From: glevy@PRATT.EDU
Date: Sun Sep 30 2007 - 11:07:20 EDT
Ajit: It is not my perspective which is in question. It is yours. To refresh your memory, you said that if it was the case that wages decreased and/or the intensity of labor increased then the rate of profit "must" rise. This perspective illustrates the dangers of taking a simple analytical claim made by Sraffa concerning the relation between the wage and rate of profits in the standard system and extending that to an analysis of a concrete development (in this case, the unfolding economic situation in the US economy). I am reminded here of Hamlet's comment to Horatio. The wage-rate of profit fronteir was drawn - as you well know - under the ceteris paribus assumption. For your claim to be true about what "must" happen to the rate of profit under the circumstance of a rising wage and/or increasing intensity of labor to be true, you (not I) would have to show that these are the _only_ variables _in practice_ which can cause there to be a change in the rate of profit. Failing that, you would have to recognize that what happens to the r following a change in these two variables is uncertain (i.e. it is uncertain whether r would decrease at a lesser rate, increase, or remain unchanged). In solidarity, Jerry
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