[OPE-L:4445] Re: Mandel vs. Baran-Sweezy

A.B.Trigg -Andrew Trig (A.B.Trigg@open.ac.uk)
Wed, 19 Mar 1997 09:50:42 -0800 (PST)

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On the issue of whether an increase in monopoly power increases surplus
value/profits, Kalecki himself does an interesting trick with the
departments of production. Assume that Department 1produces investment
goods, Department 2 consumption goods for capitalists, and Department 3
consumption goods for workers. Assume then that an increase in monopoly
power is reflected in an increase in the markup of prices over costs in each
department. There are two impacts:
(a) In Departments 1 and 2 the levels of profits increase because the
price-cost margin has increased.
(b) In Department 3 less goods are sold to the workers in the other
departments because the real wage has fallen. There is a reduction in the
level of profits.

The increase in profits in Depts 1 and 2 is matched by the reduction in
profits in Department 3. There is no overall change in the level of profits
in response to the increase in monopoly power.

Am not sure where this is leading, but thought it might be a good concrete
example to throw into the pot.

Andrew Trigg

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>From: Allin Cottrell <cottrell@wfu.edu>
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>Subject: [OPE-L:4374] Re: Mandel vs. Baran-Sweezy
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>On Tue, 11 Mar 1997, Michael_A._Lebowitz wrote:
>> For the most part in Capital, Marx
>> put aside such questions and for analytical purposes ("to avoid
>> everything") assumed that real wages (the standard of necessity) are
>> and fixed; his intention, as he noted on many occasions, was to remove
>> assumption when he got to the Book on Wage-Labour.
>We'd also have to open the Book on Non-Commodity Money here.
>The flipside of a _general_ rise in prices, due to an
>increase in the degree of monopoly, is a fall in the
>purchasing power of money. This is problematic if money is
>a commodity in its own right -- we'd have to be talking
>about a rise in the degree of monopoly in the production of
>goods other than gold, relative to that in the production of
>gold. On the other hand, with credit money and an
>accommodating monetary policy, such a general rise is
>I accept Mike's point -- that Marx envisaged the possibility
>that an increase in monopoly could possibly augment rather
>than just transfer surplus value -- but what I'm saying is
>that this is a rather complex matter, with multiple
>preconditions... It can't be conceived as simply a
>generalization of the idea that one capitalist can raise his
>profit by monopolizing a given market, as I think it is in
>much of the literature flowing from Baran and Sweezy.
>Allin Cottrell.