[OPE-L:652] Forms of Tech. Change [digression]

glevy@acnet.pratt.edu (glevy@acnet.pratt.edu)
Tue, 5 Dec 1995 19:48:25 -0800

[ show plain text ]

Andrew gave us a highly thought-provoking post in [OPE-L:648] that _no
one_ has commented on (to my surprise).

> In the Okishio theorem, the capital losses are not
> even charged against profits--and this is THE reason, T H E reason, Okishio
> purportedly "refuted" Marx's law. As if an accountant's profit rate
> rises because he buys a computer for $6000 that's now worth only $1200.
> No amount of babbling about the cheapening of the elements of constant
> capital changes the fact that $6000 was sunk.
> Once one understands the moral depreciation factor, it is simple to show
> that the rate of profit can fall even if the "capital/output" ratio FALLS.
> Here's how you can do it at home in your spare time:
> Assume a single sector economy, producing output (X) by means of living
> labor (L) and physically nondepreciating fixed capital (F) only. Assume
> also that production is *instantaneous*, so that the input and output
> price are the same. Now, let the physical quantities grow as
> follows:<snip>
(1) What happens when we allow for a multi-sector (or at least
two-sector) economy? And what happens when the assumption regarding
"instantaneous" production and "physically nondepreciating fixed
capital" is dropped? Do the results still hold, Andrew?

(2) Was this an OPE-L "original" or is it based on a published paper that
you have written, Andrew?

(3) Does the lack of commentary by others suggest that we all agree that
the Okishio Theorem is not valid?
On another matter: No one has raised any further questions on Part 1,
e.g. on money. Is it safe to assume that we can move on to Part 2?


In OPE-L Solidarity,