[OPE-L:4443] RE: analysing the rate of profit (formerly, Mandel vs. Baran/Sweezy)

Tsoulfidis Lefteri (lefteris@macedonia.uom.gr)
Wed, 19 Mar 1997 08:23:47 -0800 (PST)

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> In message Wed, 12 Mar 1997 05:45:39 -0800 (PST),
> Alejandro Valle Baeza <valle@servidor.dgsca.unam.mx> writes:
>
> > 1. If v -->0 then s/v --> infinite. It means that the surplus is infinite
> > IN RELATION TO VARIABLE CAPITAL. It does not mean anything more. It does
> > not mean that surplus is infinite.
> > 2. If v -->0 then s/(s+v) --> 1. It means (as Marx said) that the
> > surplus value cannot be greather than the working day.
> >
> > 3. Both propositions are true. You need to choose one for the specific
> > problem you are dealing with. If you are analizing the rate of profit and
> > you write:
> > r= (s/v)/(c/v+1) the limit of r when s/v and c/v --> infinite is an
> > INDETERMINATE form (infinite divided by infinite). Hence you are not
> > finding ANY limit of r.

The third proposition is not exactly right, while it is true that

lim r with v->0 gives infinite/infinite,

but in these cases it is important to know how fast the numerator and
the denominator grow. For this reason we apply L'Hospital's rule and we
get:

lim r with v->0 =[-s/v^2]/[-c/v^2]=s/c

The same result is obtained if we divide the numerator and the
denominator of the usual formula of the rate of profit by labor time
L=s+v. Thus we get:

r=s/(c+v)=[s/(s+v)]/[c/(s+v)+(v/(s+v)]

if v->0 => s=L and we get r=1/(c/s)=s/c=L/c=maximum rate of profit.

Of course it is imperative to use labor time as this is indicated in
points (1) and (2) and also in the formula for the rate of profit above
in order to have a more concrete idea of the limits of the rate of
surplus value, the rate of profir and their interreconnections.

In solidarity
Lefteris

>