Re: [OPE-L] SV: [OPE-L] what is irrational in the functioning of capitalism?

From: clyder@GN.APC.ORG
Date: Fri Dec 01 2006 - 17:25:04 EST

Quoting ajit sinha <sinha_a99@YAHOO.COM>:

> >
> > It is clearly not large in the normal sense of the
> > word - employing lots of people.
> ______________________________
> Paul, which economy is larger today: US or Indian?
> Most of the people hold that it is the US economy.
> Why? Because it employs more workers than the Indian
> economy? Obviously your definition is not shared by
> most.
> _____________________________

This is because the labour of an average indian counts
as less than that of the average american. The amount
of labour time spent producing things in India being
generally higher, only a fraction of it is socially
necessary. Thus in terms of socially necessary
labour ( on the global level ) the US economy is bigger.

> >
> >  Counter factual because we know
> > that the
> > range of variation of rates of surplus value is
> > actually quite
> > small say 60% to 200% in current capitalist
> > economies. This
> > also appears to be stable over long historical
> > periods.
> ____________________________
> I think I have already answed to such arguments. I
> don't want to keep repeating myself--it's tiring.

  and then Later

> How many times I have to say that my problem is not
> empirical, it is logical. Cheers, ajit sinha
> >

I dont think one can be so dismissive of the empirical.
You have to explain why the labour theory of value, if
wrong, gives the correct predictions. Why else is the
rate of profit lower in sectors with a high organic

It follows directly from the labour theory of value
but it is incomprehensible starting from Sraffa for example.

Science has first to account for what happens. Logical consistency
in a theory that makes the wrong predictions does not help.
The fault of Sraffa's theory is not logical consistency
which is fine, it is that it makes counter factual assumptions.

Dont get me wrong,  I have great respect for Sraffa, and consider that his idea
of the standard commodity was a brilliant insight. But
the whole price-of-production school of analysis is based
on assumptions about the world that we now know to be false.

> ______________
> >
> > I think you have to consider the dynamics of the
> > process
> > more carefully. If the rate of surplus value rises
> > unusually
> > high, then labour is cheap and it will pay
> > capitalists to
> > use labour intensive rather than capital intensive
> > techniques.
> > Thus the process you hypothesise will be self
> > limiting.
> ______________________
> What kind of theory you have to claim anything like
> that?

I am basing it on Marx's analysis of the irrationality
of capitalistic costing of machinery.

Allin Cottrell and I developed the argument in some detail
in chapter 3 of our book Towards a New Socialism.

> And you should be careful in using terms like
> labor or capital intensive technologies--as they are
> not scientific terms.

That is a fair point I suppose. I often use capital intensive
as a synonym for having a high ratio of constant to variable

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