It seems to me that we have to treat Vol. III
of CAPITAL for what it is -- a draft. To be
sure, it would be nice to see the draft
that Marx himself wrote. However, unless the
editing by Engels is even more drastic than Michael
reports, I think it is fairly clear that Marx
himself does not have a correct formula for the
rate of profit. According to Marx, it makes no
difference in computing the rate of profit if,
say, $1000 of constant capital is fixed or circulating.
In comparing rates of profit over time, the rises
or falls in Marx's rate of profit would, of course,
hold even when corrected if the ratio between fixed
and circulating constant capital is constant over
the same period of time. Yet, following Marx, most
of us agree that the ratio is changing.
For example, if, today, capitalists invest $1000 in
constant circulating capital and obtain return on
that investment of $100 and tomorrow the investment
is $500 in fixed capital and $500 in circulating
capital with the same return of $100, then, using
Marx's method, we would obtain the same rate of
return. Obviously, as the fixed capital ages, the
rate of return would increase when we use the Marx's
formula. This divergence would be all the greater should
one interpret Marx's notion of accumulation as
"Marx biased."
Note that in Chapter 15, Sec. 4 of Vol. III, Engels seems
to think funds that were used as variable capital can, in
the next period, be invested in fixed capital without
even considering how long that investment in fixed capital
might be used to produce surplus value. This seems to me
to be, at best, a gross simplification and, at worst, simply
stupid. Indeed, given Engels' idea here of substituting
dead labor for living, it forces one to assert that the
in comparing rates of profit over time, the ratio of
fixed to circulating capital makes no difference and that
the durability --social and technical-- of fixed capital
is irrelevant to the computation of the rate of profit.
John