Paul Z:
I think you and I are agreement that assumptions regarding changes in the
wage rate are a secondary consideration in Marx's analysis of the falling
rate of profit. I'll try to clear up the confusion from my earlier posts.
(Also, Alan Cottrell recently posted a response that makes the point I'm
arguing below).
Defining the value rate of profit as r = S/(C+V) = (L-V)/(C+V), where L =
the labor time of productive workers, we get r(max) = L/C. That is the
maximum rate of profit occurs when V=0. If C/L shows a tendency to rise over
time due to technological change then the maximum rate of profit will also
decline. If the minimum rate of profit is r = 0, then the process of
technological change leads to an actual rate of profit that is increasingly
squeezed between a declining ceiling and a constant floor. Alternative
changes in the wage rate may cause the actual rate of profit to increase,
decrease, or remain the same but the fluctuation band between the maximum
and minimum profit decreases over time in response to the accumulation of
capital. Are we on the same page?
peace, pat mason
At 07:09 PM 8/28/96 -0700, you wrote:
>Actually, Patrick, I'm a bit confused. How do you get 1/c from s/c, or
>is it l/c (if so, what "l")? Also, aren't you confirming what I was
>writing? Paul
>
>On Wed, 28 Aug 1996, Patrick Mason wrote:
>
>> Paul Z:
>>
>> You are of course correct in your reply to my comment on your post.
>> Specifically, I should not have stated that the maximal profit rate occurs
>> when s/v = 0, but when v = 0, i.e., workers work for free. Sorry about
the typo.
>> Aside from this bad editing, I think the rest of my post holds.
>>
>> peace, patrick l mason
>>
>> At 08:36 AM 8/28/96 -0700, you wrote:
>> >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.
>> >
>> >
>>
>>
>
>