ABSTRACT
We shall now link the ratio of proceeds to prime costs in an industry, which we discussed in the previous chapter, with the relative share of wages in the value added of that industry. The value added, i.e. the value of products less the cost of materials, is equal to the sum of wages, overheads and profits. If we denote aggregate wages by W, the aggregate cost of materials by M, and the ratio of aggregate proceeds to aggregate prime cost by k, we have: https://www.w3.org/1998/Math/MathML"> overheads + profits = ( k − 1 ) ( W + M ) https://s3-euw1-ap-pe-df-pch-content-public-p.s3.eu-west-1.amazonaws.com/9780203708668/09397ff6-dfe3-4264-97b7-fa15b1e26590/content/math_14_B.tif" xmlns:xlink="https://www.w3.org/1999/xlink"/> where the ratio of proceeds to prime costs k is determined, according to the above, by the degree of monopoly. The relative share of wages in the value added of an industry may be represented as https://www.w3.org/1998/Math/MathML"> w = W W + ( k − 1 ) ( W + M ) https://s3-euw1-ap-pe-df-pch-content-public-p.s3.eu-west-1.amazonaws.com/9780203708668/09397ff6-dfe3-4264-97b7-fa15b1e26590/content/math_15_B.tif" xmlns:xlink="https://www.w3.org/1999/xlink"/>
