From: ajit sinha (sinha_a99@YAHOO.COM)
Date: Wed May 02 2007 - 07:26:05 EDT
--- Paul Cockshott <wpc@DCS.GLA.AC.UK> wrote: > Ajit wrote > _____________________________ > Paul, but why our straight forward argument is not > convincing? That is that if the rate of profits are > not equal then as you increase wages from zero and > try > to go to the maximum, you find that you cannot reach > the maximum because some rate of profits turn > negative > before other reach zero, which only reveals > existence > of some constraint on the system. > > Paul > I dont disagree with what you are saying as formal > mathematical point. The question is what > interpretation > we are to give to the maths in the real world. I > agree > that as wage rates rise with a widely dispersed set > of profit > rates then what you describe will happen. > > Let us assume that the actual distribution of profit > rates is Guassian with a mean equal to the rate that > would occur if it were the Standard Rate for the > actual distribution of income. A rise in wages will > shift the mean to the left and if the variance of > the distribution remains the same then more of the > left tail > of the bell curve shifts below zero. This implies > that a higher percentage of capitals are making a > loss. > A fraction of these will go into bankruptcy which > will > tend to pinch the curve in towards the mean. > The pinching on the left is obvious, but there will > be > a corresponding pinching to the right, because the > losses made on the left hand side of the curve had > been > compensated by extra profits on the right hand side. > Once > the losses are reduced, so are the extra profits on > the right. > > So I basically agree with you on the effect of a > rising wage > share. > But what I ask is why you suppose that the wage > share > will rise? > > The increase in bankruptcies that occur as the bell > curve > shifts to the left will tend to weaken labour > relative to > capital because of unemployment. One would then > expect > that the wage / profit relationship would revert to > its previous level. > > The dispersion of the rate of profit and the rate > of surplus value are linked, the lower the rate of > surplus value, the smaller is the coefficient of > variation of the rate of profit. _____________________ Paul, we are not thinking about the adjustment of the system in real time. Our problem is different. What we are asking is that: Can we think of any given economy as a whole machine? And if so, then what are the logical relations that must exist between its various parts for this machine to be able to reproduce itself. In this context, we argue that if there was no outside constraint imposed on this machine then the machine should be indifferent about how the total surplus is distributed among the two classes. The question about why should wages rise is not relevant here. > ---------------------------------- > Ajit > ---- > This, in my view was > behind Sraffa's basic argument when he argues that > all > prices must change when rate of profits change given > the total output constant. This is also behind the > discovery of the Standard commodity. The question > was: > why should prices change when distribution changes? > The answer was: to redress the deficit or surpluses > that would emerge in different sectors; it was seen > as > an internal necessity of the system. Only from this > ground, he could ask: so if I remove this cause from > some sector then that commodity will have no reason > to > change given the cause. And so the Standard > commodity > was discovered. I, of course, would welcome some > suggestions of developing some internal dynamics of > the system--more in the line of quantum mechanics, I > guess--which would also prove the above proposition. > > If you have any idea, please send it to me off list. > Currently we are working out the dynamics of the > gravitation mechnism given CRS to see if it, in any > case, works. Cheers, ajit sinha > > ---------- > Paul > > There would be a real problem with attempting to > derive the dynamics from quantum theory in that > quantum theory does not allow you to break the > laws of thermodymamics. You can not reduce the > entropy of a closed system like the economy using > any mechanical model whether classical or quantum. > One needs a dissipative system like boolean logic if > one is > to reduce the disorder of a system. > > These observations are made at a very high level > of generality, as the idea of using a quantum > like mechanical model for anything other than > exchange relations had not occured to me. ______________ We will think about this. But I think your observation relates to the real system adjusting in real time (where mechanical or classical cause and effect relation is maintained), but our case is slightly different but we have to think more on this issue. By the way, Sam Hollander has just informed me that my name is misspelled in the footnote one. This is quite embarrassing! The foot note was drafted by my co-author but I should have caught it. Any way, I have asked Peter Kriesler to see if it could be fixed. Cheers, ajit sinha > > > > > > > www.dcs.gla.ac.uk/~wpc > > > > > > > > -----Original Message----- > > From: OPE-L on behalf of ajit sinha > > Sent: Mon 4/30/2007 11:42 AM > > To: OPE-L@SUS.CSUCHICO.EDU > > Subject: Re: [OPE-L] Sraffa and the question of > > gravitation > > > > --- Paul Cockshott <wpc@DCS.GLA.AC.UK> wrote: > > > > > OK so you are implicityly assuming that R1=R2 > =R3 > > > this is not evident at this point of your > > > explanation > > > > > > Paul Cockshott > > __________________________ > > I'm not implicitly assuming that. All I'm saying > is > > that if you aggregate all the sectors of the > economy > > and conceive it as one factory ( as Marx time and > > again tries to do), then the input side can be > > multiplied by (1+R) and equated to the output > side, > > where R is the average profit for the whole > economy. > > If R happens to be not equal to the Srandard rate > of > > profit then R1 = R2 = R3 = ... will not be true. > It > > will be true only when R is equal to the Standard > > rate. The next step in the argument is that > > inequality > > between R1, R2, R3, ... can exist only if there is > > some outside constraint on the system. Thus when > in > > your empirical work you find R's not to be equal, > > one > > explanation for it could be that there is always > > some > > outside interference in the market--for example, > > tariff, tax, subsidies, etc. Furthermore, the real > > world, of course, is more complex and so any model > > designed to clarify a particular theoretical point > > should not be expected to "varify" the real world > > variables immediately. This, of course, was not > part > > of the question but I'm just trying to clarify a > > point > > in advance. Cheers, ajit sinha > > > > > > www.dcs.gla.ac.uk/~wpc > > > > > > > > > > > > -----Original Message----- > > > From: OPE-L on behalf of ajit sinha > > > Sent: Sun 4/29/2007 9:52 PM > > > To: OPE-L@SUS.CSUCHICO.EDU > > > Subject: Re: [OPE-L] Sraffa and the question of > > > gravitation > > > > > > --- Paul Cockshott <wpc@DCS.GLA.AC.UK> wrote: > > > > > > > Ajit > > > > I have put a paper entitled, 'Sraffa and the > > > > question > > > > of equilibrium' written by myself and a > > colleague > > > of > > > > mine on the SHE web site. This paper directly > > > deals > > > > with an issue that has been, one way or the > > other, > > > > one > > > > of the major concerns of the discussions on > this > > > > list. > > > > I would appreciate all critical or friendly > > > comments > === message truncated === __________________________________________________ Do You Yahoo!? Tired of spam? Yahoo! Mail has the best spam protection around http://mail.yahoo.com
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