[OPE-L:2980] Re: Re: Re: Need 1 and Luxemburg's*Accumulation ofCapital*

From: Rakesh Bhandari (bhandari@Princeton.EDU)
Date: Tue May 02 2000 - 11:34:34 EDT

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Andrew and John (E),
Let's change the focus from capital/output ratios to constant and variable
capital per unit. Carchedi shows the possibility of a falling rate of
profit even as unit values decline simply because the constant rises in
relation to the variable capital per unit (though total value per unit
declines). That is, in Carchedi's framework constant capital per unit falls
though it still rises in relation to variable capital per unit. Despite
this kind of capital saving change at the unit level, there can still be a
falling profit rate (even with a constant real wage).

One can get a falling profit rate even if the value of the machinery
required to produce a given level of output is falling as long as this
cheaper machinery (relative to output) is also displacing direct labor at a
faster rate as well--and each capitalist has the incentive to adopt such
machinery because it allows him to reduce total labor costs per unit
whatever its large upfront costs--the rate of profit will fall even though
its impact is not immediately felt by the innovator.

I think Mattick/Grossmann's basic idea was quite similar to Carchedi's
models in Frontiers of Political Economy (verso, 1991, esp chs 2-4 or
Carchedi's Brenner critique in the latest Historical Materialism). But I
don't think Carchedi's demonstration of falling profitability from labor
saving change is the same as Andrew's, despite their shared hostility to
physicalism/simultaneitism. Is it?

Yours, Rakesh

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