Re: zero average profit

From: Ian Wright (ian_paul_wright@HOTMAIL.COM)
Date: Wed Jun 11 2003 - 13:37:36 EDT


Hello Philip,

Thanks for the informative reply (and pointing out an error in my
interpretation of an equation -- see below).

>I simply do not know what the correspondences are
>for Marxian economics. One problem is that economies do not seem to exhibit
>much in the way of ergodicity. Without that there can be no deterministic
>thermodynamic limit.

Some empirical distributions of capitalism seem to be qualitatively
constant. Here are some candidates: income distributions (exponential
plus Pareto tails), firm size distributions (a Zipf power law), firm
growth rate distributions (double Laplace), and Farjoun and Machover
argue for a right-skewed profit rate distribution, probably a gamma
distribution. I am sure more could be added to this list. The precise
forms of these distributions may change over time (i.e., the parameters
of the distributions), but the distribution types seem to be constant.
Even if capitalism is not be ergodic in the long-run, different processes
occur at different time scales. Therefore some processes may reach
statistical equilibrium before being displaced by non-ergodic processses
that run at a slower rate. The existence of constant empirical distributions
over time suggests that this happens, and therefore analyses based
on statistical equilibrium are appropriate for some questions.

>Tell me if I understand this correctly: it looks like each commodity type
>has a
>different temperature, ML.  In that case each commodity is a macrosystem,
>or
>macrosubsyatem, and these subsyatems are therefore not in thermal
>equilibrium.
>Cf Duncan Foley's paper where agemts are macrosystems.
>
>Could M be the common temperature? And k/L the price variate.

Yes you are right. As I mentioned I haven't followed this up, and explicitly
did
not make analogies to thermodynamics in my paper. So this is the first time
I have done so, and I got the interpretation wrong. Your interpretation
is the correct one: the MEL ($/hour) is the common temperature, shared by
all
commodities, and k/L the price variate ($/hour). The sectors are in
labour-time equilibrium.

>In Duncan Foley's paper Walrasion adjustment from initial endowments to
>equilibrium is irreversible. To quote: "Economic utility corresponds
>precisely
>to that component of thermodynamic entropy whose change arises from
>irreversible
>transformations".

I don't really understand the implications of this quote.

-Ian.

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