From: Anders Ekeland (anders.ekeland@ONLINE.NO)
Date: Tue Oct 30 2007 - 15:55:41 EDT
Hi all, I am not asking for a vote here. But I have always been surprised that people inspired by Marx think that the tendency for the profit rate to fall is refuted by it. The premises of Okishio is clearly different from Marx'. Marx has a dynamic temporal model, where sunk cost - the M paid for the original machines - will only gradually be written down, be replaced by new and cheaper machines, but for a certain period of time the profit rate will fall - which will in its turn lead to other things happening that will counteract this tendency. And of course it is the monetary rate of profit we are talking about - the only rate that capitalists care about. Okishio and Roemer is not on that dynamic playing field at all - so it is from rather general observations on the relationship of dynamic systems to static equilibria clear that only by accident would the Okishio theorem have any bearing - as I have said before. One had to show that Okishio's static model incorporated the essence of Marx' dynamic model. That there always were very strong ideological forces wanted to see Marx proved false - not empirically, but logically/ideologically is quite clear - and a fact one has to bear in mind. I mean - the whole GE thing of Debreu is a construction - totally divorced from reality in an economic sense, but with an immense ideological importance. So important - that more empirically sound "bourgeoisie" theories like Hayek's (Austrian economics) and Schumpeterian (evolutionary) - remains marginal - although gaining influence. Given the basic law of Marxist economics: no static result must be accepted as relevant before it is proven to be valid in a fairly general dynamic model, should make one sceptic of the relevance of the Okishio theorem from the start. I have not studied the literature around this theorem in depth, and it seems to me that in Kliman's book, the chapter on this puts forward a quite correct critique using a "dynamics light" - or "quasi-static" model in order to disprove the Okishio theorem by the simplest model possible - or more precisely - to show that Okishio is not relevant for the dynamic mechanisms that Marx' discusses. I must have missed something in Jerry's line of argument, because to me the fact that wages are zero in Kliman's examples is only a true simplifying assumption. I fail so see that giving workers a constant monetary wage would change anything regarding the relevance of Okishio. The very limited purpose of the Kliman (and Freeman) exercise regarding Okishio was recently very well formulated in the text forwarded to the list. What we should do is to model the mechanisms of the tendency for the profit rate to fall - and the counteracting tendencies - and try to validate them empirically. Just to mention one stylised fact: The profit rates achieved after the enormous destruction of physical capital (and the switch from elite to mass consumption of cars, electrical articles, chemical products etc.) that we saw in the decades after the II WW - will be hard to repeat. That profit rates will be temporarily restored when the workers movement suffers defeats - f.ex. by the neo-liberal offensive - point again to the cyclical nature of the accumulation process which the tendency of the profit rate fall in an *organic/endogenous* interplay with the counteracting tendencies creates. It seems for me - again based on Kliman's book - that slowly the irrelevance of the Okishio theorem is being accepted by people who IMO earlier had not reflected critically enough on what the theorem actually does say. Just to repeat - I am interested in hearing the arguments for why Okishio's static model can say anything definitive about Marx dynamic model on the issue of the movements of the profit rate when there are endogenous (competition driven) labour-saving technological change? Or am I kicking in open doors? Regards Anders
This archive was generated by hypermail 2.1.5 : Fri Nov 02 2007 - 00:00:19 EDT