In response to Duncan's post, Paul Z. writes:
>it is very important to take the rate of surplus value as fixed in
>analyzing the falling tendency of the rate of profit. In the context of
>production of relative surplus value it does indeed mean rising real
>wages. The falling tendency is then an expression of the technological
>bias in capitalism toward cheapening goods consumed by workers (reducing
>the value of labor power--e.g. the famous textile revolution) which class
>struggle can redress to stabilize the portion of the working day
>returned to workers. Assuming s/v fixed is assuming a stabilized (in some
>sense) relation of capital to labor.
>
>I always find it useful to write the rate of profit r from s/(c+v) to
>s/v divided by c/v+1 and rewriting the divisor to
>
> c v + s c
>------- ------- + 1 = ----- [1 + s/v] + 1
> v + s v v + s
>
>
>Thus, with s/v fixed, the movement in the rate of profit depends upon
>movements in c/(v+s), the technical value composition of capital, the
>ratio of labor time in fixed capital to the living labor time working with
>it (rising implying falling r).
The necessity for holding s/v fixed confuses me. Consider the standard
formulation for the average rate of profit:
r = s/(c + v).
Even we assume a maximal rate of exploitation, i.e., s/v = 0, it is still
the case that "the movement in the rate of profit depends upon movements in
c/(v+s), the technical value composition of capital, the
ratio of labor time in fixed capital to the living labor time working with
it (rising implying falling r)." Under maximal exploitation, we would have:
r (max) = l/c.
Clearly, as the technical composition of capital increases the maximal rate
of profit will fall. Since this is in fact the maximum potential rate of
profit the argument is independent of any assumption regarding the rate of
exploitation.
peace, pat mason