[OPE-L:7550] von neuman growth

From: Paul (clyder@gn.apc.org)
Date: Tue Aug 27 2002 - 06:37:25 EDT

 >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 

They are both an reflection and a cause of it. Accumulation is
not regulated by an average rate of profit but by the portion of
the profitability PDF that is higher than the prevailing rate of
interest. If this is low enough it will generate higher capital
composition ratios. 

 >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.
von Neumanns concept is that the maximal rate of profit and the
maximal growth rate are equivalent. Assume some small 
temporary reduction in consumption, and for a period
accumulate any profit over and above this reduced consumption
level. The growth rate will accelerate up to the limit set by
the maximal rate of profit. At any rate less than this the
capitalist consumption can then be set to grow at this rate.

For instance allow an initial 5% reduction in capitalist
consumption. then after a sufficient delay you could set
capitalist consumption to grow by 95% a year.

 >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.

I dont see anything controversial about this other than the
hypothesis that living labour can be completely eliminated.

 >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.

No, because we are talking about two different modes of 
production. The capitalist mode of production employs 
labour and exploits the labourers to make profits.

The hypothetical future mode of production involves
only a class of rentiers who employ robots to make
profits. Under these circumstances robot activity would
become the source of profit.

 >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?
I am skeptical about prices of production even in capitalist
economies. The issue is not that however, it is whether the
mean profit ratio, whatever the sectoral distribution of profit
ratios, could be anything other than positive given the i/o
matrix you specified.
Paul Cockshott

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