From: rakeshb@STANFORD.EDU
Date: Thu Apr 10 2003 - 12:42:32 EDT
Hi Rakesh,
This is a quick response, in the midst of mucho work. Will go over
your question in more detail later.
I haven't been looking at TSS/FRP stuff for a while; currently turning
my attention to, of all things, aggregate supply in the short run! But
here goes.
I *think* (will check this) that the FK assumption w (or v) = 0 is not
so bad; extreme, of course, but it stands in for w constant. This, of
course, is their point: the *value* profit rate falls, *even if* the
real wage is constant. I think they (and I) can generalize from w = 0
to w = const > 0 without too much trouble. The issue between us, of
course, is my Tracking Theorem: *except in special cases* (the ones they
use in their numerical examples), the value rate *eventually* follows
the material rate (without being identical to it. So their attempt to
portray a rising "material" rate and falling "value" rate simultaneously
-- pardon my French! :-) -- cannot be sustained. I have always sought
to affirm the likelihood (not the inevitability) of a falling *material*
rate; this, I think, is a genuinely critical immanent tendency. From my
point of view, in conceding to orthodoxy a rising (what they call)
material rate, FK have given away the show.
best,
David
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