More on David L's critique of TSS

From: rakeshb@STANFORD.EDU
Date: Fri Apr 11 2003 - 20:07:04 EDT

I invite comments and corrections by any who have followed the debates
in Research in Political Economy. Thanks again to Paul Zarembka for
putting together such high quality and stimulating volumes.

I had mentioned a peculiarity in the examples that Kliman and Freeman,
as well as David L, have been using: workers are supposed to live on air
and there is no growth in the size of the proletariat over time. Of
course if workers were living on air and capitalists could use their
growing means of production to employ and exploit more workers over
time, it's not clear that the rate of profit would fall whether one uses
the simultaneist or temporal conception of value--as long as we were
assuming that total labor productivity was not falling, i.e., the sum of
indirect and direct labor required per unit of output was not rising.

For those who have seen the KF example which David reworks on pp.297-99
in Research in Political Economy, vol 19, they will notice that I have
only modified it in the following example. I simply allow for more labor
to be employed each period though of course I allow for the means of
production to grow faster than the labor force, i.e., I assume a rising TCC.

I should emphasize that unit values do decline in each period in my
example as per TSS requirements; they just don't fall as fast since
additional labor is being absorbed in each period.

So let's allow the physical ratio of C to L increase incrementally from
10:10 or 1:1 in the first period (I don't show here the original KF
table in which the physical quantities are laid out); in the second
period we will have 12:11; then 15:13; and finally 20:17.

Period  C (hrs) L(hrs)  X(hrs) ROP [(X-C)/C]

1       50      10      60      0.200
2       60      11      71      0.183
3       71      13      84      0.183
4       84      17      101     0.202

Again there is no trend for the decline in the rate of profit as long as
we keep the TSS methodological assumption that variable capital (or v)
can be held at zero and workers thus imagined to live on air.

Even if we assume that variable capital is 1/2 of L or in other words
the rate of exploitation is 100% and thus the rate of profit is
calculated as (X-C)/(C+V), we still don't get a clear trend towards a
falling rate of profit in this four period model.

And the reason remains the same as long as we are assuming that unpaid
labor time determines surplus value: the greater physical quantity of
means of production allows more unpaid labor to be absorbed in each period.

Now, none of this is meant to discount the breakthrough which Kliman and
Freeman have made in demonstrating that there are two conceptions of
value and for the determination thereof. I do think that both Duncan
Foley and David L do recognize that KF have opened up a new perspective
on the value question (though of course the seminal contribution seems
to have been John Ernst's).

I would also like to express a criticism of David L's simulation on p.301.

It seems that more means of production are produced in the period before
than are used in the period following.

Where does the demand then come for these extra means of production? Is
there some implicit Malthusian third party which is doing the consuming?
Where do these means of production go?

More importantly,it seems that the example artificially inflates the
output while minimizing the input. Of course the material rate of profit
will be so high here that it's not surprising that David L is able to
demonstrating some kind of tracking by the value rate of profit. But it
seems that he's stacked the example.

Yours, Rakesh

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