[OPE-L:3359] Re: TSS and Tech Change

Duncan K. Fole (dkf2@columbia.edu)
Fri, 11 Oct 1996 12:20:03 -0700 (PDT)

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Some comments on John's [OPE-L:3339]:

>2. Just to get some terms straight.
>a. constant capital to output decreasing = capital augmenting?

Basically yes. The additional qualification is that constant capital is a
flow concept, and capital-augmenting refers to the ratio of the stock of
capital invested to output, so it also includes the rate of turnover of the
capital stock.

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

"Marx bias" means labor augmenting and capital using. A technique of
production defines a linear "efficiency schedule" on a graph with output
per worker (or wages) measured on the vertical axis, and profit rate on the
horizontal axis, whose vertical intercept is output per worker, and
horizontal intercept is the maximum profit rate, equal to the ratio of
output to capital. "Hicks neutral" technical progress shifts this
efficiency schedule out parallel to itself; "Harrod neutral" rotates it
clockwise around the horizontal intercept (output/capital ratio is
constant, and labor productivity rises); "Marx bias" raises the vertical
intercept and shifts the horizontal intercept toward the origin.

>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.

Well, as you know, I am still skeptical about the meaningfulness of this claim.

>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.

I don't think so. In fact, you produced a relevant quote in your last
posting on this. If you look at Marx's chapter in Volume I on the long-run
tendency of capital accumulation, or at the passages on relative surplus
value, which are the other side of the same coin, you see that he had a
vision of capital accumulation in which at the beginning capital takes over
production processes inherited from previous modes of production that have
very low constant capital to living labor ratios, with a high rate of
profit and a low rate of exploitation, and that capitalist production
gradually transforms these processes to a high rate of exploitation, a high
constant capital to living labor ratio, and a low rate of profit.


Duncan K. Foley
Department of Economics
Barnard College
New York, NY 10027
fax: (212)-854-8947
e-mail: dkf2@columbia.edu