A reply to Bruce's ope-l 1605. Bruce says he thinks he knows where we
differ, but I'm not so sure from his precis of my (temporally) prior
response.
My main point was that, in Marx's theory, rising (falling) productivity
leads to a falling (rising) rate of profit. The TSS equations show
this. Simultaneist equations do not. Bruce didn't respond to this.
It is possible that Bruce and others have a different interpretation from
me concerning what Marx meant when he claimed that the profit rate falls
not because labor becomes less productive, but because it becomes more
productive. So I asked what he (and other simultaneists) make of Marx's
statements to this effect. Bruce hasn't responded to this (nor has anyone
else).
Bruce's precis of my interpretation of Marx's reasoning as to why
capitalists mechanize although it lowers profitability is in the
ballpark. But Bruce seems to imply that I "hint at" instead of
forthrightly acknowledging that rising productivity lowers the value
of wages and thus increases the mass and rate of surplus-value. No,
I claim this is precisely what Marx says. (But I deny that he says
the value of wages *already* paid can fall; my response to Bruce noted
that this issue, retroactive revaluation, is where we differ regarding
the production of relative surplus-value.) More importantly, Bruce
omits from his precis the argument (made by Marx, which I repeated) that
the innovating firm gets superprofit when it mechanizes, so the
mechanization cuts the other firms' throats, not its own. Hence, there's
nothing stupid or shortsighted implied about the capitalists when Marx
says that they mechanize although this lowers the profit rate.
Bruce also says I have something against iterating the TSS model. I do
not. All I say is that general results can not be drawn from the
"final solution." I have ABSOLUTELY NOTHING against the SSS equations
when interpreted as a special case of the TSS equations, i.e., when
one doesn't try to draw general conclusions from the SSS equations.
I have nothing against going through an analytical exercise that
shows, for instance, that falling productivty will tend to raise the
value of wages in the *future*, and thus lower the rate and mass of
surplus-value and the profit rate in the *future*. Iteration can
certainly aid in such an investigation, though it really isn't
necessary, since, for instance, in Bruce example, it is possible to
reach this conclusion on the basis of the rise in the output price
of corn over the input price in the 2d period. But if one wants to
iterate, fine by me. Just don't call the terminus "the" "solution."
What is still *very* unclear to me is what Bruce has against the
TSS interpretation of Marx's value theory as a representation of the
actual process of valuation and pricing in real time. If the SSS
equations are not meant to be what really happens, and if equilibrium
(in the sense of uniform profitability, supply = demand, balanced
reproduction) does not require stationary prices, then what is
inaccurate about the TSS value and production price equations (for
instance)? Does it all come down to a "definition" of the prices
of the inputs as being "replacement cost" prices? And if so, how
do you justify this reading of Marx when it can't replicate his
theoretical results concerning, e.g., the FRP?
Andrew Kliman