From: Francisco Paulo Cipolla (cipolla@UFPR.BR)
Date: Fri Oct 13 2006 - 14:59:18 EDT
Jerry, L is total new labor which implies that some people are actually working and to whom there correspond wage payments. L/c measures the ratio of this new value created to dead labor independetly of how large or small wages are. What is wong with this measure? Paulo Jerry Levy wrote: > > The maximum rate of profit is a concept that allows us to see that the > > fall of the profit rate is independent of the rate of exploitation. For > > this to be true it is enough to show that the new value created (L) > > shrinks as a percentage of constant capital. Besides, L/c is part of > > reality: it is the total new value created as a % of constant capital. > > It is a living concept not an absurd hypothesis. Just as simple > > reproduction, it is there, it is part of the real world. The fact that > > some of L is paid as variable capital only shows that the actual rate of > > profit moves underneath a falling trend. This was a way out of having > > the same status for tendency (rising c/v) and counter-tendency (rising > > s/v) in the interpretation of the FROP issue. I have never seen a > > critique of this view. > > Paolo: > > I think you illustrate well the dangers of making extreme assumptions -- > the purpose of which was merely mathematical convenience. The > idea that new value and surplus value is created even where there is no > wage-labor is most certainly _not_ a hypothesis which is "part of the real > world". Even in the abstract scheme of simple reproduction, there is > surplus value, variable capital, and wage-labor. The _fact_ is that the > rate of profit is _not_ independent of the rate of surplus value. The > dangers in linear formalizations include over-simplification, > mis-specification, and the development of theory which is trans- > historical and incapable of saying anything meaningful about capitalist > realities. Mathematical imperatives should never be allowed to by > themselves drive the development of a theory of modern society: > GI = GO is a slogan which has relevance for more than just > computer engineers.* Marxists would do well to take some of the criticisms > made by the French economics students, which led to the creation > of the _Post-Autistic Economics Review_, to heart. > > "Existing economics is a theoretical [meaning mathematical] system > which floats in the air and which bears little relation to what > happens in the real world" -- Ronald Coase > > "Economists have converted the subject into a sort of social > mathematics in which analytical vigor is everything and practical > relevance is nothing" -- Mark Blaug > > (above, and other noteworthy, quotes, from http://www.paecon.net ) > > In solidarity, Jerry > > * GIGO is an aphorism meaning 'Garbage In, Garbage Out'. A > variant -- especially noteworthy for Marxians -- is 'Garbage In, > Gospel Out'.
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