A brief thought on the recent exchange between John Ernst and
Fred Moseley. Seems to me there may be a micro/macro issue at
play here. Suppose we have one particular industry displaying
exceptional technological process, and that intra-industry
competition forces a rapid pace of renewal of the means of
production in that industry. In order for that industry to
garner the normal or average rate of profit, the selling price
of its product will indeed have to "cover" the expense of
replacing the means of production before they are worn out.
This effect will tend to raise the price -- a partial offset
to the lowering of price due to the underlying reduction of
current socially necessary labor time, period by period. This
is a micro effect: it proceeds via the transfer of surplus
value from other industries, as in the usual equalization-of-
profit-rates argument (the actual validity of which is a matter
for discussion some other time).
But then the question is: Can we envisage any counterpart to this
at the macro level, if _all_ industries are showing rapid
technical progress in the means of production? It's not at all
clear how that would work; and certainly the mechanism would
have to be quite different.
Allin Cottrell
Department of Economics
Wake Forest University