RE: [OPE] webpage computing dynamic rate of profit

From: Paul Cockshott <>
Date: Sun May 17 2009 - 17:03:23 EDT

The issue here is of flow versus stock.
One can not simply compare total wages costs with fixed capital since the first is a flow and the second a stock.
There is no way of arriving at a relative magnitude.

From: [] On Behalf Of Gerald Levy []
Sent: Saturday, May 16, 2009 11:47 AM
To: Outline on Political Economy mailing list
Subject: Re: [OPE] webpage computing dynamic rate of profit

> means of production. The data is however restricted to fixed capital
> stock.

Hi Dave:

So, obviously, economies in the use of constant circulating capital
wouldn't be reflected in the data.

>> Also, why isn't V in the denominator?
> R = P/K is *one* way to measure the rate of return on capital invested. If
> one takes it as the annual rate of profits then the turnover time for
> money advanced in wage payments is taken to be relatively small. In any
> case the magnitude of V is much smaller than K.

The total labor costs (wages plus benefit costs) for capitalists is
small compared to K? While it tends to be the case that non-labor costs
for firms tend to exceed labor costs, this doesn't imply that the former
are "relatively small". Since there are significant variations in V
internationally, it would have been interesting to see how incorporating
V into the formula would have changed the comparative results. (NB:
then, of course, there's the question of productive vs. unproductive
labor since only wages paid out to the former group constitute V).

> But the main motivation for me was to be consistent with the bulk of the
> literature on the profit rate.


In solidarity, Jerry

ope mailing list
ope mailing list
Received on Sun May 17 17:06:28 2009

This archive was generated by hypermail 2.1.8 : Sun May 31 2009 - 00:00:03 EDT