[OPE-L:3339] TSS and Tech Change

John Ernst (ernst@usa.pipeline.com)
Thu, 10 Oct 1996 12:42:19 -0700 (PDT)

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Let me begin with a few comments on Duncan's OPE-L 3338,
without going through a lot of citations and then make
a few stabs at some theoretical points.

1. Any data would be welcomed that sheds light on the issues
surrounding tech change.

2. Just to get some terms straight.

a. constant capital to output decreasing = capital augmenting?

b. "Marx bias" technical change is not capital augmenting but
is labor augmenting?

3. TSS opens up the possibility that you can have capital
augmenting technical change (see above) and a FRP. Using
other approaches to the concept of value, this is impossible.
Hence, the term "Marx bias" technical change means that
the contant capital to output ratio increases as the livng
labor to output ratio decreases. Where does this idea come

A. Marx's own descripition of the transition from handicraft
to machinery is the only textual support.

B. The concept of value imputed to Marx in which input prices
are somehow equal to output prices as technical change
takes place rules out the idea of technical change in which
output increases faster than constant capital with a falling
rate of profit and an increasing organic compostion of capital.

Comments on A and B

A. As I have said in previous posts, nowhere in CAPITAL can
anyone find any textual support for the idea that as machines
are replaced by machines or sets of machines the constant
capital to output ratio increases.

B. Using TSS, one can develop a notion of the FRP that includes
the idea that, say, ten-fold increases in fixed capital bring about
increases in output that are greater than ten-fold.

An additional point.

(Jerry do not read this.) In our discussion of "TSS and value
added" we assumed that v was negligible. Given that assumption,
it is obvious that capitalists would not make investments that
increase the constant capital to output ratio when we set the
input price of the commodity equal to the output price. Andrew
assumed that the constant capital to output ratio stayed the
same as he constructed his example. Following Marx's idea
of technical change in the period of large scale industry,
I assumed that that ratio fell. Here, let me simple point
out that as dead labor replaces living labor, there is less
and less living labor relative to dead labor to replace.
Consequently, technical change is more and more characterized
by the replacement to dead labor by dead labor, the living labor
becomes less and less relevant in the eyes of the capitalist.
Given the principles of technical change Marx sketches in
Chapter 13 of Vol 1, economies of scale mean that as dead labor
replaces dead labor, the constant capital to output ratio falls.
Marx seemed to know this. Today, given the concept of value
imputed to him, his theory seems to require that this be