[OPE-L:1615] Re: Do capitalists accumulate?

Gilbert Skillman (gskillman@mail.wesleyan.edu)
Thu, 28 Mar 1996 12:20:20 -0800

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Alan writes, amidst other arguments:

> The simultaneous paradigm produces the absurd
> result that they can accumulate with a rising rate of profit.

I don't see how this result can be labelled "absurd" without further
specification. In particular, the notion that a rising rate of
profit may coincide with capital accumulation is neither necessary
nor unique to the simultaneous approach to value determination.
Nor can it possibly be, since profit dynamics occur in the world of prices,
and the simultaneous approach only establishes an algorithm for determining
values, understood quite independently of prices.

For example, if the rate of profit is below the "steady state" level
Marx speaks of in section 1 of Ch. 25, the rate of profit will rise
in an accumulating economy as long as the rate of capital
accumulation is below the (exogenously given) rate of labor force
growth, net of the rate of capital depreciation. Nothing absurd about that.
Indeed, if the temporal approach doesn't deliver the same result under such
conditions, I'd say it's a defect rather than a virtue of that approach.
Conversely, if the rate of profit is above this "steady state" level, the
rate of profit will fall.

>It is not a
> refutation of the temporal approach to establish that if they stop
> accumulating, the profit rate rises. On the contrary, it is a confirmation
> of the temporal approach, which predicts that they must periodically
> stop accumulating in order to restore profitability, and that this is why
> there are periodic crises.

As indicated above, the same conclusion can be reached on the basis
of the simultaneous paradigm. Again, I don't see how this can be a
basis for distinguishing between the two systems.

In solidarity, Gil