Preamble

Imagine the following very simple capitalist economy. There are three sectors of production (which we shall label sector 1, sector 2 and sector 3). Sector 1 produces generic means of production, which is used by all three sectors. Sector 2 produces generic means of workers’ consumption, consumed by the workers of all three sectors. Sector 3 produces generic means of capitalist consumption. We assume that all commodity product that is surplus to the replacement of the means of production consumed in production and to the requirements of workers’ consumption is consumed unproductively by capitalists (in other words, we assume simple reproduction, i.e. that the material scale of production is constant over time).

More (pdf, 129 KB): A Note on the Formation of Prices of Production