certain analyzes explain the capital turnover rate is signicant. Marxs example can be represented as follows48: C V P 390 110 110
G Y Y C +V
value 422
f (K , N ) K
price 422
G 110
Y 220
0.5 0.44 0.22
0.44
0.5 0.5 f (K , N )= 0.9380K N f(500,110)= 220.0
In the above table, take = 0.5 and by solve equation was obtained = 0.5, A = 0.938083151964686, considering the total capital of 500 units and a labor rate equivalent to 110. This indicates that the production function that best ts (with the data that Marx considers in his famous example) is linearly homogenous: + = 0.5 + 0.5 = 1.
47. If the production function is linearly homogeneous, prot = pmgk K , is obvious, otherwise is a necessary condition for the argument that follows. 48. f(k,N)=0.938083151964686 k0.5 N 0.5 obtained by setting: solve(A k0.5 N 0.5 220 = 0, A)
71
In the function eected with the global numbers, the productivity f (K , N ) marginal or is eected considering to the labor force constant K at 110 units. If we build the function for each company or individual sector, capital is constant at 100 units and are obtained approximate results, also, the table of Marx. Sector N I II III IV V 20 30 40 15 5 f (K , N ) Net dierence 0.5 0.5 0.9380100 N price 41.95 42 0.05 51.38 52 0.62 59.33 62 2.67 36.33 37 0.67 20.98 27 -6.02
In the table above the net price means as the price of production minus depreciation and the inputs of the year. See in the chart below the production function macro and his PMgK PMEK, and the relationship between the rate of prot and capital turnover. The production function or the net price is given by expression contained in the above table. In sub graph in which compares m,t,i, m is constant because of the type the functions: K N is given the equality = m.
72
Seccin 6
6 Conclusions
From a historical point of view formulations Du Pont-Marx-Hayek which simplify as: M-DP-H, because they arise in the time in that order, are made with theoretical emergencies a similar view. To the treat authors like Marx and Hayek provide similar views, who from an ideological perspective situates them it in the antipodes, is a strong claim that we have tried to justify. The similarity in the vision, not in ideology, but in the unique approach to to the reality. These penetrate it from the perspective of the businessman. Maybe what was said by Hicks, as indicated above, constitute the best summary of what we mean: The concept of a process in production time, with capital (equity) as the report is made in this on the state of the process, not specically austrian. It is the same concept that underlies theory of the British classical economists, and is oldest still ... is the typical VIEWPOINT businessman, currently the point of view of accounting and formerly the point of view of the merchant ....[25, p. :2122] For Marx, the perspective chosen is determined by the method dialectical. You will start the analysis from such the living conditions of as given and cyclical the transformations in categories. Thus part capital in the simple form of money to cycle through its transmutations: DMP As Godelier says: .... If we pay attention to the concepts used here for Marx (metamorphosis, cycle, circulation, etc.) we see which proposes study the process of capital.... as a totality movement to circulating about herself. [17. p.: 167].. That is what is known in nance as the conversion cycle of the assets,ACC, or operating cycle of a company. It is able to convert assets to inventory to cash, and how much cash it has for the next cycle. The basic concept in the ACC is the cash ow which determines the rhythm of the recovery time of the assets and the repayment capacity of the capital invested. Hicks points out in paragraph quoted above, the classical vision that started cycle thinking and as dened by Storch: P M D = D + D (31)
Conclusions
73
