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Sekerka - Kyn - Hejl:  Price Calculations

6. Note on the Method of Abolishing the Dual Price Level
It follows from the (n + 1)st condition that the double price level can be abolished by increasing the level of wholesale prices to the level of retail prices. There still will remain some differences due to trade margins or special indirect taxes.
The increase of wholesale prices is in fact nothing else but the reintroduction of a homogeneous price measure. The purchasing power of a crown is at present much higher in wholesale than in retail prices. It is this equalization of the price measure that results in changes of the volume of gross social product and national income.
The increase of the wholesale price level assumes abolishment of the general turnover tax. This represents the change of the channel through which the surplus is appropriated. As the turnover tax disappears, the surplus is shifted into profits. Speaking of the change of the channel does not mean that the profits will rise just by the same amount as the turnover tax will fall. We must not forget that the price measure changes at the same time. The real contents of the price increment should be equal to the real contents of the abolished turnover tax; after the abolition of the double price level the nominal increment of profits will be, however, as a result of changes in relative prices, different than the former amount of the turnover tax.
Let us also note, that the change of the price measure and the relative prices will be reflected in many economic indicators, as for example in the material costs share of the social product, in the rate of surplus and in the rate of accumulation.

 

 

 

 

 

 

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