Dear Chai-on,
Thanks for the question. As I was composing a response to
one of Duncan's posts, I began to get lost as well.
You wrote:
On Wed, 27 Mar 1996 conlee@chonnam.chonnam.ac.kr (chaion lee) said:
>Dear John,
>Isn't the first rate of yours identical to the third of yours? I think it
>is identical with each other. If it is not, could you explain the
>difference please?
>With regards,
>Chai-on
>
This was in response to my question
3. When we speak of the falling rate of profit, about what rate of profit
are we talking? The equilibrium rate? Andrew's? The "ex ante" one?
Ok. Andrew's rate can be called the historic rate (for now). With the
equilibrium rate, input and output unit values are equal. Here, I mean
that the labor content imputed to a given commodity are equal and,
barring technical change, will not change.
If you use Andrew's output values to evaluate a new technique for
the next period, the assumption by the capitalist would be that the
input and output prices for that next period would be equal. But
despite that equality, since the values are changing as we are
using historic or reproduciton valuation, the ex ante and equilibium
rates for that period will not be equal. Note how the rate of
profit kept changing in Massimo's example as he extended it for a
number of periods. Bruce had taken that to be a process of iteration
until an equilibrium was reached. But if we were to call it the ex ante
rate of profit until it is reached, that rate clearly differed from the
equilibrium rate.
John
In Solidarity,
John