[OPE-L:7937] Re: Re: Re: relation of value to organic composition of capital

From: Simon Mohun (s.mohun@qmul.ac.uk)
Date: Wed Nov 06 2002 - 13:11:24 EST

Dear Rakesh,

I think your definitions are wrong. Consult C1, ch.25 second para (Penguin 
ed. p.762)

>  It would seem that the OCC (as you, Alfredo and Simon are defining it) 
> is not mirroring changes in the VCC which result only from technical 
> change because your OCC makes no allowance for the reduction of unit 
> values and current prices effected by technical change.

Response: the ratio which is determined by the TCC and mirrors the changes 
in the TCC is the OCC, not the VCC.

>Yet why else would have Marx thought the OCC does not rise as sharply as 
>the TCC if in measuring the OCC itself he wasn't taking into account the 
>reduction in current prices effected by the continuous reduction of unit 
>values resulting from technical change? That is, it does seem to me that 
>Marx was indeed taking into account the changes in current prices effected 
>in the realm of circulation in measuring the OCC.

Response: as long as the real wage rate is more than one dollar per hour, 
the OCC is always less than the TCC.

>I would say that the VCC rises faster than the OCC because current prices 
>are only brought into the orbit of their new lower unit values which have 
>resulted from on-going technical change through the periodic effects of crisis.
>The VCC thus races ahead of the OCC and is only brought into conformity 
>with it through crisis.

Response: I don't follow this. But empirically it is wrong. Over the period 
1964-2001 for the US economy, we have
1964-1972: OCC greater than VCC
1973-1991: VCC greater than OCC
1992-2001: OCC and VCC virtually identical.

To give some idea of orders of magnitude:
In 1964 TCC = 41.06, OCC = 3.67, VCC = 3.48.
In 2000 TCC = 66.13, OCC = 4.46 and VCC = 4.45


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