[OPE-L:7547] Re: Re: Sraffa/von neumann and falling rate of profit

From: Rakesh Bhandari (rakeshb@stanford.edu)
Date: Mon Aug 26 2002 - 12:33:51 EDT

re Paul C's 7544

>Nothing inherently malthusian about the effects of
>zero percent interest rates on the direction of capital

I thought the question is why there would be a kind of 
overaccumulation of capital in the sense that the ratio of the 
physical surplus to the physical to the physical stock of capital 
would fall. Do zero percent interest rates explain this kind of 

>Note that this economy is in simple reproduction but has a potention
>von-Neumann growth rate of 100% since this is the expansion ratio
>of the basic goods sector.

A capitalist economy cannot in fact have a potential growth rate of 
100% since that would imply the capitalist class lives on air as the 
entire surplus value would be capitalized. Otto Bauer was right to 
build a column for capitalist consumption into his revised 
reproduction schemes, for if capitalist consumption were eliminated 
in the the course of accumulation process--as Grossmann showed it 
would be on his assumptions--accumulation would have no meaning to 
the capitalist class and would cease forthwith. In Bauer's scheme 
this happens around period 21.

>This is in no way contrary to the labour theory of value. If
>there is no human labour input, the labour theory of value
>simply does not apply to this case.

As Pack presents the case, what this 'model' shows is that the 
elimination of living labor from the process of production need not 
lead to a collapse in the rate and mass of profit and thus the 
breakdown of the capitalist system.

>>  But this assumes the method of determination which Moseley (monetary
>>  macro), Shaikh (fixed point iteration) and TSS have all criticized in
>>  their respective ways. For each of these three respectives there
>>  would in fact be no profit in a fully automated economy.
>Why on earth should there be no profit in a fully automated

If profit is just another name for a form of unpaid living labor then 
one would expect that the elimination of living labor would mean the 
end of profit.

Well wouldn't Gil say that this thought experiment shows that private 
profit results fundamentally from the differential ownership of 
scarce assets, not the exploitation of living labor in the process of 

>What price structure could the above economy have that
>entailed not profit?

Prices could be assigned to goods, but would there be a tendency 
towards the market's own generation of so called prices of production 
in a fully automated economy?

All the best, Rakesh

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