[OPE-L:4369] Re: Re: Re: growth rates

From: Rakesh Narpat Bhandari (rakeshb@Stanford.EDU)
Date: Mon Oct 30 2000 - 10:45:21 EST

In 4364 Paul C responded to me:

>On Fri, 27 Oct 2000, you wrote:
>>  Capital mobility is not low because technical change is slow. In a
>>  less developed capitalism capital mobility is low and technical
>>  change is slow. An advanced capitalism gives rise to a real tendency
>>  towards the ever more rapid equalization of profit rates due to the
>>  development of capital markets and the freer mobility of labor power
>>  (both are consequences of capitalist development, historical results)
>>  and an ever strenghthening tendency of the search of surplus profit
>>  on the basis of on going technical change due to the endogenization
>>  of science and technology (also a historical result of capitalist
>>  development).  An advanced capitalist system is ridden with
>>  contradiction, and is by its nature turbulent.
>There are variations in the rate of technical progress even among
>advanced capitalisms. For example the United Kingdom has for
>the last half century had a growth rate of about 2.5% per annum.
>It is a developed economy. Other developed economies, Germany,
>Japan, Italy have had higher growth rates. Developing economies
>such as  South Korea have had even higher growth rates.
>There is if anything a negative correlation between the level
>of development of a capitalist economy and its growth rate.
>The Farjoun Machover theory would predict a positive correlation
>between the dispersion of profit rates and the rate of growth of
>productivity. Your theory would predict the inverse, these are
>at least testable hypotheses unlike most of the arguments you
>put forward. Why not try and test them out?

Paul C,
First, I am not at all 'opposed' to the statistical testing out of hypotheses.
I consider the empirical work you, Fred and others have done to be 
very illuminating, though again I have my worries about the 
distortions built into national data.
Second, if you actually read what I wrote, you would see that the 
testable hypothesis which I propose is the following: the tendency 
towards the equalisation of profit rates only becomes a real force in 
a sufficiently developed and dynamic capitalism in which the input 
prices cannot be assumed to equal the output prices. Whether the 
annual growth rate is 2.5% or 5% we have a situation in which unit 
values are indeed changing over the course of a period or year.

Paul, please note that at this point I am dealing with the so called 
transformation problem.

I am focusing on two criticisms.

1. Should the inputs be transformed into the same unit prices of 
production as the outputs?

2. Should the mass of surplus value be set equal in the ummodified 
and modified scheme? What exactly is the meaning of the second 
equality if it's not a stipulation that the sum of branch profits in 
the unmodified and in the modified scheme  should be equal to the 
same mass of surplus value (it's 200 in the bort-sweezy-cottrell 
value and price scheme)?

Allin, Steve and you seem to be very frustrated with me as I am some 
obscurantist, but I hardly see the questions which I am posing to be 
difficult ones.

The first question is either explicit or implicit in Carchedi, 
Freeman and Giusanni; the second criticism derives from my reading of 
Fred's macro method.

I don't think the transformation should be solved under the 
assumptions of simple reproduction or equilibrium prices; but even if 
the latter conditions are demanded, it is quite possible to solve it 
once one understands that the second equality is not an invariance 

All the best, Rakesh

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