Re: (OPE-L) transfers of surplus value among capitalists

From: Paul Cockshott (clyder@GN.APC.ORG)
Date: Sat Mar 13 2004 - 18:32:03 EST

Cyrus Bina wrote:
> Dear Jerry, Paul C., and Rakesh:
> Sorry for my delayed response.
Sorry for my delayed response too.

>  Responding my point #1, Paul Cockshott wrote:
> "This seems to be more an ideal type of a capitalist mode
> of production than a real system."
> My reaction to this has been properly captured in the Sections 1 and 2 of
> this note.  Moreover, a note on methodology is in order here.  To call
> something an ideal type is to say that something is the product of one's
> imagination or a construction that is produced by the actual process
> (reality) itself.  First, in Sections 1 and 2, following Marx, I am
> demonstrating that the rate of surplus value is a rate that is being formed
> through the competition concrete commodities (and thus the products of
> concrete labor), and thus, without the formation of abstract labor (the
> measuring rod of value), it would be silly to talk about measurable value to
> begin with.
> Secondly, the laws are all tendencies in Marx.  Thus, the uniformity of
> profit rate is not an ideal type.  Finally, real conceptions are usually not
> the same as the empiricist ones.

One may use the term empiricism in a faintly derogatory sense, but
a science has to have some predictive power, and has to come to terms
with empirical phenomena that contradict its predictions.

Of course one can accept the idea of the equalisation of the rate of
profit being tendential in the sense that Marxist theory expects actual
rates of profit to be randomly distributed around the mean.

But this is not what one actually observes. The distribution of
profit rates around the mean is not random but is negatively correlated
with the organic composition of capital. This is consistent with the
price vector being partially rotated from the value vector towards
the price of production vector. In this sense there is a tendancy
towards equalisation of rates of profit, but there is also a tendancy
towards commodities selling at their values even if this results in
unequal rates of profit.

> Responding to my point #2, Paul indicted:
> "There is some evidence for this, but there is
> also evidence for a negative correlation between
> sectoral organic compositions and sectoral profit
> rates. This undermines your next sentence: [meaning my Point #3]."
> Again, the question is what evidence and what that means.

I would cite the evidence that Allin and I published in last years

> Paul Cockshott makes the final points:
> If prices are as closely correlated to values as they
> are to prices of production, then a higher than average profit
> to wage ratio in a sector may be explained as the sum of two
> factors [:]
> 1. A contribution due to higher exploitation in that sector[,]
> 2. A contribution due to sales of the product at a price above its value.
> It is relatively easy, using i/o tables, to separate out these
> two factors.
>  My response is simply this:
> The empirical ability to decompose the effects of 'exploitation' and those
> of the 'contribution due to sales' is a wonderful exercise.

Note that I did not say 'contribution due to sales'. I said contribution
due to sales of the product at a price above its value. We expect
ratios to be higher in industries with higher organic compositions of

If an industry, say the edible fats industry, has a profit/wage ratio of
when the mean profit/wage ratio is 70% and the ratio expected for an
with its organic composition would be 80%, then the fact that the profit
wage ratio in that industry was lower than would be anticipated on the
of either values ( assuming an equal rate of surplus value ) or price of
production (assuming an equal rate of profit ) could be taken to
that exploitation was lower in that industry than in others.

> However, just
> to name a few objections, it is neither necessary (for Marx's question) nor
> is reasonable due to (1) ideal reconstruction (and decomposition) of profit
> rate in price terms and (2) the fact that wages are not the same as the
> value of labor power.

I dont quite follow your argument here. I completely miss point (1) and
for point (2) one can in principle compensate for this by collecting
on wage rates and working hours in the industries in question. Doing
is a bit tedious but it quite possible.

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