Accounting for Value in Marx's Capital by Robert Bryer

Author:Robert Bryer
Language: eng
Format: epub
Publisher: Lexington Books, a division of Rowman & Littlefield Publishers, Inc.

The rate of profit (r) equals the profit mark-up (q/(1 + q)) multiplied by the sales for period t, divided by the constant capital multiplied by the sum of its turnover times (the sum of time as cash (Tf), in production (Tf), and on the market (Tr)), plus the fixed capital (FC(t)) invested for period t. If r, S(t), Tf, Tp, Tr and FC(t) are given, C(t) becomes the target cost:

For example, if r = 0.2, S(t) = £12, FC(t) = 0, and Tf + Tp + Tr = 1 year, the target cost is:

In general, the higher the required return and the longer the turnover period, the lower the required target cost.5

Target cost is the “cost price” (c + v) in Marx’s table (see Table 5.1), his accounting solution where the capitalist sees only market prices and the general rate of profit.

For example, the target cost price for Capital I:

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