In reply to 3956: "The case where labour-saving technical progress is proceeding at a rate g is formally identical. Again it calls for "marking up" the past labour input in forming rational plan prices. There's one twist: with labour-saving technical progress you'd get the right prices by using historic labour embodied rather than the VILCs computed in terms of the current I-O matrix." Well this is neat. Only if commodities sell at the labor historically embodied in them, rather than the socially necessary labor time to reproduce them presently, will the market clear at equilibrium. This is of course no point at all since the output produced in terms of the VICLs of the current I-O matrix is not even available to compete. So this is dynamic in the sense that we have quantities in time subscripts allowing us to determine unknowns, e.g, equilibrium prices, as they unfold in terms of one equilibrium state following upon another. A kind of dynamic comparative statics, I suppose. This also has nothing to do with Marx's vision of how the capitalist process works. In your example, the only wine or grape juice available at any point will have been produced at the same time, under the same conditions. That is, built into this example has to be the unrealistic condition that the fixed capital used in wine or juice production turnover entirely with its commodity output. But what happens one year into wine making (t-1), another more advanced winery (b) is set up on the basis of technologies which will last longer than the two year production period while the older winery (a) at the point of its renewal (t) has recourse to even more advanced technique. Though the new winery (b) will sell alone at (t+1), both wineries (a and b) will compete at (t+2). In order to ensure amortization of its investment, b will have to have as much output to sell at (t+1) as possible. This means it will have to resort to overwork and intensification of the labor process. Hence, the cruel paradox of machinery. All this is obvious once we drop the assumption of the annual or periodic turnover of fixed capital, which again Marx only used to simplify the reproduction schema in order to show the *possibility* of growth without permanent underconsumption; the assumption was not meant as a controlling methodological postulate. Aside from the already quoted passage which shows that Marx was not up to such unrealistic exercises as Wiseacre and Samuelson, consider this one from later on in Capital 1: "science and technology give capital a power of expansion which is independent of the given magnitude of the capital actually functioning. They react at the same time on that part of the original capital which has entered the stage of its renewal. This, in passing into its new shape, incorporates, free of charge, the social advances made while its old shape was being used up. of coure, this development of productivity is accompanied by a partial depreciation of the functioning capital; but in so far as this depreciation makes itself acutely felt in competition, the main burden falls on the worker, in whose increased exploitation the capitalist seeks compensation for its loss." p. 754 So the episodicness of technological innovation is overcome by the "endogenization" of science and technology over time. This of course is meant as a reply to 3959 Yours, Rakesh
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