On Mon, 26 Aug 1996, Patrick Mason wrote:
> In response to Duncan's post, Paul Z. writes:
> > ...
> >I always find it useful to write the rate of profit r from s/(c+v) to
> >s/v divided by c/v+1 and rewriting the divisor to
> >
> > c v + s c
> >------- ------- + 1 = ----- [1 + s/v] + 1
> > v + s v v + s
> >
> >
> >Thus, with s/v fixed, the movement in the rate of profit depends upon
> >movements in c/(v+s), the technical value composition of capital, the
> >ratio of labor time in fixed capital to the living labor time working with
> >it (rising implying falling r).
>
> The necessity for holding s/v fixed confuses me. Consider the standard
> formulation for the average rate of profit:
>
> r = s/(c + v).
>
> Even we assume a maximal rate of exploitation, i.e., s/v = 0, it is still
> the case that "the movement in the rate of profit depends upon movements in
> c/(v+s), the technical value composition of capital, the
> ratio of labor time in fixed capital to the living labor time working with
> it (rising implying falling r)." Under maximal exploitation, we would have:
>
> r (max) = l/c.
>
> Clearly, as the technical composition of capital increases the maximal rate
> of profit will fall. Since this is in fact the maximum potential rate of
> profit the argument is independent of any assumption regarding the rate of
> exploitation.
Pat, I don't understand you. Clearly under maximal r, s/v is not 0 but
rather infinity as v goes to 0 (using your conception).
Paul Z.