From: Cyrus Bina (binac@MRS.UMN.EDU)
Date: Wed Jan 28 2004 - 13:39:20 EST
Hi Jerry: 1.There is no 'rate of surplus value' in US oil and another in Persian-Gulf oil. The globalization of oil, since mid-1970s, means that the oil industry is a 'unified' industry, without separate conceptual parts. 2. The US oil, being the highest cost oil region, has remained in the market because it is still producing (on average) a big chunk of the supply. Besides, there are various oilfields in the US region that are somewhat more productive than their counterparts in other oil regions. The fact that the 'regulating capital' of the least productive US oilfields is also 'regulating' the global industry's value formation, is not the same as saying that all the US oilfields are least productive. Here, competition is among all oilfields, regardless of theory location, at the global level. Indeed, I have already demonstrated that oil's regulating capital is also leading to the formation of value of all fossil fuels as well as all non-fossil-based energy (see Bina, "Competition, Control and Price Formation the International Energy Industry," ENERGY ECONOMICS, Vol. 11, No. 3, July 1989). As I remember, you have already have this among the articles I have already sent you. 3. On the contrary, reference to 'barrier to entry' is suspect at two levels: a) methodologically, for if it is an outcome a process, it does not explain the overcoming of such entries (i.e., concentration and centralization of capital through the commotions of competition, which, among others, result in the larger and larger size of 'regulating capital'); b) 'barrier to entry' is embedded in the ideological 'language' of bourgeois monopoly, thus reinforces the neoclassical misconception of market structure. I have to run to my class. Best, Cyrus ----- Original Message ----- From: gerald_a_levy To: OPE-L@SUS.CSUCHICO.EDU Sent: Tuesday, January 27, 2004 7:54 AM Subject: (OPE-L) Re: On the 'Unanswered Questions About Rent' Hi Cyrus: How does the rate of surplus value in the US oil industry now compare to the rate of surplus value in the Persian Gulf region? If we reject AR as applying to the international oil industry and if it is as you say a competitive industry, why has the industry in the US, which has "remained as the highest cost (i.e. least productive) oil region in the world" still been able to remain in the market? Are the benefits from sub-surface materials gained through the "rule of capture" sufficient to keep these firms afloat in a competitive market where other firms are consistently able to realize cost and productivity advantages? In solidarity, Jerry PS re barriers to entry: >>> I tend to think that the buzzword of "barrier to entry" is not more than a tautological chat. Indeed, what is called "barrier to entry" is not the barrier at all but overcoming the increasing size of "regulating capital" in the battle of competition. I am not trying to pick on this tiny point, but careful theorists, particularly Marxists, should mean what they say and say what they mean.<<< I agree that we should mean what we say and say what we mean, but I don't see why reference to barriers to entry should be suspect. Simply because it is a term which arose through mainstream I.O. literature does not mean that it hasn't relevance for explaining the processes of the centralization and concentration of capital. Indeed, I think that it is a concept -- like 'economies of scale' -- that reflects an underlying reality of capitalist competition discussed by Marx and is not in any way wedded necessarily to marginalist theory.
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