From: ajit sinha (sinha_a99@YAHOO.COM)
Date: Wed Oct 11 2006 - 06:48:26 EDT
--- Francisco Paulo Cipolla <cipolla@UFPR.BR> wrote: > I do not think the maximum rate of profit argument > is a mathematical > tautology since it is grounded on the idea of a > rising composition of > capital (rising c/L) which is a historical tendency > of capitalism. > Rising rate of exploitation and falling rate of > profit go together. > Wasn´t this that Ajit said it was difficult to show? > Paulo ____________________________ Paulo, let me first quote you. You wrote: "Then,the argument goes, IF the value composition of production c/L (as Shaikh(?) calls it) presents a tendency to increase, the maximum rate of profit L/c must present a tendency to fall." (emphasis added). Your qualifyer "if" makes your statement almost a tautology. Why did I say almost and not a tautology? Because a pure tautology would be a statement such as: 'either it is raining or not raining'. This statement, though gives you no information about the weather, is always true. Your statement is always true but on the condition that the elementary methematical law that if the value of a ratio is rising then its inverse must be falling. So for all practical purposes it is a tautology, but since a philosopher could protest, I took the measure to protect against such criticism by calling it almost a tautology. Now you say, "Rising rate of exploitation and falling rate of profit go together. Wasn´t this that Ajit said it was difficult to show? First of all, since you have put your V = 0, which means the rate of exploitation is infinite even if the working time is one second, the concept of "rising rate of exploitation" is meaningless. In any case, what the rate of exploitation has got to do with rising rate of composition of capital? And why cannot you understand my proposition which you are making me repeat time and time again? Let me repeat it for the last time. My proposition is: show me how the three tendencies exist together: (1) real wages, i.e. wages in terms of goods and services, is rising; (2) the share of wages in net income, which is divided between capitalists and workers, is declining; and (3) the rate of profits on capital investment is declining. Now, just to save my time, I will make a few comments on the notion of 'maximum rate of profits'. The notion of 'maximum rate of profits', which is the rate of profits when V is put equal to 0, plays an important technical role in allowing Sraffa to decelop his Standard commodity. Sraffa gives credit to Marx for this idea. If you have read your Theories of Surplus Value then you will know that Marx was very critical of Smith (and also sometimes of Ricardo) on the issue that they resolve total output into wages, profits, and rent without any commodity residual, which basically allows the maximum rate of profits to become infinite. Marx thought that this was an important criticism of Smith and Ricardo. I think Marx's interpretation of Smith was misplaced, but then that's another story. Cheers, ajit sinha ___________________________ > > ajit sinha wrote: > > > --- Francisco Paulo Cipolla <cipolla@UFPR.BR> > wrote: > > > > > Jerry, V=0 is not a hypothesis. As a hypothesis > it > > > wouldbe unsustainable. The > > > maximum rate of profit is the rate of profit > > > attaining under maximum rate of > > > exploitation, in fact, infinite. > > ______________________ > > Actually, maximum rate of profits cannot be > infinite > > if there is positive constant capital. You must > mean > > rate of surplus value, but then it is not the same > > thing as the rate of profits. > > ________________ > > Unfortunately the > > > citation you brought is not > > > related to the issue. In your citation what > counts > > > is the rate of profit when > > > wages are squeezed down to a minimum, the > > > physiological minimum. In the > > > maximum rate of profit argument all new value > > > created stands in the numerator > > > and capital advanced in the denominator, the > well > > > known L/c, where L is the > > > new value crested and c the constant capital. > Then, > > > the argument goes, if the > > > value composition of production c/L (as > Shaikh(?) > > > calls it) presents a > > > tendency to increase, the maximum rate of profit > L/c > > > must present a tendency > > > to fall. This is the kind of argument Ajit said > has > > > never seen in print. It is > > > already there regardless of being right or > wrong. > > > Paulo > > ___________________ > > When did I say anything like that? What you say > above > > is a sort of tautology--how can anyone deny a > > tautology (if c/L is rising then L/c must be > falling > > is an elementary piece of mathematics and nothing > > else, there is no theory here). My point was about > the > > relative immiseration of labor, that is, the > thesis > > that though real wages are rising, the wage share > in > > relation to profit is falling simultaneously with > the > > long term trend of the rate of profits to fall. > Since > > in your above example of c/L, V = 0, it simply > cannot > > have any bearing on the problem. Cheers, ajit > sinha > > > > __________________________________________________ > > Do You Yahoo!? > > Tired of spam? Yahoo! Mail has the best spam > protection around > > http://mail.yahoo.com > __________________________________________________ Do You Yahoo!? Tired of spam? Yahoo! Mail has the best spam protection around http://mail.yahoo.com
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