Duncan wrote in part:
The historical path of the rate of profit is consistent with a pattern of
what is sometimes called "Marx-biased", that is labor-augmenting,
capital-using, technical change at the macroeconomic level, together with a
very slowly falling value of labor-power (or, equivalently, very slowly
rising rate of surplus value.) There is also considerable macroeconomic
evidence for this pattern (probably most completely set out in Dumenil and
Levy's work.)
John responds:
Correct me if I am misreading the notion of the "historical path
of the rate of profit", but is not that rate of profit
computed on the basis of what we have been calling "current
costs"? To make our "models" conform to this type of falling
rate of profit, it would seem that we would have to include
something for the real wage.
I have no doubt that there is considerable macroeconomic evidence
for this pattern. However, there is scant evidence on the micro
level in the period of large scale industry. Thus, if we are to
connect with observed pattern of a "current cost" rate of profit
with a theory of capitalist investment behavior that explains it,
much work is to be done.
Duncan says:
I gather from your previous posts that you have some doubts that real
capitalist technical change has this "Marx-biased" character. It might be
fruitful for us to discuss this point further.
John responds:
You're right. Indeed, my doubt is considerable. I base it on
experience and a reading of Marx.
1. I work with printers and folks in the mailing industry. I have
yet to see or hear of anyone selling a machine or a set of machinery
that does not increase output more than the increase in the
investment. To be sure, this is only one small part of the economy.
Yet, when I asked for examples of these types of investments, only you
Michael P. , and Paul C. responded. You spoke of the replacement of
weaving by hand with machines. You also suggested that some changes in
the auto industry might furnish an example. Michael pointed to the
chemical industry and noted that some of the fixed capital investment
was especially durable -- economically and physically. Paul claimed
that I should be comparing the increase in the value of outputs with
that of inputs as he pointed to the airline industry.
I do not mean to dismiss Michael's, Paul's or your examples as
insignificant. But I do think if we are to even suggest that
investment takes place on the micro level that immediately
conforms to the "Marx-biased" pattern on the macro level,
more examples should would be forthcoming.
2. At this point, I tend to think of what refer to as "Marx-
biased" technical change as "Engels-biased." I say this on
the basis of my reading of CAPITAL, Vol 3, Ch. 15, Sec.4. In
the first few paragraphs we find Marx asserting that the
growing investment in fixed capital is outstripped by the
growth in output. Engels then steps in and seems to
contradict Marx. As he writes, Engels describes on the
micro level the type of technical change that is now
generally called -- "Marx-biased."
In that Vol.3, we find Marx referring to the growth rate of
raw materials as equal to that of output as productivity
increases. Both grow slower than machinery. (pp 108-9,
Int. Edition or Ch.6, Paragraph 10)
_____________________
Further Thoughts.
Are we really ready for discussion of the form of technical
change(s) within the period of large scale industry? As
I suggested in an early post, both TSS and its critics have
some explaining to do. In no example, have we clearly explained
why prices fall. We assume that they do. One might say that
the debate is about the extent of the fall. Further, given
that prices fall, we in the dark about the consequences.
That is, does it have any affect upon capitalist investment
behavior? Are we assuming a crisis and not acknowledging it?
JohnFrom ope-l@anthrax.ecst.csuchico.edu Fri Oct 4 12:45:56 1996
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Date: Fri, 4 Oct 1996 12:45:56 -0700 (PDT)
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From: Alan Freeman <A.Freeman@greenwich.ac.uk>
To: Multiple recipients of list <ope-l@anthrax.ecst.csuchico.edu>
Subject: [OPE-L:3270] RE: Ethics: TSS and value added
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I have no objections
Alan
----------
From: S.Mohun
Sent: Friday, October 04, 1996 1:09 PM
To: Multiple recipients of list
Subject: [OPE-L:3263] Ethics: TSS and value added
Does anyone mind if I let a beginning PhD student of mine, who wants to work
on the rate of profit, study the IVA, TSS, Value Added debates that are
currently underway?
Simon
Simon Mohun,
Dept of Economics,
Queen Mary and Westfield College,
Mile End Road,
London E1 4NS,
UK
Telephone: 0171-975-5089
Fax: 0181-983-3580
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