(snip)
I start with the issue of equalization.
If one tries to test empirically Marx's proposition of the tendential
equalization of the interindustry profit rates (in a period of fat and
lean years) by just examining the long run tendencies of interindustry
_average_ rates of profit it is likely to find convergence of
interindustry profit rates around the general rate of profit. This
appears to contradict the tendential equalization of profit rates
argument.
My comment: Can you explain this a bit more.
Tsoulfidis Lefteris wrote:
The trouble, however, with these studies is that they do not really test
Marx's idea. In Marx the equalization of profit rates takes place only
for the regulating capitals (see also Botwinick 1993), which in general
differ from the average. An example could be in agriculture where the
regulating capital is the marginal capital which of course differs
substantially from the average.
My comment: I have even more questions about this.
1. When Marx transforms values into prices of production, is it only
the regulating capitals to which he refers?
2. Is the regulating capital *always* the capital that is most profitable?
Or, might there be exceptions in, for example, agriculture?
Tsoulfidis Lefteris wrote:
The operationalization of the concept of regulating capital and the
associated with it profit rate is discussed in (Shaikh: The Stock Market
and the Corporate Sector, 1995) but also in Christodoulopoulos
(dissertation 1996) where it is found that there is equalization of
profit rates for the regulating capitals for several industries
internationally. In a book published recently in Greek (Issues in
Political Economy: The Case of Greece. co-authored by Maniatis, Tsaliki
and Tsoulfidis. It is shown that there is interindustry equalization of
profit rates for the regulating capitals and not necessarily for the
average capitals.
My comment: Again, questions.
1. Where do we find the theoretical argument for the concept of
regulating capital?
2. I'd like to check out the Shaikh piece. Where is it published?
John