Jerry,
You posted the following, beginning with a statement
I made:
John wrote [OPE-L:617]:
> By failing to distinguish between these two
> distinct forms of technical change, much
> confusion arises in FRP discussions. The
> "labor saving" form of technical change is
> given emphasis to assure a fall in the FRP,
> while the other form is deemed non-existent
> or, simply, ignored.
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Jerry wrote:
Please explain:
(a) *how* this distinction regarding differing forms of technical change
has led to "much confusion" in discussions concerning Marx's "law of the
tendency for the general rate of profit to decline" [LTGRPD] (*specifying*
different examples of this "confusion" in the literature following Marx).
<snip>
Response:
In May 1974, Paul Sweezy published a criticism of those
who argued that Marx's falling rate of profit (FRP) was
still relevant to an economy dominated by large scale
industry. (See Monthly Review, May 1974) For Sweezy,
the idea that the introduction of machinery as a
replacement for living labor increased the ratio of
c/v was not a problem. Given a constant rate of surplus
value, the rate of profit falls. Sweezy then goes on
to note that as machines replace machines there is no
reason to suspect that the ratio of c/v would increase.
He notes that Marx did not anticipate the period
of what he called "machinofacture." To be sure, Sweezy's
criticisms are not unique. (See Dobb, Muschaiva, Robinson,
etc.) Nor did he claim they were. Yet in reading
CAPITAL, we see that
a. Marx does describe the replacement of machines by
machines. (See Chapter 15 of Book III, Sec. 4, para
1 and 2.)
b. Marx was well aware that machinery itself would
be mechanized. (See Chapter 15 of Book I, Sec. 1, para
17-19.)
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Now one could get into some sort of debate with Sweezy and
insist that "labor saving" technical change dominates
the capitalist accumulation process and, therefore,
the FRP is still valid and relevant. The issue is then
centered around the movement of the rate of surplus value,
which gives discussions of the "Okishio Theorem" added
meaning.
What too often has been ignored in various debates is
the notion of valuation itself. That is, as one locates
a FRP, is it based on historic or simultaneous valuation
of the inputs and outputs? Clearly, most value the
constant and variable capital simultaneously, not
historically. As you know, I have argued differently
and simply point out that had Marx used simultaneous
valuation, he would be deemed and should be seen as
a highly overrated student of political economy.
Note that with historic valuation, both types of
technical change can be incorporated into a description
of the accumulation.
By using historic valuation, it is a relatively simply
matter to demonstrate the possibility of a FRP. Crucial
to that argument is the mechanism of crisis itself. In
other words, the most logical way of dealing with the
FRP is to see as part of a crisis ridden accumulation
process in which the crisis "makes manifest" the FRP.
Thus, "orthodox" Marxists, who defend Marx on the basis
that technology is predominately "labor saving", adopt
and perpetuate the confusion that valuation is
simultaneous.
Jerry wrote:
(b) *how* you believe this distinction relates to the LTGRPD and periodic
crises.
One specific relation between the two concepts, LTGRPD
and periodic crisis, is that the latter brings into
existence the former and not the former, the latter.
For now, I am simply assuming periodicity in my own
work and only attempting to work out its hows and
whys.
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