[OPE-L:3655] RE: Laibman on the output ratio and the occ

Paul Cockshott (wpc@cs.strath.ac.uk)
Mon, 11 Nov 1996 01:37:16 -0800 (PST)

[ show plain text ]

>Paul C (ope-l 3628):
>"The problem with the concept of the technical composition of capital is that
>it is incapable of precise definition, since it aggregates dissimilar use
>values. It is in effect the same concept as Laibmans physical capital to
>output ratio, and suffers from the same ambiguities."
>This is exactly why Marx introduced the organic composition of capital, which
>is a constant-value measure of C/V. When values are held constant, any change
>in C/V is a change in the TCC. The OCC is no more ambiguous than any other
>constant-price measure, and the quasi-physical entity it is measuring, the
>TCC, is no less capable of being defined precisely than is any other "real"
>variable such as real GDP, real wages, real interest rates, etc.
>Andrew Kliman

Paul C:
Provided that one derives the technical composition from the organic
treating the latter as the primary concept, then it has a use. When doing long
timeseries analysis one faces the practical difficulty of obtaining data on the
relative movements of prices between capital goods and other goods, that would
be necessary to provide the appropriate deflators. One also faces the difficulty
of the changing composition of the means of production, the types of goods used
differ from one year to the next. This becomes the more severe the longer the
period that one considers.

This changing composition arguement is obviously a restriction on other
'real' measures
of the type you mention. It should be born in mind however, that in measuring
real wages, real incomes etc, statisticians are generally concerned to
for inflation. This is a monetary phenomenon, and it is somewhat easier to
for than changes in relative values or in physical compositions. For
instance, as
a ratio, c/v automatically compensates for inflation, and is in that sense,
a 'real' variable. Deriving the technical composition in the sense that you
it would be a rather daunting task. One would have to work with
disaggregated capital
stock figures and premultiply these by a vector of rates of change of
relative values,
before re-aggregating to derive changes in the technical composition.
Paul Cockshott