[OPE-L:2170] TSS: A Great Leap Forward

ernst@pipeline.co (ernst@pipeline.com)
Sun, 12 May 1996 13:08:32 -0700

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Following the suggestion of Duncan in OPE(2165), I thought
it might be useful to point to one way in which the TSS
approach can be useful not only in resolving a dilemma one
finds in reading CAPITAL but also in reconciling the Marxian
approach to accumulation with reality.

Generally, a necessary but not sufficient condition imputed
to Marx's falling rate of profit is that the ratio of constant
capital to output must rise for the rate of profit to fall.
Yet, in CAPITAL itself we find Marx himself claiming that
as machines replace less productive machines that ratio falls.
(See CAPITAL, Vol. 3, p108-09 and p260, Int.Edition.) Now
if we read Marx religiously and assume the argument to be
valid, then the task would be to show how the rate of profit
and the constant capital to output ratio can fall simultaneously.
A TSS approach can and does allow for this. The simultaneous
approach cannot without claiming that rising wages cause a
fall in the rate of profit. Using the simultaneous approach
requires one to hold fast to the idea that Marx was indeed a
"minor post-Ricardian" in that with technical change returns to
scale diminish. Defenses of Marx thus take on an uncomfortable
neo-classical tone.

Perhaps, more important, is the notion of technical change thrust
upon Marx's followers under the simultaneous approach. That is,
changes in techniques are always capital using in that the
constant capital to output ratio is seen as increasing as change
takes place. Now I am familiar with much of the machinery used
in the mailing industry where wages are fairly low. Yet I know
of no machine salesman who is in the market today selling capital
using machines. Folding machines, for example, replace older ones
and increase productivity by a factor of at least 100. The same
for inserters and meters. I do not think this industry is an
exception. Indeed, it might be interesting to search for examples
of the opposite type of machine used to replace another.