[OPE-L:346] Re: Empirical and theoretical Transformation Problem

Duncan K Foley (dkf2@columbia.edu)
Thu, 26 Oct 1995 11:18:14 -0700

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On Wed, 25 Oct 1995, Paul Cockshott wrote:

> I agree marx was trying to deal with a genuine theoretical problem
> in his theory of production prices, but the question is whether
> the theory within which it is posed is right.
> If one has a theory that says competition leads to capitals
> in different branches earning the same rate of return, then one
> has a theoretical problem. But what if this theory is wrong.
> What if competition does not work that way. What if capitals in
> fact earn profits proportional to the number of workers they
> employ?
I don't think Marx was particularly committed to the idea that
competition in fact always equalized profit rates, but he did accept it
as the assumption under which classical political economy tried to
analyze capitalist social relations, so it was important for him to
explain how it fit in with the labor theory of value.

If it turns out to be a robust empirical fact that profits are
proportional to number of workers or the wage bill, that is a fact that
needs theoretical explanation. In particular one would have to explain
why competition among capitals doesn't operate to eliminate the resulting
disparities in profit rates.