From: Paul Cockshott (wpc@DCS.GLA.AC.UK)
Date: Wed Apr 27 2005 - 04:49:06 EDT
On 4/22/05, Paul Cockshott <firstname.lastname@example.org> wrote: > A crude argument would be that as each capitalist is > going through a circuit of the form > m-c-m'-c'-m'' etc > then during alternate phases of the cycle of capital > each time round each capital has more money. > If we assume that different capitals are randomly > mixed in their phases - some in the money phase > some in the commodity phase then what is true for > individual capitals must be true for capital > as a whole. If the commodity stock held by all > capitals is growing at x% per year, then the > money stock must also be. At each cycle there must > be more money available to purchase the augmented > mass of commodities. Ian replies ---------- Not if prices deflate. p c ---- But that is ruled out in the original formulation. If prices were deflating then we would have a basic cycle m-c-m where the second m was the same as the first, and there would be no profit. Now this same m could of course represent a larger number of labour hours, but that is not the level at which the question is posed. The basic observation is that capitalists purchase commodities for a sum m, and later sell them for a sum m+delta m - how does this occur? Thus although one might concieve of an economy characterised by constant deflation, it is very hard to reconcile this with an observation of how capitalism actually works. In practice of course deflation can cause great problems because firms incur debts this year, which become prohibitively expensive to repay in 5 years time if there is constant deflation. Concievably one might have a capitalist economy with constant deflation and persistent negative interest rates on loans, but I dont think this has ever happened.
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