[OPE-L:4325] Re: Re: Re: Re: Re: Re: Part Two of Volume III of Capital

From: Rakesh Narpat Bhandari (rakeshb@Stanford.EDU)
Date: Fri Oct 27 2000 - 08:51:59 EDT

>On Tue, 24 Oct 2000, you wrote:
>>  Re Allin's 4258
>>  >On Tue, 24 Oct 2000, Rakesh Narpat Bhandari wrote:
>>  >
>>  >>  These equilibrium habits are hard to break.
>>  >
>>  >What is the assumption of an equalized profit rate, if not an
>>  >"equilibrium habit"?
>>  The profit rate is equalized at t-1 as it is equalized at t+1. It
>>  need not be *exactly the same* equalized profit rate as your
>>  equilibrium thinking insists against all realism.
>The point is that something must happen to cool the
>system down and narrow the dispersion of profit rates
>if you are going to have a single average profit rate.
>The question at issue is not whether the rate is the same
>in two time periods, but how you can achieve such
>a low entropy in the first place. I would have thought
>that it is only concievable over a long time period in
>the absence of changes in technology or external

Paul C,
At a low level of capitalist development, technology would be 
relatively stable, but even with this 'absence of changes', the 
system would not move  towards an equalisation of profit rates. 
"Entropy" in terms of the random distribution of profit rates would 
easily obtain in a relatively stable system: there would neither be 
the capital mobility nor labor mobility to achieve the order of 
equalisation of the same average profit rate.

The tendency towards equalisation only asserts itself in an advanced 
capitalist society which is simultaneously disrupting the basis of 
that equalisation by rewarding the entrepreneurs who among other 
things have displaced labor from the system, relative to their 
capital investment, with greater than average profits!

Which means that the tendency towards equalisation becomes stronger 
not just as the tendency towards superprofit on the basis of 
technical change asserts itself but also as the value relations in 
terms of which the magnitude of the average rate of profit is 
determined are themselves now continously revolutionized.

***So in such a system--and this is indeed a great paradox-- we have 
both the dynamic tendency of ever renewed inequalities in  terms of a 
general profit rate and the tendency towards an equalisation of an 
ever changing general profit rate.***

Such a system can only  one sidedly be characterized as cooling down, 
narrowing the dispersion, or achieving equalisation of the same 
profit rate. However, in such a system, the general rate of profit is 
indeed not simply a a calculated average of the profit rates but a 
real material force in the system.

But... that the equalisation of the profit rate only becomes a real 
force in an advanced capitalist economy does not imply, as you seem 
to think, that the system is settling down to a  general profit rate 
which only changes over the long term. (The direction in which it 
changing however is only clear over longer periods due to random and 
cyclical fluctuations over the shorter term)

"capital arrives at this equalization to a a greater or lesser 
extent, according to how advanced capitalist development is in a 
given national society: i.e., th emore the conditions in this country 
in question are adapted to the captialist mode of production. As 
capitalist production advances, so also do its requirements that 
become more extensive, and it subjects al the social precondtions 
that frame the production processs to its specific character and 
immanent laws.
accomplished more quickly, (1) the more mobile capital is, i.e., the 
more easily it can be transferred from one sperhe andone place to 
othes; (2)the more rapidly labor power can be moved from one sphere 
to antoerh and frm one local point of production to another.' capital 
3 (vintage), p. 298

One just has to pay attention to the contradictory nature of the 
formulation, for it expresses a 'real contradiction' of the system 
of which no one sided characterisation will suffice.

It is true of course that  Marx often focuses ch 10 on the real 
tendency towards equalisation in itself but this is NOT to determine 
long term centers of gravity (contra Ajit and Duncan, there is no 
such thing) but to elucidate how this tendency does in fact give rise 
to price phenomena which though completely externalized and prima 
facie irrational forms of commodity value provide the basis of the 
notions in the heads of vulgar capitalists and vulgar political 
economists alike.

So the idea of long term natural prices is both accepted for the 
purposes of immanent critique and rejected as a real premise of the 

All the best, Rakesh

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