The continuous movement, repeated endlessly, making the for circulating capital and entrepreneur from returning, under the rst form, is comparable to a circle, for the tour, hence the name circulant that distinguishes capital and the circulation for their movement [68, p. :404-5] The formula called Du Pont, born from joining and relating ratios accounting numbers in a system to visualize the progress of the company. Today is Fashionable dashboards in an attempt to make a systematic analysis. The MDP formula constitutes a systemic analysis expected to follow all the developments of the company. Within this concept today, the so-called analysis cycles of cash present a relevant importance and whose shape is similar or equal to the schemes D M D 49. In the DuPont formula analyzes the asset turnover process, remember that the number of rotations multiplied the reverse by 360 K 1 1 ( F (K , N ) 360 = P meK 360 = t 360) gives the number of days it takes an asset in return to the liquid form. Not all assets have the same time of rotation, as Marx noted. The assets convertion cycle or ACC is usually represented by a diagram similar to the expression (31). Lets see it graphically:
49. See Formula 31
74
Seccin 6
It is very easy to see the similarity with the cycle D M D proposed by Marx. It shows how money mutates - is transformed- through a cyclical process and reiterated at the company, the cycle lasts time and the rotation period is determinant of the needs nancial company, the gap between the of payments and collections time is one of the determinants of the demand for funds by the company. The DuPont formula attempts to measure the protability of the cycle and appears in the historical form already shown, to become the decade of 70 standard in both academic and practical the world of nance. The NAAs recommended for historical performance analysis and projected, most of the companies in the Fortune 500 the employed and rates of return on Dun & Bradstreets use as the basis of calculation. While not the appointed times, books that set standards in Finance today as Zvi Bodie & R. C. MERTON or the FINANCE CORPORATE PRINCIPLES of Brealey & Myers & Allen mention it (the latter explicitly dedicates a page), and continues constituting a tool used by nancial managers corporate daily practice. It is precisely the study of economic uctuations on article source Hayeks Ricardo eect and focusing on the problem of the circulation of capital, as we quoted in detail, making the vision and the tools of the businessmen in explicitly and this presents a simple principle: take the conversion of working capital into xed capital considered as a monetary amount suers transformations along a cycle that is repeated continuously in the production process. Trying to show how the shape change is not neutral and how uctuations in a monetary amount that is frozen in physical quantities to revert to a liquid form again, are producers of uctuations in the system. In an article published in 1969 under the name Three elucidations Ricardo Eect Hayek, will respond Hicks reviews on the subject and continues to defend his position. The interesting is used in this article other tooling, the isoquant curve conventional style production but warning: ...as the general thesis of what I have called the "Ricardo Eect" may not be familiar .... ll expose it in a manner that, while not totally unquestionable, I can state that has often proved easier to understand that the more accurate report you have made in the past [21, p.: 143]50
50. The highlighted letters are not in the original text.
Conclusions
75
This is very important for our analysis, Hayek continues to defend more than thirty years after the theoretical tooling and initially used here is that developed (i = m t) considering it technically superior to the traditional analysis of isoquants to explain and analyze this issue. This is not because some tools are higher in absolute terms than the other, but the nature of the problem, its characteristic dynamic, cyclical, makes some tools in Hayeks opinion, are most appropriate. According to Blaug, in the latest edition of its Economic theory retrospection, which adds greater volume of pages to treatment to the Austrian theory, Wicksell eect and Ricardo eect, interprets that for the eect in question has any importance we must suppose nonhomogeneous production functions and rationing credit. Whereupon the marginal cost of borrowing increase with each increase in debt or lag between inputs and production. Either of these two elements validate the Ricardo eect. It goes without saying that these assumptions every day take over theoretical importance. On the issue of the units chosen in the variables: income prots and capital, these three models for determining the prot share, among other authors, with the choice of units Keynes51 measured in money value [69, p. :45-53]. This is not a minor issue and justies applying Keynesian formulation variables. such election constitutes one of the criticisms that the