Duncan says:
>
> John now says:
> 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.
> Further, since outputs can grow faster than inputs in TSS, it
> forces Marxists, using TSS as a defense of Marx, to take seriously
> the issue of effective demand. In other defenses, there is little
> need to consider effective demand.
Duncan comments:
The main issue here, as I understand it from discussions with Andrew, is
which profit rate, in two senses: 1) which one was Marx thinking about and
2) which one is relevant for understanding the evolution of capitalist
production? I don't agree that the TSS interpretation of value theory is
at the root of these results about the FRP, which depend instead on a
particular definition of the profit rate that falls.
John now adds:
I am a bit unclear about your comment. In my own muddled way
I have simply pointed to a type of technical change that can lead
to a falling rate of profit defined within TSS. Is this what
you mean by a "result" ? While I do want to understand what
you are saying here, I will share with you my current understanding
of your position.
I think that as a result of the Dumenil and Levy work you see
no need to move to a TSS definition of the profit rate. That is,
they show results compatible with Marx without any such movement.
Coming from that perspective, I would also add that should
the usual rate of profit rise or stay the same and the TSS rate
fall, why bother with the TSS rate?
While I cannot speak ex cathedra for the TSS school, I
will say that TSS allows us to make still another "great
leap forward" -- beyond the falling rate of profit to the
accumulation process itself. That means that we can begin
the investigation of matters like the turnover of fixed
capital and the periodicity of crises. To be sure, this
type of work has barely started as most treatments of Marx
abstract from fixed capital entirely or include fixed
capital which never depreciates within structure of
production models.
______________
You have piqued my curiosity about Dumenil and Levy and I
have ordered their book. I will also track down their
article to which you referred. As I await delivery of the
text from Vermont, let me ask how, in your judgment, can
their efforts be used to develop a picture of the individual
investment decisions that bring about the macro trends
they find?
John