From: rakeshb@STANFORD.EDU
Date: Thu Apr 10 2003 - 14:04:19 EDT
Dear David, Thanks for your reply. It's not obvious to me that the Tracking Theorem holds once we assume that the denominator in the formula for the value rate of profit (s/c+v) is rising even on the assumption of constant real wage as a result of a rising absolute variable capital outlays on the absolutely greater workforce which is needed to valorize the quantitatively growing means of production. The TSS model on which you comment not only makes the dubious v=0 assumption, it also stipulates no growth at all in the absolute size of the workforce. This makes no sense to me since with a growing material surplus of means of production and wage goods capital would be able expand the valorization base in each following period--there would be the means of production with which to absorb additional labor and the wage goods for their subsistence. Of course the rate at which v should increase is difficult to determine because along with a rise in the absolute size of the workforce there is (on Marx's assumption) a reduction in the unit values of wage goods and a rise in the rate of exploitation. It's just not clear to me that the Tracking Theorem holds under more realistic conditions. In short, I don't think we can treat as equivalent the stipulation of a constant real wage and the fantasy that workers can live on air. With the former stipulation the outlay on variable capital could still be increasing in absolute terms and that may be enough to yield a falling rate of profit. Yours, Rakesh
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