author of the Theory Generalmade the economy classic. The decision and rationale units to be used, based on a criterion of operability and realism, Keynes will consuming a whole chapter of his book. The model M-DP-H has a clear use in daily practice companies, although Marx sometimes used the prot rate formula at the micro level, gives a sense essentially macroeconomic. Hayek who is interested in cycle uctuations and, although it also uses the level of companies and / or sectors as an example, cares about the level of the global economic system. At the aggregate level the model M-DP-H presents the possibility of linking income distribution and rotation social capital
51. Keynes will give prominence to the operational capacity of units extent expressly stating: In dealing with the theory of occupation I propose, therefore, to use only two fundamental units quantity, namely, quantities of money value and quantities of occupation.[69, p.: 49] bold are added
76
Seccin 6
in determining the prot rate of the system expressing the formulations as follows: prot GDP g = (32) GDP K g = PmgK K GDP = D y PmK GDP K (33)
Thus, implicitly it is noted that the rate of prot is a function of the distribution of income and capital turnover52. This expression is important because it can be assumed value of quantities in money, while recognizing the diculties and shortcomings of the same, determine the overall gain rate in a manner consistent with dierent theoretical approaches. And places of relief can only increase the rate of return or prot of the system if participation of prots increases in the product or if the turnover rate is raised, which is meant that the production cycle is shortened. The conclusions of this study are that the three approaches are based on a similar vision, using any of the three formulations leads to the same rate of prot and essentially similar to performances on problems in which it has been applied as a example, in addition: born as a historical process of business development. take capital as CAPITAL - CASH. employing monetary units53. taking into mind the production process as a cycle time, D M D . develop independently. are based on accounting data and obtainable in real life of the business. show that the rate of return to capital is a function of the income distribution and turnover of total capital. Independently of the ideological vision will reach the similar conclusion by applying the model "M-DP-H" to classical examples.
52. g = F(D y , P mk) 53. In fact if the model M-DP-H, is measured in constant currencies for it taking a base year and deating by a price index, the variable in the formula price index is eliminated by simplication, leaving only the monetary expressions. And, in turn, monetary units, the formula being a multiplication of fractions, are canceled.
Conclusions
77
Have been taken, as noted above, problems or examples extracted from Ricardo, Wicksell, Marx, Hayek; examples exhibit singular and independent theoretical importance of treatment given here. And results and interpretations in all of them are the same regardless of the versions MDP-H applied.
78
Seccin 7
7 Bibliographic references
[1] AA.VV(a);1967.The Management of Corporate Capital. Edited by Ezra Solomon . The University of Chicago. Seventh printing. The Free Press. New York. [2] AA.VV(b);1967.Investigaciones y decisiones nancieras y administrativas. Compilador Alexander Robicheck . Editorial Limusa Wiley SA. 1970. [3] AA.VV(c); 1971.Historia de la administracin de empresas en los Estados Unidos. 1era. edicin . editorial Diana. Mxico . [4] Anthony, R.N.; 1975.Contabilidad Gerencial. El Ateneo . Buenos Aires . 1975 [5] Baumol, Willian; 1972.Introduccin a la dinmica econmica. 2o edicin. Marcombo SA. Barcelona. [6] Blaug, Mark ;1978.Teora econmica en retrospeccin. FCE. 1era edicin en espaol de la tercera en ingls. Mxico . 1985 [7] Blaug, Mark; 2001.Teora econmica en retrospeccin.FCE. 1era edicin en espaol de la quinta en ingls. 2001. [8] Braun, Oscar, y otros; 1973. Teora del capital y la distribucin. Seleccin dirigida por Oscar Braun. Editorial Tiempo Contemporneo. Buenos Aires [9] Bodie Z. , Merton, Robert C.; 1999.Finanzas . Prentice Hall Sudamericana SA . Mxico [10] Bradley T. G . , Branch, B.; 1981.Cash ow analysis: more important than ever . Harvard Business Review . july August 1981 [11] Bunge, Mario; 2000.La relacin entre la sociologa y la losofa. EDAF Ensayo. Madrid. [12] Cartelier,Jean; 1981.Excedente y reproduccin. FCE. [13] Dearden, John;1969.The case against ROI control. Harvard Business Review . May June 1969. [14] Dewey, Donald;1967.Teora moderna del capital. Herreros Hermanos SA. Mxico. [15] Dobb , Maurice; 1991.Teoras del valor y de la distribucin desde Adam Smith. Dcima edicin en Espaol . Siglo XXI . Madrid [16] Fowler Newton, Enrique; 1996.Anlisis de estados contables. Ediciones Machi. Buenos Aires.
