Rakesh wrote in [6016]: > i am having problems with mail, but i think that > you have challenged nwoke's > argument by saying that coal is not a perfect > substitute for oil. ----- In my previous post I did not use the expression "perfect substitute". Rather, my claim is that _in general_ coal and oil can not be viewed as being substitutes. ----- > I think your > reasoning was based on the physical differences between the natural resources; ----- No again. Rather, the differences concern the use-values of these two separate commodities. Thus, it is not simply that coal and oil have physical differences -- rather, the issue is how certain types of technologies and labor processes require a particular form of energy and/or resource (or alternatively, how a transition to alternative technologies or processes would require a considerable expenditure of capital and writing-off of existing constant capital). ----- > OK but does Nwoke's argument depend on coal being a perfect substitute? ----- That part of Nwoke's argument that links the price of oil to the price of coal depends on the claim that the two commodities are substitutes. ----- > Moreover, to the extent that there are no substitutes for the exhaustible > resource of oil, wouldn't there be a stronger possibility of monopoly profit > and thus absolute rent in the production of oil? so i do not understand your point. ----- I'm not challenging the idea that oil-producers receive a monopoly profit. Rather, I am saying that it should be evident that there is no necessary reason to suppose that the price of coal governs the price of oil. If there is an implication to my argument it is that oil-producing companies (especially when organized into a cartel) have a *greater* monopoly power to set the price of oil on world markets than that suggested by the author you cited. In solidarity, Jerry
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