[OPE-L:1331] Re: A Problem w. Transformation

Duncan K Foley (dkf2@columbia.edu)
Wed, 6 Mar 1996 05:33:43 -0800

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On Tue, 5 Mar 1996, John R. Ernst wrote:

> Duncan,
> Here are a few points on the various levels of abstraction
> you sketch below.
> 1. I agree that moving to a discussion of absolute rent on
> OPE at this point would be, at best, premature. I do
> note that you remark that it is a "relic" and add that
> I think it is a concept that distinguishes Marx from
> Ricardo. For me, assuming away absolute rent assumes
> away private ownership. (Note that calling it a "relic"
> does not mean you assume it away.)

I guess I would need to understand what you mean by "absolute rent" to
see why you identify it with "private ownership".

> 2. When we move to what you call the "next step", we are
> clearly beyond most treatments of Marx's equalization
> of the rate of profit as rent and thus demand are
> included. To carry out this step, we would need a
> theory of demand or, at least, one of accumulation that
> generates that theory.

Agreed. But one reason that this issue doesn't receive much attention is
that it does not push the conceptual abstract understanding of the issues
forward, although a theory of profit-rate equalization with rent might be
helpful in analyzing particular historical conjunctures. (It would also
lead to a theory that looks a lot more like marginalist pricing theory,
which is another reason Marxists may not have been enthusiastic about
pursuing it.)

> 3. It is not clear what the first step is or means other
> than the standard treatment of the problem. While this
> often passes for Marx's, as I pointed out at the start
> of this, Marx could hardly have been more explicit in
> excluding those "natural monopolies" as he dealt with
> the equalization of the rate of profit. Perhaps, this
> is simply a curious point, then again maybe not.
Monopoly is surely important in particular historical conjunctures.
Whether it plays much role in gold production is another question. In any
case, I think it helps to use the "layering" approach, and be clear on
the theory of the simpler cases before one adds in realistic complexity.