Bibliographic references
79
[17] Godelier,Maurice; 1967.Racionalidad e irracionalidad en la economa. siglo XXI. [18] Harcourt, G.C. ; 1975.Teora del capital.(en ingls el ttulo es : Some Cambridge controversies in the teory of capital ) Oikos Tau . Barcelona. [19] Hayek, Friedrich A.; 1946.El efecto Ricardo. Apndice en : La teora pura del capital . Aguilar . [20] Hayek, Friedrich A.; 1946.La teora pura del capital. Aguilar . Madrid. [21] Hayek, Friedrich A.; 1981.Nuevos Estudios. Eudeba. [22] Heckert J., Willson J.; 1967.Business budgeting and control . 3era. edition. The Ronal Press company . New York. [23] Helfert, Erich;1976.Tcnicas de anlisis nanciero. Tercera edicin . Editorial Labor. Barcelona. [24] Henrici, Stanley; 1968. Eyeing the ROI. Harvard Business Review . May June 1968. [25] Hicks, J. R.;1973.Capital y tiempo. FCE. Mxico. 1976. [26] Jevons, William Stanley; 1998.La teora de la Economa Poltica. Ediciones Pirmide. Madrid. [27] Labini, P. Sylos;1966.Oligopolio y progreso tcnico. Ediciones Oikos-tau. Barcelona. [28] Lambrix R., Singhvi S.; 1981.How to set volume sensitive ROI targets. Harvard Business Review . March April 1981. [29] Mao , James; 1975.Anlisis Financiero. 2da edicin. El Ateneo. [30] Marx,Carlos; 1974.Historia crtica de la plusvala. Tomo I. Ediciones Brumario. Buenos Aires. [31] Marx, Carlos; 1974 .Historia crtica de la plusvala. Tomo II. Ediciones Brumario. Buenos Aires. [32] Marx,Carlos; 1975.Contribucin a la crtica de la Economa Poltica. Cuarta edicin. Ediciones estudio. Buenos Aires. [33] Marx, Carlos; 1982.El Capital. Tomo I. FCE. Mxico. Decimosptima reimpresin. 1era. edicin 1867. [34] Marx, Carlos;1982.El Capital. Tomo II. FCE. Mxico. Decimoctava reimpresin. 1era. edicin 1885. [35] Marx,Carlos; 1982.El Capital. Tomo III. FCE. Mxico . Decimoctava reimpresin . 1era. edicin 1894. [36] Marx,Carlos;1997.Elementos fundamentales para la critica de la Economa Poltica. Tomo 2 . siglo XXI . Mxico. [37] Mechlin G., Berg,D; 1980.Evaluating research ROI is not enough . Harvard Business Review . September October 1980.
80
Seccin 7
[38] Meek, Ronald;1980.Smith, Marx y despus. Siglo XXI . Madrid. Edicin en ingls 1977. 1era. edicin 1980. [39] Monza, Alfredo;1972. Nota introductoria a la reciente controversia en teora del capital. Teora del capital y la distribucin. Seleccin de Oscar Braun.Editorial tiempo contemporneo. Buenos Aires 1973. [40] Morishima, Michio y Catephores, George; 1990.Valor, explotacin y crecimiento. Oikos. Espaa. [41] NAA; 1973.Returns on capital as a guide to managements decisions. Traduccin. Editorial Machi 1973. Bs. As. [42] NAA;1975.Analisis del uir de fondos para control superior. Ed. Machi. [43] Pascuali, Carlos;1983.La tasa de benecio y el efecto de Ricardo. Revista de la Facultad de Economa y Administracin. UNR. Rosario. [44] Pasinetti,Luigi;1984.Lecciones de la teora de la produccin.FCE. [45] Pasinetti,Luigi;1984.Crecimiento econmico y distribucin de la renta.Alianza Universidad. 2da. Edicin. [46] Poulet Scrope MDCCCXXXIII.Principles of Political Economy deduced from the Natural Law of Social Welfare, and applied to the present state of Britain. Longman, Rees, Orme, Green & Longman. London. Digitalizado por Google. [47] Read, Russell B. 1954.Return of investment. A guide to management decisions. National Association of Accountants - N.A.A.- Junio 1954. [48] Robichek y Myers; 1968.Decisiones ptimas nancieras. Herrera Hermanos sucesores SA . Mxico. [49] Robichek,A.;1970.Investigaciones y decisiones nancieras y administrativas. Limusa-Wiley SA. Mxico. [50] Samuelson, Paul A.;1957.Fundamentos del Anlisis Econmico. El Ateneo. Buenos Aires. [51] Scheuble, P.; 1964.ROI for new Product Policy. Harvard Business Review . November December 1964. [52] Schumpeter, Joseph;1995.Historia del anlisis econmico. 1era. reimpresin de la tercera edicin inglesa. Ariel Economa. Barcelona. [53] Shaikh, Anwar; 1990.Valor, acumulacin y crisis. Tercer mundo editores. Colombia.
81
82
Seccin 7
83
84
Seccin 7
85

