[OPE-L:4583] Re: Rate of profit or the RRI?

From: John Ernst (ernst@pipeline.com)
Date: Wed Nov 29 2000 - 15:00:39 EST


1. I agree Marx never used the RRI.  Note that he transforms values into 
   prices of production with the assumption that capitalists will have 
   equal rate of profits when prices of prodution prevail. 

2. Given fixed capital,  no one decides to invest or not to invest on the 
   basis of a simple rate of profit.  That is,  if two capitalists told
   you what their rates of proft are for a given year, you wouldn't  
   be able to say which of the two has made the better investment.  More
   important, another capitalist would not be able to decide whether or
   not to make the same investment as either of the two had made.  

3. Sraffa and others do construct simple models with fixed capital in which 
   the RRI's are equal but the rates of profit as usually defined are not.

4. My questions were a result of my confusion concerning how one makes the
   correction of Marx on transfaormation given fixed capital.



At 07:39 PM 11/29/2000 -0000, you wrote:
>John Ernst wrote [OPE-L:4577]
> things 
>I don't get.
>1.  Is the rate of profit or the RRI equal in all sectors after the
>John, by RRI are you referring to the rate of return on each *chunk* of
>investment, as distinguished from the rate of profit calculated over all
>capital (I think this is the usual usage?).
>I have to say that it's never occurred to me that Marx might have had in
>mind equalisation of the RRI, and I don't think I've ever read anything by
>anyone who appeared to think this.
>Would you like to enlarge on what prompted your question?

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