[OPE-L:1714] Re: Temporality vs simultaneity

Gilbert Skillman (gskillman@mail.wesleyan.edu)
Fri, 5 Apr 1996 15:37:53 -0800

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I inadvertently overlooked a post John sent on the eve of my trip to
Vancouver. With apologies to John, I partially rectify this omission
here--John, I'm going to have to dig out my post 1492 before I can
answer your point #2, but the following responses should provide more
than enough targets for those devastating salvos to commence.
John writes:

> In OPE 1492, you make a number of statements with which I
> probably disagree. However, before firing devastating salvos
> your way, I thought I'd simply ask for a bit of clarification.
> 1. Gil writes in reference to Andrew's post.
> "What's really at stake, it seems to me, is the legitimacy of the
> assumptions. These have been challenged on a number of grounds.
> However, it strikes me, after reading Andrew's RRPE article on the
> subject, that the TSS approach *of itself* is neither necessary nor
> sufficient for rehabilitating Marx's theory of the falling rate of
> profit. Indeed, *value theory* of itself is neither necessary nor
> sufficient for the rehabilitation of Marx's theory."
> When you refer to the "rehabilitation of Marx's theory are you still
> speaking of the falling rate of profit?

Yes, absolutely. I think that Marx fails to establish any
economically meaningful sense in which there is a "tendency" for the
rate of profit to fall, for reasons suggested in response to your
point #3 below.

[....Skipping point #2 for now....]

> 3. I think Gil and I have been here before,

[I don't think so---this part of my critique is new, at least on

> but, at any rate, Gil states, in the same post:
> "Finally, I don't think it's been emphasized before that Marx's theory
> of the falling rate of profit is at odds with his story in section
> 1 of Volume I, Ch 25, on the general law of capitalist accumulation.
> If the profit rate falls due to the mechanism suggested in Volume
> III, the rate of accumulation will slow down, driving the rate of
> profit right back up."
> I'd like to be clear on what you see as the mechanism in Vol. III.

All right, I'll address that below.

> Here, I'll note that in Chapter 25 of Vol. I, Sect. 1, Marx assumes
> that the techniques of production are unchanging.

Yes, I know that. But Marx does not conclude Section 1 (or 2, for
that matter) with the caveat that his section 1 argument *only* works
given that the techniques of production are unchanging.

And indeed, it is not true in general that Marx's section 1 argument
fails if one allows changes in technique. I've demonstrated this for
two different models, one with Cobb-Douglas technology and the other
with Leontief technology and a Foley-Laibman "constant wage share"
condition. In both cases I can derive that the steady-state rate of
profit is equal to (d + g)/s, where d is the capital depreciation
rate, g is the labor force growth rate, and s is the savings rate out
of profit income (all of which are taken to be exogenously given).

Note that this expression does not depend on production coefficients,
so changes in technique do not affect the steady state profit rate.
Thus for at least two important cases that Marx does not rule out
(and I'm sure there are more), I can prove that Marx's section 1
argument continues to apply even if one includes technical change of
the sort Marx considers in Chs 13-15 of Volume I.

Paul Cockshott has established a similar point with a paper he's
posted to his Web site.

Thus I conclude as before: as a general thing Marx's Vol. III
conclusion re the "tendentially falling rate of profit" is
demonstrably at odds with his argument of Vol I, Ch. 25, Section 1.

Now as for the mechanism underlying Marx's argument in Volume III:
as I read Ch. 13 the mechanism is simply the progressive effects of
the real subsumption of labor, which implies steadily increasing
organic composition of capital c/v. Rising c/v, for given rate of
surplus value s/v, translates into a falling value rate of profit.

In saying this I simply follow Marx. Although I'm sure we all know
the chapter I'll spell out my interpretation of Marx so that the
source of my (putative?) error is clear.

Marx begins with what is in effect an algebraic exercise, showing
that rising c/v given constant s/v translates into a falling value
rate of profit: "The same rate of surplus-value, therefore, and an
unchanges level of exploitation of labour, is expressed in a falling
rate of profit, as the value of the constant capital and hence the
total capital grows with the constant capital's material volume. If
we further assume now that this gradual change in the composition of
capital....occurs in more or less all spheres, ...then this gradual
growth in the constant capital, in relation to the variable, must
necessarily result in a *gradual fall in the general rate of profit*,
given that the rate of surplus-value....remains the same."

Marx then notes that he has shown the process of capitalist
accumulation to guarantee just this tendency to increase c/v:

"Moreover, it has been shown to be a law of the capitalist mode of
production that its development does in fact involve a relative
decline in the relation of variable capital to constant...This
progressive decline in the variable capital in relation to the
constant capital....is identical with the progressively rising
organic composition, on average, of the social capital as a whole."

Thus, the process of capital accumulation translates into a tendency
for the rate of profit to fall:

"With the progressive decline in the variable capital in relation to
the constant capital, this tendency leads to a rising organic
composition of the total capital, and the direct result of this is
that the rate of surplus-value, with the level of exploitation of
labour remaining the same or even rising, is expressed in a steadily
falling general rate of profit. The progressive tendency for the
general rate of profit to fall is thus simply the *expression,
peculiar to the capitalist mode of production*, of the progressive
development of the social productivity of labour."

Now, the reason I don't think that Marx has established a "tendency"
for the rate of profit to fall in any meaningful sense is because he
has not ruled out the possibility that the process which raises c/v
also by its nature raises s/v by a greater proportion. In this case
it is not *economically* logical to hold s/v constant. Thus this
portion of the theory must be rehabilitated.

The Okishio theorem is just one illustration of the problem.
Scenario: suppose the "general law of capital accumulation" is in
force, in the sense that wages have been driven to the subsistence
level, and suppose that changing production technique does not change
the length of the working day per worker. Then dw = 0. Now suppose
we require that capitalists adopt only cost-reducing innovations.
Then---well, you know, the Okishio result.

The general point is that one must say *something* about the likely
response of s/v to a given pattern of technical change, or one cannot
establish a "tendency" for the profit rate to do anything.

Then add to this the point I made above concerning the inconsistency
of Marx's Vol. III story with his account in Vol. I, Ch. 25, sec. 1.

OK, John, fire away! In solidarity, Gil