508 PONTIFICIAE ACADEMIAE SCIENTIARVM SCRIPTA VARIA - ~

is zero or the proportion of replacements (i.e. of indirect labour)
 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 proportion
 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 capital
 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 employment
 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 manipulations.
 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