Re: [OPE] Just published: THE NATIONAL QUESTION AND THE QUESTION O F CRISIS (RPE, Vol. 26)

From: GERALD LEVY <gerald_a_levy@msn.com>
Date: Fri Dec 03 2010 - 10:43:51 EST

> If the productivity of labour is rising at 5% a year, the existing machines will be getting cheaper,
> thus 5billion will buy more machinery this year than it did 20 years ago when the worn out
> machines were bought.
 
Hi Paul C:
 
This depends on assumptions concerning the competitive structure of markets. For
example, increasing productivity in oligopolistic markets does not necessarily imply
lower commodity prices.
 
Also, let us recall what you recently claimed re an increase in unproductive expenditures.
One major form, in practice, of this is the labor employed in advertising by oligopolies
which are engaged in a strategy of product differentiation. In other words, the
assumption of classically competitive markets does not fit in well with a model in
which there is increasing unproductive expenditures (although, of course, there can
still be state expenditures, which are unproductive, in such a model - so long as
there is a state sector incorporated into the model).
 
I note, though, that the assumption you are making was also made by Marx in the formation
of an average rate of profit and in the theory of a tendencial fall in the general rate of profit.
 
In solidarity, Jerry

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Received on Fri Dec 3 10:45:41 2010

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