[OPE-L:4345] Spheres and industries

From: P.J.Wells@open.ac.uk
Date: Sat Oct 28 2000 - 13:22:28 EDT

I'm just in the process of reading Mark Glick's thesis, which is of course
about the gravitation of industry profit rates.

Discussing classical theories of competition he quotes Ricardo and Marx on
the redistribution of capital, as opposed to the workings of market price,
as the source of profit-rate equalisation.

Glick, along with others working in the same area, believes that one ought
to expect to find no particular evidence of profit rate equalisation
*within* industries, but only between them.

The sources of *intra*-industry non-equalisation are said to be the
possession of different techniques of production, more or less efficient
organisational systems, etc.

An aspect of this literature which I have always found rather unsatisfactory
is that the subsequent empirical tests seem invariably to be conducted at
something approximating (e.g.) the one-digit level of the 1981 version of
the UK SIC system.

This is partly because the intra-industry "prediction" seems entirely
spurious at this level: for instance, industry 3 (Metal goods, engineering
and vehicles industries) contains the four-digit industries 3222: Engineers'
small tools, immediately followed by 3230: Textile machinery (3223 to 3229
are unallocated).

I'm easily persuaded that the manufacture of spanners requires different
technology and organisation to that needed for making powered weaving looms,
but so what?

Even within four-digit industries the notion looks a little thin: being
equipped to forge spanners does not entirely help one to engrave the Vernier
scales on micrometers, for example.

Neither Ricardo nor Marx use the term industry in the passages cited by
Glick: in his quote from Ricardo the latter talks about capital (*not*
capitalists) moving between "particular employments", by which he clearly
means *enterprises*, not industries; likewise, Glick's citation from Marx
refers to similar movements between "spheres of production", a term which
would seem able to bear a variety of interpretations.

Later on Glick quotes Marx as follows: "What competition brings about, first
of all in one sphere, is the establishment of a uniform market value and
market price out of the various individual values of commodities. But it is
only the competition of capitals in different spheres that brings forth the
production price that equalizes the rates of profit between those spheres."

So a sphere is something which contains commodities: but my spanner is one
(individual) commodity and yours is another. 

What I'd like to know, therefore, is what constitutes a sphere? Is it a
space enclosing all engineers' small tools, all spanners, or all
bi-hexagonal 15mm ring spanners (for example)?

If one believes in the stratification of profit rates in the latter space,
should one expect equalisation or stratification within industry 3222?
Within industry 3? Within the economy as a whole?


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