[17]In the numerical example quoted in chap. vi. ([p. 117].) the rate of profit is much higher in Department II than in I. Marx has made the rate of exploitation equal in the two departments, and the ratio of constant to variable capital higher in Department I. This is evidently an oversight. The two departments must trade with each other at market prices, not in terms of value. Therefore s1 must represent the profits accruing to Department I, not a proportion (half in the example) of the value generated in Department I. s1/v1 should exceed s2⁄v2 to an extent corresponding to the higher organic composition of capital in Department I. The point is interesting, as it shows that when off guard Marx forgot that he could make prices proportional to values only when the organic composition of capital is the same in all industries.
[20]Since, in this model, the organic composition of capital is the same in the two departments, prices correspond to values.
[21]Of total gross output, 2⁄3 is replacement of constant capital; surplus is 1⁄6 of gross output, and of surplus half is saved; thus savings are 1⁄12 of gross output; of saving 4⁄5 is added to constant capital; thus 1⁄15 of gross output is added to constant capital. The output of Department I is therefore 2⁄3 + 1⁄15 or 11⁄15 of total gross output. Similarly, the output of Department II is 4⁄15 of total gross output.
[22]This model bears a strong family resemblance to Mr. Harrod’s ‘Warranted rate of growth’. Towards a Dynamic Economics, lecture III.