From: Gary Mongiovi (MONGIOVG@STJOHNS.EDU)
Date: Tue Oct 30 2007 - 17:00:33 EDT
Anders wrote: " 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." Perfectly sensible, and I fully agree. The tricky issue, though, which is at the heart of much of the debate over the Okishio theorem, is" "which profit rate?". The question operates at two levels: (1) how did Marx coinceive of the profit rate when he was discussing the tendency of the profit rate to fall; and (2) what conception of the profit rate ought we to adopt in analyzing the long run dynamics of a capitalist economy? So I don't see the question, as Anders does, as one of static versus dynamic modelling. Okishio addresses a useful queston that ought to be part of any dynamic analysis: what mechanisms influence the adoption of different technologies? At least in so far as the TSSI argument goes, it mainly has to do with how we conceive of the profit rate. If the profit rate is conceptualized as the long-period normal rate of return, Okishio's argument is entirely valid, though we ought to keep in mind that he is making a very limited technical point. On other conceptualizations of the profit rate, we might get different results, with different implication for how an economy functions. Some of these alternative conceptualizations may be useful for the particular problem at hand; Okishio's was useful for the problem in which he was interested. Gary
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