# [OPE-L:4390] RE: analysing the rate of profit (formerly, Mandel vs. Baran/Sweezy)

Michael_A._Lebowit (mlebowit@sfu.ca)
Sat, 15 Mar 1997 16:54:22 -0800 (PST)

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Responding to my comment about taking s/v as the rate of surplus value
and Alejandro R's preference for s/(v+s) because it indicates a limit to the
rate of surplus value,

In message Wed, 12 Mar 1997 05:45:39 -0800 (PST),
Alejandro Valle Baeza &lt;valle@servidor.dgsca.unam.mx> writes:

> 1. If v -->0 then s/v --> infinite. It means that the surplus is infinite
> IN RELATION TO VARIABLE CAPITAL. It does not mean anything more. It does
> not mean that surplus is infinite.
> 2. If v -->0 then s/(s+v) --> 1. It means (as Marx said) that the
> surplus value cannot be greather than the working day.
>
> 3. Both propositions are true. You need to choose one for the specific
> problem you are dealing with. If you are analizing the rate of profit and
> you write:
> r= (s/v)/(c/v+1) the limit of r when s/v and c/v --> infinite is an
> INDETERMINATE form (infinite divided by infinite). Hence you are not
> finding ANY limit of r.

I understand what you are saying. My vague recollection is that, when
exploring calculus, Marx was anxious to avoid the "mystical" results of
working with zeros (and presumably infinity). My concern with your
statement is that the way to analyse the rate of profit should not be guided
by the relative ease of manipulating equations and deriving results at the
limit. Far more significant, it seems to me, is *how rapidly* s/v and c/v
approach infinity, and for that it is necessary to note explicitly the
relationship between productivity and these two variables (which is not
possible by simply manipulating the Vol. III equation).

> But, if you write
> r=(s/(s+v))/(c/(s+v)+v/(s+v))
> then the limit of r = 0 if lim s/(s+v) = 1 and lim c/(s+v)= infinite.
> Hence you find tht r has a definite limit. The discussion about the logic
> of falling rate of profit is if c/(s+v) could growth without limit from
> my point of view.

Doesn't this argument revolve around relative rates of productivity change?
What, eg, if productivity in Dept. I rises more rapidly than the average
increase in the technical composition of capital?

> 4. I agree with Mike L. that formulas are not neutral. The two formulas
> of rate of surplus value have different meanings, as Marx pointed out.
> But if you need to analyse the rate of profit behavior
> you must choose the s/(s+v) formula.

As suggested above, I think it is far more critical to set out the causal
relations (as I think Marx did in the Grundrisse and the 1861-63 Mss but not
Vol. III).

in solidarity,
mike
-----------------------
Michael A. Lebowitz
Economics Department, Simon Fraser University