[OPE-L:3592] Re: Marxian Research Projects

John Ernst (ernst@pipeline.com)
Mon, 4 Nov 1996 20:29:42 -0800 (PST)

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In OPE-L:3588 Duncan says:

These studies use the decomposition of the rate of profit I developed in
_Understanding Capital_, r = s/K = (s/v)(v/c)(c/K) = ekn where r is the
rate of profit, K is the stock of capital invested, including both fixed
capital and inventories, e is the rate of surplus value (the ratio of
surplus value to value added), k is the "composition of capital" (the ratio
of the flow of variable capital to the total flow of constant capital,
including depreciation on fixed capital) and n is the rate of turnover of
capital (the ratio of the stock of fixed capital and inventories to the
flow of constant capital).

The studies so far indicate a slowly rising rate of surplus value, e,
offset by a declining composition of capital, k, leading to a very gradual
fall in the markup on costs, q = s/(c+v) = ek. There is a sharp structural
break noticeable in the data in the early 1970s when k dropped abruptly
(corresponding, presumably to the sharp rise in energy prices). The rate of
turnover shows a substantial cyclical component, but no strong trend. This
is one aspect of the macroeconomic evidence I think broadly confirms what I
called the "Marx-biased" pattern of technical change, that is,
capital-using and labor-saving.

John says:

1. Is "s" equal to "s/v" or "s/(v+s)"?

2. Could not the "Marx-biased" technical change be due to
increases in the relative prices of raw and/or auxiliary
materials? You note that k dropped when energy prices rose.
Drops in "k" would then not be part of a "`Marx-biased'
pattern of technical change."