From: Rakesh Bhandari (bhandari@BERKELEY.EDU)
Date: Tue Oct 30 2007 - 12:59:18 EDT
> Paul, But if credit is withdrawn in one branch as a whole, won't it then be extended to another? So when you write >This effect is much faster acting than the movement >of capital to branches of higher return. Aren't they one and the same movement? >Thus the >mechanism bringing prices into line with values can >be expected to be correspondingly strong. >> That it may be stronger does not mean that it is not in objective contradiction with the tendency towards an equalized profit rate. Marx attempted to conceptualize the real contradictions of which social forms are resolutions. He writes in a passage on which there should be pedagogical focus: "We saw in a former chapter that the exchange of commodities implies contradictory and mutually exclusive conditions. The differentiation of commodities into commodities and money does not sweep away these inconsistencies, but develops a modus vivendi, a form in which they can exist side by side. This is generally the way in which real contradictions are reconciled. For instance, it is a contradiction to depict one body as constantly falling towards another, and as, at the same time, constantly flying away from it. The ellipse is a form of motion which, while allowing this contradiction to go on, at the same time reconciles it." So what Marx is saying about price of production could be summarized thusly: "We have seen that the supply price of commodities is influenced by contradictory and mutually exclusive conditions, the law of value and the law of profit. The resultant modification of the law of value into price of production does not sweep away these inconsistencies, but develops a modus vivendi, a form in which they can exist side by side." When Bohm Bawerk accuses Marx of logical contradiction and Samuelson says that prices of production for all practical purposes erases value, they are both admitting that they cannot understand social forms as the (temporary) reconciliation of real social contradictions. Rakesh > > This is a much weaker condition than profit rate >> equalisation >> and could apply accross more than one form of >> commodity production. >> It could apply to simple commodity production, slave >> latifundia, >> capitalist factories, or workers cooperatives. >> >> >> >> Paul Cockshott >> >> www.dcs.gla.ac.uk/~wpc >> >> >> >> -----Original Message----- >> From: OPE-L on behalf of ajit sinha >> Sent: Sun 10/28/2007 9:06 PM > > To: OPE-L@SUS.CSUCHICO.EDU >> Subject: Re: [OPE-L] Marx on the general rate of >> profit/rate of interest: a translation error >> >> --- Paul Cockshott <wpc@DCS.GLA.AC.UK> wrote: >> >> > I would agree with you that there will be >> > no tendancy for the dispersion of profit >> > rates to narrow, for the reasons you state >> > among others. >> > >> > If one accepts this though, one has to >> > make R a random variable in the transformation >> > equations, rather than an ordinary variable >> > as both Marx and Sraffa do. But we know that in >> > practice >> > it is not only a random variable, but one that >> > s/c is negatively correlated with c/v. >> ______________________ >> Let us leave the empirical R aside and concentrate >> on >> Marx's R. The logical steps that Marx takes is, of >> course, not very clear. He introduces the notion of >> allocation of labor according to social needs in the >> very first chapter of Capital I. 'Values' are >> supposed >> to be the center of gravitation of the allocative >> mechanism--hence there is a 'law of value'. But the >> precise mechanism of this allocation is not spelled >> out. It is because he has not yet introduced profits >> in the system. One is left to wonder whether the >> argument is conducted at the level of 'simple >> commodity production' or there is an implicit >> assumption that organic composition of capitals >> accross the sectors are uniform. I guess, it would >> be >> easier to take that he assumes uniform OCC. In that >> case, the 'law of value' equalizes the rate of > > profits. Then in Volume III, the assumption of >> uniform >> OCC is removed. Now, the 'law of value' has already >> equated the rate of profits, but this implies that >> 'prices of production' must deviate from 'value'. >> And >> this is the transformation problem: given the >> uniform >> rate of profit calculate the prices of production. >> In >> this process no further allocation mechanism is >> taking >> place. There is absolutely no time element involved >> here. Samuel Hollander, on the other hand, argues >> that >> Marx delibrately begins with disequilibrium position >> such that the exchange ratios are equal to value >> ratios and in Vol.3 he allows the disequilibrium >> situation to move to equilibrium position. Thus in >> his >> account, the equalization of the rate of profits and >> the allocation mechanism takes place precisely at >> the >> level of the transformation of values to prices of >> production. But even in this story the time has to >> be >> 'logical' and not 'historical' as I argued in the >> earlier post. Cheers, ajit sinha >> > >> > Paul Cockshott >> > >> > www.dcs.gla.ac.uk/~wpc >> > >> > >> > >> > -----Original Message----- >> > From: OPE-L on behalf of ajit sinha >> > Sent: Sun 10/28/2007 6:11 PM >> > To: OPE-L@SUS.CSUCHICO.EDU >> > Subject: Re: [OPE-L] Marx on the general rate of >> > profit/rate of interest: a translation error >> > >> > --- Paul Cockshott <wpc@DCS.GLA.AC.UK> wrote: >> > >> > > What is left unstated in your summary Gary is >> > > whether Marx expects the dispersion of profit >> > rates >> > > to narrow with >> > > time? >> > > If that does not occur what does a tendancy to >> > > equalise mean? >> > > >> > > Instead of a tendancy to equalise, one might >> > > hypothesise some constraints on the dispersion. >> > > >> > > Paul Cockshott >> > _________________________ >> > What time? What could be empirically the starting >> > point in time to see if dispersion rate norrows or >> > not? The idea of the center of gravitation cannot >> > deal >> > with what Joan Robinson called 'historical time'. >> > Historical time is the time of growth and >> > accumulation. Now, growth and accumulation >> theories >> > also put various constraints on certain >> > parameters--but those constraints on parameters >> can >> > be >> > dealt with by empirical investigations of how >> > 'reasonable' they are. But for the gravitation >> > mechanism to work itself through, you need to >> assume >> > that both techniques of production and the rate of >> > profits and the real wages (and consumption and >> > savings paterns etc.) remain constant while the >> > mechanism works itself out. Now, as long as growth > > > (or >> > movement along historical time) is expected to >> break >> > any of these constants, the gravitational >> mechanism >> > will have to continuously restart itself a >> > fresh--therefore, you will not have a starting >> point >> > or a finish point to empirically test if it works. >> > That's why you will have to assume steady state >> > growth >> > path on the historical time to let the >> gravitational >> > mechanism work. The classical economists, such as >> > Smith and Ricardo, did not asssume a steady state >> > growth path (Marx came close to modeling one >> > though). >> > Thus in their framework, the idea of center of >> > gravitation works on 'logical' or notional time >> and >> > not on 'historical time'. But as we have shown in >> > our >> > paper, the logic of it is not all that sound. >> >=== message truncated === > > >__________________________________________________ >Do You Yahoo!? >Tired of spam? Yahoo! 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