[OPE-L:3116] Re: Re: Re: Re: Re: Re: Re: re:starting points

From: Rakesh Bhandari (bhandari@Princeton.EDU)
Date: Thu May 11 2000 - 04:08:47 EDT

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My dear Gil,

I have no intention of playing the useful idiot here for you to prove that
only Roemer has a logically complete critique of the use of neoclassical
theory to justify the market's absurdly unequal distribution of income or

 Here's a rather superficial reply to your detailed post which others I
hope take up, interest and time permitting.

> Bourgeois theory *does not* predict
>that market competition will tend to eliminate surplus value, as Marx
>defines the term.

Of course interest or profit has to be explained even by bourgeois theory.

As Duncan points out in Understanding Capital (p.47), the neoclassicals
attempt however to explain "surplus value" as, to use my shorthand, a
diachronic *exchange of equivalents*.

I understand that there is some confusion in bourgeois economics about
whether interest is to be understood in productivity or purely temporal
terms. Duncan seems to understand the neoclassical apologia of interest in
its essence as a purely based in time preferences, though perhaps
productivity will affect the actual magnitude thereof.

However, there is no exchange of wages against time; wages are only a
ratification of time already spent--which is clear to workers who never get
wages because the firm went bankrupt before the first payday payday. . Plus
the firm owners, madly using the overdraft system, are hardly sacrificing
their income.

Since rents and normal profits have technically precise meanings, I won't
comment on your next point.

Let me just skip ahead to this which confuses me greatly.

  Relevant picture: imagine a competitive market for something
>called "capital services" with a reverse L-shaped supply curve, and imagine
>an equilibrium in which the demand curve for these services crosses the
>vertical portion of that supply curve, ensuring rents to even the marginal
>capital supplier.

So the scarcity of capital explains the phenomenon of interest!

What then is the source of the supply of this capital? Why is there a
shortage of this capital? Instead of pursuing the formation of this capital
to its birthplace--the sphere of production--you are just bogged down in
sphere of circulation with the rest of the economists. To say that capital
is in short supply only means that in the course of accumulation the
primordial source of this capital, surplus value in Marx's precise sense,
has become progressively more scarce. See Marx's theory of FROP.

>[And yet they can "wait" for the wages they're paid only *after* they've
>labored, as you remark below?]

Because they draw from savings or take usurious consumption loans.

Maybe in the morning, I'll try the rest...

Yours, Rakesh

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