**From:** Paul Cockshott (*wpc@DCS.GLA.AC.UK*)

**Date:** Wed Oct 27 2004 - 17:54:04 EDT

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Gerry Yes, but it is impossible to predict what the future rate of interest will be over the very long term (e.g.10, 20, or 40 years hence) as well. Paul I agree with you here, I made the same point myself in the next paragraph --------------------- Gerry In thinking about individual rates of return for firms, perhaps it is better to think in terms of rates of return on investment (RRI) rather than rates of profit.(Recall our discussions on RRI years ago with John E and others.) But, I think that the same basic issue returns whether we attempt to calculate rates of profit, rates of interest, or RRI. ------------------- Paul Yes but the rate of return on investment that is publicly visible is the rate of return on equities, which is something quite distinct from the rate of return on real capital. The equity rate of return of investment can be expected to be influenced by the currently prevailing interest rate by obvious arbitrage operations. Incidentally this distinction between the rate of return on equities and the real rate of interest is one of the reasons why, for all its mathematical rigour, the Okishio theorem fails to regulate actual capital accumulation. ------------------- Gerry The future is overdetermined. There are far too many variables to make accurate predictions of what is going to happen over that (40 year) time period. Hell, there might be nuclear annihilation! Or, there might be socialism! Ironically, though, the firms *must* attempt to predict and calculate the unpredictable and incalculable. (NB: the state must also make long-term prediction of costs in the formulation of current state budgets: this can lead to severe budget imbalances over the long-term.) Paul To my mind this is a subjective viewpoint. The future is no more overdetermined than the past. Both are characterised by uncertainty, in that for a given volume of state space at time t0 there exist time directed cones of possible past and future configurations of existence. These are strictly symetrical. The smaller the volume of contemporary state space that we consider the smaller will be the set of pasts and futures that are consistent with it. There is of course an asymetry in our knowlege about the past and future, but that is something quite distinct from material determination. But this gets us into deep questions regarding the philosophy of time.

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