[OPE-L:2247] Do Profits Equalise?

Alan Freeman (100042.617@compuserve.com)
Thu, 16 May 1996 10:30:47 -0700

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Something very odd is happening. As far as I can make out, no-one in the
Andrew/Ted discussion thinks the profit rate actually does equalise.
Paul and Allin don't think it equalises. I don't. Ted and Andrew don't.
I have never heard Fred or Bruce make a big thing of it.

So why are we arguing about it?

I think the reason is that three (not one, not two, but three) different
questions are being discussed. A clearer separation is perhaps needed.

(a)what kind of mathematical system is appropriate to model the
real world? This as far as I can make out is Paul's question.

(b)what kind of mathematical system is appropriate to demonstrate
that the generally accepted refutation of Marx is logically
false? This is, I think, the question of Ted and Andrew.

(c)what kind of mathematical system (if any at all) is appropriate to
model Marx's concept of the real world? This as far as I can make
out is the question everyone addresses to Andrew and Ted.

I think what we have at present is a dialogue between people who
are asking questions (a) and (c) and getting answers to question (b)
which seems to annoy the hell out of everyone.

As I have always seen it, equalisation is present in the model of Ted and
Andrew only because it is present in the transformation 'problem' as
presented by the Marx-critics. I have always seen it as a response to the
Marx-critics under their own assumptions. If instead one thinks that these
assumptions either represent reality, or Marx's general views about the
economy's law of motion, substantial confusion is likely.

But we can settle the main issue Andrew and Ted address, which I see
as: 'was Marx guilty as charged?' *without* having to reach any agreement
about equalisation. May be it equalises, maybe it doesn't: the result is
still true. Marx isn't guilty as charged.

As Riccardo has recognised, Marx's transformation procedure holds, using
the sequential method, *regardless* of what particular model you have.

I should care if Capital orbits Mars, rounds the North pole and goes down
Niagara in a frigging barrel, it doesn't matter. The two equalities must
hold, wherever it goes, in every period, for every model in this *paradigm*
- a better name for this approach as a whole than 'model'.

That's why I have always preferred, and the present debate convinces me
this was a wise decision, not to assume profit rate equalisation at all
but to discuss the issue in terms of an arbitrary set of prices. First,
this means that the results must still hold in the special case of profit
rate equalisation. Second, they hold for *any* model of the actual progress
of an economy, so we don't have to get bogged down in discussions of the
'realism' or correspondence to Marx of any *particular* model.

I'm inclined to make the mischievous suggestion that we should
start over with a new question, and then come back to the old ones.

My question is this: what relevance has the equalisation of the profit
rate *at all*? I think we need start on this question with more
understanding of *each other's* views. To this end, I shall be posting
a new quiz.