508 PONTIFICIAE ACADEMIAE SCIENTIARVM SCRIPTA VARIA - ~ 
is zero or the proportion of replacements (i.e. of indirect la- 
bour) to direct labour is exactly the same in all sectors. In 
general, therefore, relative prices will depend both on the 
sum of direct and indirect labour required, and on the pro- 
portion between the two, i.e. on the capital intensity of the 
production processess. However, it is important to notice that 
our approach has made it possible — as the (II.14) show — 
to express the capital components of prices in terms which are 
directly and unambiguously comparable to labour. These ca- 
pital components may thus be added to direct and indirect 
labour. In the (II.14) they are added, and the total sum is 
multiplied by the wage rate. We may, therefore, conclude that 
formulae (II.14) express a theory of value which is indeed no 
longer in terms of pure labour but is — as we may put it — 
in terms of labour equivalents. In the case considered here, 
the amount of labour equivalent corresponding to the employ- 
ment of capital is a fraction (represented by the rate of profit), 
of the amount of labour required to produce capital goods. 
7. A more complex case involving capital for the production 
of capital 
The foregoing analysis has been based on the simplifying 
assumption that capital goods are not needed for the production 
of capital goods, but the simplification has been made only in 
order to keep the formulation as short as possible. 
Dropping this assumption does not entail any conceptual 
difficulty, it only requires a few more algebraical manipula- 
tions. Assume, for example, in order not to go and infinitum, 
that each of the capital goods sectors makes capital goods for 
itself and for the corresponding consumption goods sector, and 
denote by y; in each sector i, (i=1, 2, ..., n— 1), the ratio 
of one unit of capital goods expressed in terms of capacity for 
10] Pasinetti - pag. 28