Here I respond to Paul Cockshott's comments on the discussion
between Duncan and me.
>Duncan(in a reply):
>
>The problem here is whether or not there is any relevant sense in which
>the system-wide rate of profit will fall with labor-augmenting and
>capital-saving technical change. If you plot the real wage-profit rate
>frontier in this case, you see that it moves uniformly to the northeast,
>so that it is hard to see how this type of technical change puts
>structural pressure on the capitalist economy.
>
>John comments:
>First, let me be clear. I attempted to point out that with "capital
>saving" technical change, the rate of profit in the TSS can fall.
>That is, in your terms, if we use the historic costs of constant
>capital in computing the rate of profit, the rate of profit can fall
>even as capitalists introduce techniques that are normally considered
>"capital saving." Given such a fall, I think it would be "relevant"
>to those making investments and seeing a decrease in their rates of
>return or profit rate. To be sure, I make no attempt here to argue
>that this does occur but merely point out that it can. If we
>ignore the "historic costs" and go with simultaneous pricing, this
>possibility is simply ignored. Thus, defenses of Marx's falling
>rate of profit focus primarily on "capital using" technical change.
>The "Great Leap Forward" is that this focus is needless with TSS.
Paul C states:
----
The losses on capital account due to devaluations can be a significant
factor, but recognition of their existence does not depend upon
accepting the TSS definition of value.
I show this in the paper on my web page relating to technical
change and the rate of profit.
Their significant effect is to
a. Reduce the total rate of profit but
b. To slow down the rate of fall of the rate of profit. This is a second
order effect arising because a lower rate of profit constrains
accumulation
and a reduction in the rate of accumulation slows down the rate of fall
of the rate of profit.
John now says:
I'm not sure how you get at this in your work but will check it out.
However, I think you will admit that historic costs play no role
in simultaneous models that are put forth as representations of
Marx. By considering patterns of accumulation in which the
output to capital ratio rises as the rate of profit falls, TSS
can obtain a result that is the opposite of that which SSS finds
in observing the same patterns.
Again, we are speaking of depreciation. As I attempt to
retrieve your paper, let me simply ask if this is depreciation
that capitalists know about or is it computed by the researcher?
I suppose I am asking for a summary of the paper to which you
refer as I have little confidence in my ability to access your
WEB page. (See postscipt.)
John (in reply to Duncan):
----
>
>I do not think that Dumenil and Levy are wrong but I am curious
>about their explanation of the how's and why's of the fall in
>the output-capital ratio.
>
Paul C. states:
----
One would expect this so long as accumulation was more rapid
than population growth in a developed capitalist society.
The question then is why accumulation should not be as nugatory
as modern European population growth.
John now says:
Like many others who have never worked up data on the macro level
as you have, I can offer little but constructive criticism to
that work. In that spirit, let me point out that one of the
things that comes up in my discussion with Duncan is the need
for data on the micro level or, more precisely, on the level of
the firm. That is, if we look at marco data and find a falling
rate of profit, why not look at the manner in which individual
investments brought this about? Too often, amateurs like myself
would take the result of an empirical study -- a falling rate
of profit -- and simply assume much about the individual
investments. Yet, as I have said to Duncan, in one industry --
mailing -- where I know a few of numbers, I never see a falling
output to constant capital ratio. Are there others where we
see this type of investment? Which ones? No doubt, we would
look at industries where wages are relatively high first. Has
anyone done this? If so, how can we use it to explain my
assumed result -- a falling rate of profit. Answers to these
questions might help get at the question you raise concerning
why accumulation is not as "nugatory" as population growth.
John
P.S. Can the article to which you refer be fetched via FTP?
For some reason, the WEB browser on this thing has been
defunct for the last few weeks. I used to be able to
get your WEB page with no problems.