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At 19:59 08/05/00 +0530, you wrote:
>
> > I was not aware that the neoclassical theory had a theory of the declining
> > rate of profit. It drops right out of the definitions I am using along
> with the
> > assumption of a slowly growing or stagnant size of the proletariat - the
> > standard condition in developed capitalism.
>
>___________________Paul C, I'm sympathetic with you giving some
>constructive hard
>time to paul Z. But don't you think that the neoclassical theory has its own
>falling rate of profit theory? Diminishing marginal productivity of
>capital can
>easily be interpreted as their version of a falling rate of profit theory.
After I posted my letter I thought about just this point.
I think you are right there is a falling rate of profit theory in neoclassical
economics. The difference is that the marxian theory gives it a more
precise mathmatical figure.
If you know the working population, the division of the working day between
necessary and surplus time and know the capital stock, then you get a
figure for the rate of profit. In fact the rate of profit is inversely
proportional to the capital stock. The neo-classical theory is
much less precise in its prescription.
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