Steve K wrote in [OPE-L:3482]:
> In those cases, in effect, workers are issued with "chits" by one
> capitalist which are honoured by all others.
Well ... I don't think "chits" can serve as a substitute for money under
capitalism. Marx discusses this topic in the chapter on money in the
_Grundrisse_ re Darimon and Proudhon.
> The answer to (1) is also another reason why technical change comes
> after finance in this model: a whole raft of things have to be taken
> account of once you introduce technical change. But capitalism can exist
> in its absence, and capitalism requires finance to operate, technical
> change or no.
The thrust for technical change under capitalism is an expression of the
capital-form and the valorization process. On the simplest level, it is an
expression of attempts to increase relative surplus value.
Can capitalism exist without technical change? This is similar to asking
whether capitalism can exists -- over the long-term -- without
accumulation. While we can hypothesize a model of simple reproduction in
which there is no technical change or accumulation, this does *not* mean
that capitalism does not require technical change.
Does capitalism require finance to operate? Yes ... but, ...
(a) the requirement for finance by business firms is, in large part, a
function of business firm's needs for money capital *for* technical
change. In that sense, the analysis of technical change should happen
prior to the analysis of the financial sector.
(b) The funds that are needed for technical change (and expansion of v +
c) can be *financed out of the surplus value created in those firms*,
i.e. there is a source of *internally generated funds* for capital
expansion under capitalism. Of course, at a more concrete level, there is
a need for outside financing, but ... the question here concerns the
*logical ordering* of different determinations of the accumulation
process.
> Introducing technical change is "simply" a matter of allowing the A
> matrix and L vectors to alter from one period to the next, but there are
> lots of issues about how one does that (is technical change a sigmoidal
> function of profit, for example; how does change of the A matrix and L
> vector relate to movements in commodity prices and the real wage?).
> Such a model is always going to be a pale imitation of technical change
> in the real world, in any event. You have to maintain the fiction of a
> fixed number of aggregated sectors, when in the real world, technical
> change results in new industries (aeroplanes, computers, robots, etc.)
> which simply didn't exist in earlier times.
I agree that there are lots of issues associated with modeling technical
change, but that is not a sufficient reason to not undertake that
investigation. You seem to be saying that it would be very difficult in
practice to mathematically model technical change. I agree, but I again
insist that the desire for mathematical simplicity must take a back seat
to *theoretical* considerations. In other words, we can't begin, IMHO, by
saying: let's build a determinate math model. We have to, instead, first,
examine the subject at hand and _then_ *ask* _whether_ it can be expressed
in a formal math model.
In Solidarity,
Jerry