I have no argument with the substance of Michael's reply, reproduced below:
technological change can make profitability a tightrope for firms. Where I
differ is in arguing that this tightrope occurs, not because of declining
value productivity, but because of its impact on the conversion of surplus
value into profit. It is a problem of realisation of surplus, not its
production.
Cheers,
Steve
>Steve Keen wrote:
>
>> However if the machine not only physically depreciates but also suffers from
>> technological obsolescence, then *less than* the entire value used up in its
>> production is transferred to the product, and the capitalist is in fact
>> making a loss out of fixed capital. It sounds like capital is walking a
>> tightrope just above extinction at the hands of technological change. If
>> this rate gets too high, then it is possible that the loss from
>> technological obsolescence could wipe out the profit from the exploitation
>> of labor, leading to a loss overall.
>>
>
>Like Andrew, I agree that the tightrope image is true, not nonsense. In
>my End of Economics, I show that U.S. economists of the late 19th c.
>believed very strongly in this idea. I think of them as proto-marxists,
>even though the came after Marx, because their work seemed to be a crude
>version [at least part] of Marx's theory of crisis.
>
>Technical change was indeed wiping out firms. These economists founded
>the American Econ. Association to promote this idea in opposition to the
>theory of neo-classical economics, although these same economsits were
>among the most prominent neo-classical economists at the time. They
>were neo-classical in their theory, but against it in their practice.
>They wanted trusts, cartels and monopolies.
>
>Schumpeter copied their ideas [and Marx's] and presented them as his
>own.
>--
>Michael Perelman
>Economics Department
>California State University
>Chico, CA 95929
>
>Tel. 916-898-5321
>E-Mail michael@ecst.csuchico.edu
>
>
Steve Keen
Senior Lecturer
Economics & Finance
Faculty of Business & Technology
University of Western Sydney
PO Box 555 Campbelltown NSW 2560
Australia
s.keen@uws.edu.au (046) 20-3254 Fax (046) 26-6683
Home: (02) 9558 8018
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