The current discussion about profit equalization
is interesting and gave me a chance to consider
the matter.
I tend to relate the issue to the problem of fictitious
capital. First, I think that the exsistence of fictitous
capital has to be assumed at the principle level.
That is, we shouldn't exclude examining the relation
between the function of fictitous capital and the tendency
of profit equalization.
Questions are rambling around my brain.
1. How can we argue the relation between
price of fictitous capital and mobility of capital?
For example, does new issue of equity expand
if its price rises due to rising profit rate? If its price
*has risen* enough to lower *the expected rate
of return*, is there no reason to believe that capitalists
to lay more money to it?
As in my empirical work on japan's stock market,
however, stock price and new issue of stock correlate
in the span of construction cycle, at least. Or they
seem somewhat correlate over individual issues at a business
boom.
I guess the rise in stock (or any other fictious capital)
price should be addressed as *a process* as well as
we should treat mobility of capital as a process.
2. Does the mechanism of fictitious capital market lead to
a static state where *the profit rate* of any capital in money
form equalises? If this is not the case, what causes the
instability? Is the cause only the instability of profit of
industrial capital ? or may we ignore any feed-back effect
from fictitious capital market to industrial capital?
I guess some feed-back effect connot be ignored.
Does anyone solve my headache?
in OPE solidarity,
Iwao
PS my questions are (a) type classified by Alan[2247], I believe.
----------------------
Iwao Kitamura
mailto: ikita@st.rim.or.jp