Re: [OPE-L] Marx on the 'maximum rate of profit'

From: ajit sinha (sinha_a99@YAHOO.COM)
Date: Thu Oct 12 2006 - 08:53:40 EDT

--- Francisco Paulo Cipolla <cipolla@UFPR.BR> wrote:

> Rising organic composition and rising rate of
> exploitation are obviously
> related, Ajit. They are two aspects of increasing
> productivity.
No, they are not. You can have increasing productivity
with falling organic composition of capital and you
can have decreasing productivity with rising
composition of capital. There is no law in economics
that I know of that says that productivity of labor
cannot rise if he value of constant element of capital
falls faster than the value of variable capital
needed. Secondly, imagine you are involved in mining.
As you produce more and more you find that it is
becoming more and more difficult to produce the same
amount of minerals as before, so you bring in heavy
machinery, your organic composition would rise but
your labor productivity may remain the same.
Generalize this case to agriculture as a whole, as
Ricardo did. You can have a rising organic composition
of capital with either fall or no increase in labor
> productivity rises and values fall workers can have
> a higher real wage
> (amount of goods), be more exploited, all this
> together with a reduction
> in the rate of profit. As you say the three trends
> can go together.
Actually, I was a little hasty, and I shouldn’t have
trusted my little mathematics done on the margin of a
newspaper. As a matter of fact by relative
immiseration, one could only mean the relative share
of wages and profits PER UNIT OF NET OUTPUT. And I
don't think under any circumstance the relative share
of wages could fall along with the rate of profits per
unit of net output. Thus the relative immiseration
thesis does not even get a start if it is defined
> The maximum rate of profit is a concept that allows
> us to see that the
> fall of the profit rate is independent of the rate
> of exploitation. For
> this to be true it is enough to show that the new
> value created (L)
> shrinks as a percentage of constant capital.
I don't think that a rise in C/L must imply a fall in
the maximum rate of profits to begin with, since you
are allowing labor productivity to rise. You should
note that it is well accepted that the formula for the
rate of profits as S/(C+V) is wrong, so you need to
check Sraffa to see whether the proposition you think
is obvious is all that obvious or not. Cheers, ajit

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