[OPE-L:5209] Re: [OPE-L 5167] trpf

Gerald Levy (glevy@pratt.edu)
Sat, 7 Jun 1997 07:11:01 -0700 (PDT)

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Mike W wrote in [OPE-L:5202]:

> 1. Ben Fine (1982, *Theories of the Capitalist Economy* London, Edward
> Arnold: p. 118) argues that Marx's presentation of the trpf - without the
> counter-tendencies - could well have better come at the end of *Capital*,
> Vol 1.
> 2 Rosdolsky, R (1977 {German Original 1968) Transl Pete Burgess, *The
> Making of Marx's 'Capital'* London, Pluto: chapter 2 argues that Marx
> originally intended to do so.

There are some interesting (at least, for me) archiotronic questions here.

Although one could argue with Fine that the trpf could have been better
presented at the end of V1;

1) One might argue instead that the "absolute general law of capitalist
accumulation" could have been presented, along with the trpf, in V3.

2) Since the trpf is presented in V3 as the "law of the tendency for the
general rate of profit to decline", one could argue that the presentation
of the LTGRPD presupposes the prior exposition on the general rate of
profit in V3, Part Two.

3) It seems to me that the position that the trpf belongs in V1 best fits
into an interpretation which holds that the subject of V3 is "capital in
distribution" rather than the stated subject of "The Process of
Capitalist Production as a Whole."

4) Relatedly, another question concerns the extent to which an
examination of "many capitals", rather than "capital-in-general", is
required for understanding both the LTGRPD and the "counteracting
factors." For instance, how are the subjects of the *distribution of
surplus value* and *competition of capitals* related to understanding the
LTGRPD as a process?

[This seems to me to be related to the quandry posed by the Okishio
Theorem. I.e. if one examines the redistribution of surplus-value and
profit with technical change and competition, then an individual
capitalist who introduces a new process technology which raises the
_social_ productivity of labor receives "surplus profits" via a
redistribution of surplus-value and, thereby, experiences a
transitional increase in the firm's rate of profit. Under competitive
conditions, other capitalists within the same branch of production can be
expected to _attempt_ to follow suit. Is this not an example of what
orthodox economists call the "fallacy of composition"? That is, *of
course* no capitalist will introduce a new technology which s/he believes
will lower his/her individual rate of profit (we didn't need Okishio to
tell us that obvious fact!), *but* capitalists are compelled by the force
of competition to introduce technical change *and* they believe _ex ante_
that they will experience an increase in their individual rate of profit
as a result. *Yet*, although *some* capitalists will benefit (through the
redistribution of surplus-value, although they wouldn't perceive it as
such), the very process of technical change by increasing the organic
composition of capital causes the *general* rate of profit to fall. Thus,
the general rate of profit falls precisely as a consequence of attempts by
individual capitalists to increase their individual rate of profits. In
that sense, one could claim that a belief that the general rate of profit
will rise as a result of technical change is an "illusion created by
competition" in the sense that what is true for some individual
capitalists (i.e. they experience transitional increases in individual
firm profitability following technical change) is believed to also hold
on the aggregate level for the general rate of profit].

> 3. Others who have argued against the interpretation of the trpf as a
> (empirical) trend include John Weeks (1981): 205; Cutler, Hindess, Hirst
> and Hussain (1977) Vol 1: ch.6

I think we agree here in the sense that before one can make empirical
statements about the trpf that have meaning, one must first locate the
trpf within an overall systemic understanding of capitalist accumulation
which takes into account the "counteracting factors" as well as other
systemic tendencies and contingent factors. I.e. *even if* we can *observe*
empirically that the general rate of profit falls, that does not by
itself tell us *why* the general r falls.

> 4. In Reuten and Williams (1989): 118ff we point out that the 'general law
> of capitalist accumulation' of Vol 1 is clearly the tendency to
> over-accumulation. We finish up this addendum with the following: 'Before
> the theory [of the trpf] can be confronted with with the empirical the
> articulation of these tendencies [over-accumulation and trpf, grounded
> respectively in profit-squeeze and underconsumption, and devaluation and
> centralisation - see the nifty figure on p. 141, and ch.5] and their
> interconnection with economic policy (see Part Four) has to be theorised.
> Further concretisation may then have to take account of contingencies that
> require detailed historical and conjunctural examination.'

The figure on p. 141 is indeed "nifty", but it (and the Geert/Mike W
book) raises important questions about the determination of "tendencies
of accumulation" and the "articulation" of those tendencies. Although
there is an attempt to *systematically* grasp those tendencies rather than
to simply assert them in a multi-causal exposition of crisis theory (as
in Kautsky's multi-causal hodgepodge which emphasizes the "laws [sic] of
motion"), I would like to read more about your value-form perspective on
the relation of the "tendency of over-accumulation of capital" (TOC) and
the TRPF to the subjects of "labour-shortage profit squeeze",
"labour-shortage underconsumption", "devaluation of capital", and
"centralisation of capital." For instance, how do you see these
tendencies manifesting themselves during different phases of the trade
cycle and in what (if any) [typical] sequence?

In solidarity, Jerry