From: Paul Cockshott (wpc@DCS.GLA.AC.UK)
Date: Sun Mar 11 2007 - 18:51:54 EDT
Sraffa and Marx's vol3 rely on a fable which purports to explain what we now know to be a counter-factual the hypothesised equal rate of profit. The fable goes = given a difference in rate of profit capitalists move from low to high earning branches of industry re-equilibrating profit rates. Fables are tricky here is an alternative fable which goes in the opposite direction. Suppose we have two industries as described below C V S r 300 100 50 12.5% A 900 100 50 5% B Suppose that prices are proportional to values. In the standard interpretation this is a disequilibrium situation which should be fixed by capital moving from B to A and shifting relative prices. However, a firm with large fixed capital in B may also respond by trying to cut their current running costs ( since the fixed capital costs can not be readily changed ). Thus they may try to further cut their labour costs moving to a new situation: 900 75 75 7.7% B which has tended to re-equilibrate profit rates by establishing a higher rate of surplus value. But then what happens? If there is a constraint on the dispersion of the rate of surplus value as argued by F&M, this will be a temporary situation and the result will be to move to 900 75 37 3.8% B In other words one could make up a story which is just as plausible as the one used for the equalisation of profit rates which argues that the feedback relations tend to accentuate any initial dispersion of profit rates. Since we know that there actually is a wider dispersion of profit rates than of the profit/wage ratio - which if any fable is true. Paul Cockshott www.dcs.gla.ac.uk/~wpc
This archive was generated by hypermail 2.1.5 : Sat Mar 31 2007 - 01:00:12 EDT