(OPE-L) Re: On the 'Unanswered Questions About Rent'

From: gerald_a_levy (gerald_a_levy@MSN.COM)
Date: Wed Jan 28 2004 - 19:20:52 EST

Hi again Cyrus.  Thanks for taking the time and energy
required to reply to my questions and comments.

> 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.  

I asked about the rate of surplus value for a couple of reasons:

1) because the original "unresolved questions" post by 
Mike L sent on New Year's Day was largely about the rate of 
surplus value (more specifically, he asked whether the 
conclusions about the oil industry are "in anyway based 
on the implicit assumption that the rate of surplus value
in the oil industry is equal to that in industries elsewhere?")
Although I wasn't sure where Mike L was going with his 
question, I didn't recall reading an answer to that question in 
your 1/26 reply.  I gather, though, that your _other_  post
constitutes a reply to Mike's question since his question 
presumes that there are different rates of surplus value in
different branches of production.

2)  because you had distinguished in your post the highest
cost/least productive region in the oil industry (in the US) 
from the lowest cost/most productive region (in the Persian 
Gulf region).  What I wanted to determine is whether you 
believed that the differences in productivity were in any way
related to differences in the rate of surplus value.  

> 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.     

I'll check it out.  I'm afraid that I haven't had the time yet to work my
way through all of the materials you sent me last June. Thanks for that.  
Btw, I very much enjoyed meeting you for lunch last Spring. I hope you 
are getting more sleep!

Note "PS" on the "tiny point" concerning "barrier to entry".

In solidarity, Jerry


> 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

As Marxists presumably we should have no problem discussing "barriers".
Nor should we have a problem discussing the conditions in which entry 
(or exit) from a branch of production take place.  So, I don't think that we
should have a problem discussing "barriers to entry."

Re a):
Methodologically,  _if_ something is an outcome of a process,  then that
doesn't mean that we should abandon the concept.  Rather, the 
methodological imperative is to deepen the concept and connect it to the
logic of capital accumulation.  I don't really consider that to be an enormous
task given what we already comprehend about the process of competition
and the centralization and concentration of capital.  Indeed, it seems an 
"easy fit" to me.

Re b): 
While neo-neoclassical economists refer to "barriers to entry", I don't
think that it is as such a marginalist concept.   There are major divisions
within the field of industrial organization that date back to the birth of IO:
one strand of thought is and was neo-neoclassical -- in either the
Marshallian or [worse still!] Walrasian traditions; another strand of 
thought in IO might be better described as "institutionalist."   Both of
these traditions utilize this concept -- the institutionalists bring
the concept in from a historical perspective related more to business
history than mainstream theory. But, I don't recall offhand who introduced
the expression (perhaps Michael P, or someone else on the list, knows).

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