This a brief response to Andrew's (3227).
1. Andrew argued:
I think it is the historical cost profit rate adjusted for changes in the
monetary expression of value that Marx says will fall.
Andrew, would you please specify the equation you would use for "the
historical cost profit rate adjusted for changes in the monetary expression
of value." Please clarify how constant capital is determined?
2. Andrew argued further:
I'm aware of the passage from Marx that Fred cited, and a couple of others
like it, which in Fred's interpretation indicate that changes in the MEV
will not affect the profit rate. I interpret these passages to be dealing
with a different measure of profitability from the one that Marx says will
fall.
There is not only one profit rate in Marx's work. For instance, he says
that rising productivity both lowers the profit rate and raises it. This
makes no sense if he had been talking about the same measure. Sense can be
made of this claim if one recognizes that the historical cost measure falls
while the replacement cost measure rises.
This raises important methodological issues in Marx's theory. I do not
think that Marx had both a historical cost rate of profit and a current cost
rate of profit (more on this to come in a later post). I know of no
explicit references to these two rates of profit and would appreciate any
such references.
Furthermore, Marx's statement that "rising productivity both lowers the
profit rate and raises it" does not require these two rates of profit to
make sense. One of the main passages where Marx made this statement is in
Section 2 of Chapter 15 of Volume 3. Here Marx's point is clearly that
technological change has both a positive effect on the rate of profit via in
increase in the rate of surplus-value and also at the same time has a
negative effect on THIS SAME RATE OF PROFIT (however it is defined) via in
increase in the composition of capital.
Comradely,
Fred