Profit Rate of Marx The "Ricardo Effect" of Hayek and Model Du Pont PDF

Загружено:

Сведения о документе

Исходное описание:

Оригинальное название

Авторское право

Доступные форматы

Поделиться этим документом

Поделиться или встроить документ

Параметры публикации

Этот документ был вам полезен?

Это неприемлемый материал?

Авторское право:

Доступные форматы

Profit Rate of Marx The "Ricardo Effect" of Hayek and Model Du Pont PDF

Загружено:

Авторское право:

Доступные форматы

Parallels between the prot rate of Marx, the "Ricardo Eect" of Hayek, and model Du Pont

by: Carlos E. Pascuali

Universidad Nacional de Rosario - 2009

Historical introduction to the subject

3 Historical introduction to the subject

3.1 The development of the concepts in the area of nance

3. [Page 92 et seq] 4. Ibidem.Pgina 939.

Historical introduction to the subject

Historical introduction to the subject

Figura 1. Du Ponts scheme

Historical introduction to the subject

Tabla 1. List N.A.A

Historical introduction to the subject

3.2 The notion of a capital in the Austrian theory

ti = volume of capital investment

or when there is a ow reversal process, continuous or discrete, we have: K

13. [26] 14. [26]

Historical introduction to the subject

Replacing in (8) by (7): KT 1 W T = = investment volume = VI 2 2 (9)

Historical introduction to the subject

Historical introduction to the subject

It takes into account the timing of capital as follows: F = F (A, B , At , Bt , l, r, lt , rt)

Historical introduction to the subject

Historical introduction to the subject

Historical introduction to the subject

3.3 Hayeks model on the Ricardo eect

Historical introduction to the subject

t rate of rotation of capital or rotational speed or turnover i rate of return on equity

Lets see how the model works pro-

Tabla 2. Initial situation

Tabla 3. Initial rate of return on the capital

Historical introduction to the subject

Capital 1000 250 800 800

Sales 1050 525 2100 2100

Cost 900 476 1920 1920

Tabla 4. Net increase of 5% in sales price

Tabla 5. Final rate of return on the capital

4 The rate of prot in Marx

4.1 Background: David Ricardo.

The rate of profit in Marx

The rate of profit in Marx

sector FC hunter 150 sherman 50

price prot L79 s8 10% L173 s2 d7 10%

Tabla 6. capital structure

Tabla 7. Annuities to 10%

Tabla 8. Ricardos problem according to the scheme of Marx

The rate of profit in Marx

4.2 Capital and time in Karl Marx

The rate of profit in Marx

The rate of profit in Marx

k variable capital cycle p surplus of a rotation = k

P annual rate of surplus value = C Replacing in (21): g =

The rate of profit in Marx

weekly product C amortization CC per cycle CV 12.500 20 358 52

Cycle prot 80 Prot on the product

Prot rate cycle 0.1568 Annual rate of prot on capital

Tabla 10. Example of Marx, cap.IV of Volume III

n = number of cycles in the year p = a cycle surplus value g = annual prot t = n pt =P = g t =1

The rate of profit in Marx

Tabla 11. with data from Marx

The rate of profit in Marx

pi (di + cci + cvi + pi)