From: Jerry Levy (jerry_levy@VERIZON.NET)
Date: Sun Jan 13 2008 - 10:20:22 EST
Hi Jurriaan: Your reply to Paul C answered some questions I was going to ask. Thanks. > 2 - we could include U in the denominator, rather than the > nominator, as a capital cost; in that case, every increase in U > will indeed lower R. One has to account (literally) for (at lesst) two different types of U: 1] U internal to a firm and part of a circuit of capital; 2] U external to a firm in the sense that it represents labour employed by the state. 1] Could be included in the denominator for the formula for individual rates of profit. 2] could be taken to be a transfer of s from capitalists to the state thru taxation - and hence, indeed, a deduction from the numerator in the formula for individual r's. Insofar as the benefits (e.g. subsidies) from the state to capital that you mentioned in a previous post are concerned, this could be seen as a redistribution of s among capitalists by the state and hence would lower the relative tax burden of one group of capitalists while increasing the relative tax burden of other capitalists (and non-capitalist taxpayers). This, by itself, wouldn't alter the magnitude of aggregate s but would alter its distribution. We should also distinguish between _nominal_ individual rates of profit and _after-tax_ individual rates of profit just as personal income is distinguished from disposable income in national income accounting statistics. Just as disposable income is a more relevant statistic for explaining changes in the propensity to consume so to changes in after-tax rates of profit are more relevant for explaining changes in investment behaviour. In solidarity, Jerry
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