From: Paul Cockshott (wpc@DCS.GLA.AC.UK)
Date: Tue Jan 31 2006 - 04:51:57 EST
Andrew Brown wrote: > >Imo, the economic basis for refuting neo-R critique lies in the >necessity for there to be limits on prices, to ensure enough needs of >workers are met, and enough profit needs of capitalists are met, across >the economy and through time. These limits are given by SNLT. > >The theory of exploitation shows in essence how the system actually >enforces these limits. But it is folly to think that at any point in >time the aggregate equalities actually hold at market prices because the >limits take effect only through rupture and crisis. > > I think this understates the power of value constraints. They operate all the time and are considerably stronger than profit equalising constraints. A firm whose selling price does not cover the direct and indirect wage costs has a short life expectancy, whereas a firm can go on indefinitely with a rate of profit below the economy average, provided that its gearing ratio is low. Assuming price/direct costs are normally distributed, the first criterion means that the standard deviation of this distribution must be small. Suppose the rate of surplus value is 50%, then we would expect that coefficient of variation of the price / value ratio would have to be less than 0.25, because otherwise more than 5% of firms would not even be meeting their direct and indirect wage costs ( and hence since the indirect wage costs are always less than C, would be running at a large loss ). It is hard to see that the constraints on the coefficient of variation of the rate of profit are anything like as tight. Provided that the rate of profit was still positive, a firm could continue operating with a profit rate 2 SDs away from the mean. -- Paul Cockshott Dept Computing Science University of Glasgow 0141 330 3125
This archive was generated by hypermail 2.1.5 : Thu Feb 02 2006 - 00:00:02 EST