Re: [OPE-L] Marx on the general rate of profit/rate of interest: a translation error

From: ajit sinha (sinha_a99@YAHOO.COM)
Date: Tue Oct 30 2007 - 16:55:41 EDT

--- Paul Cockshott <wpc@DCS.GLA.AC.UK> wrote:

> Paul:
> Note that I said that all that was required was
> for the half life of producers who recieved less
> than
> the indirect labour plus the necessary labour to be
> short. If the labourers do not recieve the
> equivalent
> of what is necessary to reproduce themselves they
> can not go on producing for long.
Just a couple of minor points: It seems you are
assuming "subsistence income". Now in SCP, what would
be the justification for assuming "subsistence
income"? Under capitalism Marx does assume a loose
"subsistence wage" (as opposed to Smith and Ricardo
who did not). But you don't need to assume it,
particularly in 2007 United Kingdom. Furthermore, in
classical economics, the "subsistence wage" is not
defined at the level of the individual worker. It is
defined at the level of the worker's family. It is
supposed to be enough for the worker himself and for
him to raise two children with wife's income to be
enough for her own subsistence. It goes with zero rate
of growth of population. So in your case it won't kill
off the worker but rather his children, so its effect
through negative rate of growth of population will be
a bit slow.
> -------------------------
> Ajit:
> In that case no adjustment will take place. In
> any case, you cannot mean all producers receiving
> less
> than c+v  ceasing production. In that case the
> sector
> simply dies out. What you need is that some cease
> production or all or some reduce their output so the
> total output is reduced and given the effectual
> demand, its prices rise up to c+v level. But again,
> it
> is not clear to me, what are you really trying to
> say
> here. Cheers, ajit sinha
> ---------------------
> Paul
> I said that the half life of such producers will be
> short, thus after this short half life - say a
> couple
> of years, only half as many producers would still
> be producing. This would be expected to raise the
> price
> as you say.
> But note that this mechanism will work just as
> strongly
> in a capitalist economy. Such producers will be
> making
> a loss and if that continues for a couple of years
> they
> will exhaust their credit lines and close down.
> This effect is much faster acting than the movement
> of capital to branches of higher return. Thus the
> mechanism bringing prices into line with values can
> be expected to be correspondingly strong.
I don't know why you have to kill off people for this
thing to work--people don't die that easily. Jokes
apart, as I said earlier the adjustment mechanism
works on logical time and not historical time. In
terms of historical time, of course, this would work
by bringing differences in the rate of growth of
various sectors--it is through savings and investments
mainly. Cheers, ajit sinha

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