[OPE-L:1556] Re: Temporality vs simultaneity

Bruce Robert (broberts@usm.maine.edu)
Tue, 26 Mar 1996 09:20:41 -0800

[ show plain text ]

This is a bit of a change in focus from the recent flurry of posts under
this heading; I'm going back to the earlier discussion. On the drive back
from the EEA I was mulling over the "temporality vs simultaneity" debate,
on OPE-L and at the meetings (where it was quite intense), and a
potentially interesting numerical case came to mind as a way to separate
and distinguish the two approaches. I'm curious what you all think of the
following example--TSS proponents especially.

I start from the same physical conditions as in Massimo's example in his
post #1357 (3/7/96). There is one commodity (corn), so price and value are
identical. 50 units of corn constant capital, combined with 50 units labor
performed, yield 100 units of corn output. The real wage per unit labor,
which I take to be given and unchanging here, is .2 unit of corn. Unlike
Massimo, I assume that wages are advanced, i.e., between period 1 and
period 2, capitalists advance to workers money (to pay them for their
forthcoming labor) which the workers immediately use to purchase means of
subsistence--they buy some of period 1 output at the existing period 1
output prices. (I do this because this is the way I understand Andrew to
conceive it; changing the assumption would affect the numbers that result
but presumably not the shape of the conclusions).

Given these premises, the initial situation (in common to both approaches) is:

input P = output P = 1
C = 50
L = 50
V = 10
total real wages = 10 corn
real wage per worker = .2 corn
S = 40
S/V = 4
C/V = 5
r = .6667

Now, suppose that capital comes up with a new technology: the same
physical output of corn (100) can be produced with only 45 units of corn
constant capital (5 fewer), but it requires a significant increase in
labor--L would be 77.5. Given the real wage (.2 corn), the 77.5 units of
labor would have to be able to purchase 15.5 units of corn (5.5 more than
before). The decrease in corn constant capital is more than offset by the
increase in corn wages.

Would capital institute this change? According to the SSS approach (and
Marx as I read him), no. Physical capital advances (45 corn plus 15.5
corn) rise, without any gain in total output. Labor productivity falls
dramatically (more workers producing the same output), and the saving of
constant capital is not enough to offset this. The rate of profit would
fall a bit. Here are the numbers that would result (according to SSS) if
the change was instituted:

input P = output P = 1.409
C = 63.409
L = 77.5
V = 21.841
total real wages = 15.5
real wage per worker = .2
S = 55.659
S/V = 2.548
C/V = 2.903
r = .653

However, as near as I can tell, the TSS approach says that capital would
*eagerly* embrace this change. The "determination of value by labor-time"
dictates that the rate of profit will *rise*, since more workers are
exploited. Here are the numbers I get for TSS in period 2:

input P = 1
output P = 1.225
C = 45
L = 77.5
V = 15.5
total real wages = 15.5
real wage per worker = .2
S = 62
S/V = 4
C/V = 2.903
r = 1.025

Since TSS proponents insist they are not interested in iterative solutions,
I don't bother with subsequent periods. But presumably capitalists make
their decisions on the basis of what they expect to happen in the next
period, so they *would* institute this highly profitable change; then,
given the effects produced in period 2, they would presumably look around
for any further labor-using technical opportunities in order to further
raise their rate of profit by adding to the workforce and shrinking the
means of production (and the composition of capital). The only obvious
barrier to such efforts would seem to be the exhaustion of the reserve army
and the effect that might have on real wages. Otherwise, it would seem
that capitalists would always seek to capture the benefits that accrue to
them from maximizing employment (irrespective of the physical productivity
of labor).

I refrain from offering any Okishio-like theorems that might spring from
these TSS numbers, at least until someone from the TSS group will verify
that I'm presenting that view accurately here. Have I calculated the TSS
numbers correctly, and is it correct that TSS logic must view this change
as one that capital *would* eagerly put into practice?

If so, then we have a potentially interesting case of disagreement, since
SSS logic says that capitalists are certainly smart enough to realize that
paying out more in order to get a smaller surplus product (available for
consumption and/or net investment) is a dumb way to accumulate. We would
also have a potential empirical test--have capitalists ever actually
behaved in this way, which TSS logic apparently views as a profitable thing
to do?

Bruce B. Roberts
Department of Economics
University of Southern Maine
Portland ME 04104-9300
(O) 207-780-5503
(H) 207-772-7047
fax 207-780-5507-------------------------------------------------