Andrew
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Marx called the law of the falling rate of profit the most important law
of political economy. No one who adheres to an interpretation in
which valuation is simultaenous has ever refuted the Okishio theorem on
*value-theoretic* grounds. The moment someone does, then I'll be
happy to retract my claim that only the TSS interpretation *adequately
represents the quantitative dimension of Marx's value theory*. But
I'm not going to hold my breath.
Paul
----
Value theory is the wrong level of abstraction to approach this
question. Whether the rate of profit falls or not depends upon
the relative rates of growth of capital stock and of national income,
and upon the division of the latter between classes. If, to
compensate for inflation, we measure the capital stock in terms
of units of the national income generated per worker, then it
it is clear that, the division of national income between wages
and profits being constant, profit rates will be a negative function
of the capital stock.
Note that this form of argument is quite general and does not
depend upon acceptance of the labour theory of value, it can be
made simply as at the level of standard national income accounts.
The question then is whether the national capital stock, measured
in national income units, tends to rise or fall. This in turn is
a question of the aggregate rate of net investment. During periods
when net investment is high, the capital stock per worker, measured
as above, tends to rise. When investment is low it falls. But
unless one has a theory that explains the determinants of aggregate
net investment in an economy, you can say nothing definite about
the rate of profit.
For instance, during the last quarter of the 19th century, the
level of net investment in the UK was low, often barely positive,
in consequence the organic composition fell. During the 3rd quarter
of this century, net investment was much higher, there was a marked
rise in the capital stock per worker, and this was one contributory
factor towards a declining rate of profit - the other, and actually
greater factor, was the declining share of surplus value going
as profits.
It is futile to suppose that an argument posed at the level of
abstraction of value theory can have anything useful to say about
the differences between the period 1875 to 1900 and 1950 to 1975.
One needs to examine the historical specificity of the cases.
What was it that caused the rate of accumulation out of profits
to average around 40f wages and salaries in the former period
and around 10 0n the latter period?
I would suggest that one has to look at factors like the abandonment
of the gold standard, and the implications this had for the
deliberate manipulation of interest rates by the government.
The attempt by the state in the latter period to carry out
counter-cyclical economic policies which encouraged investment
by holding the promise of growing markets. The high rate of
investment carried out directly by state owned industries.
None of these factors can be deduced from value theory,
and unless the Okishio theorem tells us that rapid accumulation
is impossible despite such stimuli, I dont see how it has
any real relevance.
The tendancy of the rate of profit to fall is a conditional tendancy,
conditional on the rate of growth of capital stock being faster
than the rate of growth of the workforce. Since neither of these
rates of growth can be deduced from value theory, value theory is
the wrong level to approach the issue.