Andrew argued that Marx used more than one rate of profit in
his theory:
I think Marx uses "profit rate" in more than one sense.
With respect to the issue, there are at least two rates of
profit to consider, the actual (realized, ex post) profit rate
of the past and the potential (ex ante) profit rate of the
future.
However, there is never any explicit statement in all of Marx's
writing that he is considering more than one concept of the rate
of profit.
In Part 1 of Volume 3, Marx introduced his concept of the rate
of profit, and then discussed the relation between the rate of
profit and the rate of surplus-value and the effect of changes in
the prices of raw materials and machinery, etc. (i.e. the
"cheapening of the elements of constant capital") on the rate of
profit. In all these chapters, Marx discussed the rate of profit,
with never a hint that he is "using the rate of profit in two
different senses." In Chapter 6 in particular, Marx argued that
the cheapening of the elements of constant capital raises the
rate of profit, because it reduces the stock of constant capital in
the denominator. Marx clearly and explicitly argued that this
positive effect on the rate of profit of a cheapening of the stock
of constant capital applies both to newly invested capital and to
"previously existing" capital. I have presented these passages
in previous posts, so I donąt need to present them again here.
There is never any hint that there is a second concept of the
rate of profit, for which the stock of constant capital in the
denominator is valued in historical costs, i.e. that the
previously existing capital is NOT revalued as a result of
technological change.
In Chapter 7, Marx briefly returned to this point in one of his
"supplementary remarks". Here he stated very clearly and
unambiguously that, for the rate of profit he is talking about,
the stock of original capital advanced - the denominator in the
rate of profit - is revalued as a result of technological change.
To repeat again one sentence of this key passage:
If the changed circumstances mean that twice as much
time, or alternatively half as much, is required for the
same physical capital to be reproduced, then given an
unchanged value of money, THIS CAPITAL, IF IT WAS
PREVIOUSLY WORTH $100, WOULD NOW BE WORTH $200
OR ALTERNATIVELY $50. (C.III. 238)
The original capital advanced is not "spirited away," but it is
revalued.
In Part 2 of Volume 3 about prices of production, the
distinction between current costs and historical costs is not
relevant because constant technology is assumed.
Then in Part 3 on the falling rate of profit, the question is the
effect of technological change on the rate of profit, again with
no hint that Marx is using the concept of the rate of profit in
two different senses. In Section 3 of Chapter 14, on the
"cheapening of the elements of constant capital" as a
"countertendency" to the decline of the rate of profit, Marx
referred back to his earlier discussion in Chapter 6 and
reiterated the point already developed that this cheapening of
the elements of constant capital increases the rate of profit, i.e.
serves as a "countertendency". He also clearly reiterates that
this cheapening which acts as a countertendency applies both
to the newly invested capital and to the previously existing
capital. There is no indication that there is a second concept of
the rate of profit which refers only to previously existing
capital and which is valued in historical costs.
It also should be remembered that Marx paid a great deal of
attention to the "development of concepts", or categories, in
good Hegelian fashion. (This is one of the main points
emphasized by Enrique Dussel in his path-breaking trilogy,
unfortunately for us in Spanish, on Marx's economic
manuscripts.) Marx carefully and rigorously derived profit and
the rate of profit as more concrete forms of surplus-value and
the rate of surplus-value. Are we to believe that he also used
the concept of the rate of profit in a second sense without
explicitly saying so? I don't think so.
2. The above explains why I was still unsure in my previous
post about Andrew's interpretation of the valuation of constant
capital and the rate of profit in the case of a change in the
value of money. I was assuming, as argued above, that Marx
had only one concept of the rate of profit, and I wanted to
know whether, in the case of a change in the value of money,
Andrew interprets Marx's concept of the rate of profit to be
valued in current costs or in historical costs. Instead Andrewąs
reply discussed four different interpretations of the rate of
profit in the case of a change in the value of money, and I
wasnąt sure which one Andrew was attributing to Marx. Now I
realize that he is probably attributing more than one
interpretation to Marx. But, as in the case of a technological
change, these is no textual evidence that Marx used two
different concepts of the rate of profit in the case of a change in
the value of money. Every single time that Marx discussed the
effect of a change in the value of money on the rate of profit,
he argued that the stock of constant capital in the denominator
is revalued along with the surplus-value in the numerator, so
that the rate of profit is not affected. So Marx's treatment of
the valuation of constant capital in the case of a change in the
value of money is consistent with his treatment of the
valuation of constant capital in the case of technological change.
In both cases, Marx's concept of the rate of profit is valued (or
revalued) in current costs.
I look forward to further discussion.
Comradely,
Fred