I thank Ajit for his ope-l 5267. It was intended to show that my reading of
the passage is "100[%] false," but it in fact supports what I said 100%!
Ajit writes: "Surplus value remains the same in both the situation[s]. In
all the cases revenue will only be a part of the surplus value as long as the
system is expanding. Only in the case of simple reproduction, the revenue
will be equal to surplus value. And WHEN REVENUE EXCEEDS THE SURPLUS VALUE,
then it means that the capitalists are eating up their capital, and in the
long-run the system will no longer exist. That's why this case is considered
not viable for a long run analysis" (caps added).
Yes, WHEN revenue exceeds the surplus-value, the capitalists are indeed eating
up their capital. Disinvestment in value terms DOES occur, and, as Ajit very
rightly suggests, this implies that WHEN it does, revenue exceeds
surplus-value. That's exactly my point. As I've noted, Fred's reasoning
implies that, because new capital is "part" of surplus-value, net capital
investment cannot become negative, and so capitalists can never disinvest in
value terms!
IF revenue were to exceed surplus-value persistently and indefinitely, THEN in
the long run the system would no longer exist. Yet Ajit tacitly acknowledges
that revenue can exceed surplus-value by accident, or occasionally: this is
completely sufficient for what I'm claiming. Fred held that revenue can NEVER
exceed surplus-value, by "definition*, and Ajit acknowledges that this is
untrue.
In any case, Ajit's binary opposition between the accidental short run and the
steady growth of the long run is false, as is the implication that, once we
get to the "long run," surplus-value must always be greater than revenue. His
comments evince a lack of awareness of economic cycles (and, in general,
anything other than momentary accidents and long run equilibria). Consider
the following difference equation system, in which W[t] indicates the total
value of year t,
W[t+2] = 1.5*W[t+1] - W[t] + 13*(1.02)^t,
in which the value of output is a constant 10/9ths of the value of
(circulating) capital consumed during the year (W[t] = (10/9)*C[t]), and in
which the initial conditions are W[0] = 30 and W[1] = 33.
Revenue at the end of year t is R[t] = W[t] - C[t+1]. Surplus-value of year t
is S[t] = W[t] - C[t]. Looking at the first 100 years (0-99), revenue exceeds
surplus-value in 37 of them: 2-4, 10-13, 19-22, 28-30, 36-39, 45-48, 54-56,
63-65, 72-73, 80-82, 89-90, 98-99. Yet *on average*, surplus-value exceeds
revenue (by 1.43 per year, on average) and the average year-to-year growth
rate of W is 2.04%.
Andrew Kliman