[OPE-L:6349] (Monopoly) Rates of Profit?

Gerald Levy (glevy@pratt.edu)
Tue, 24 Mar 1998 12:26:15 -0500 (est)

Paul C wrote on Tue, 24 Mar:

> I have for years treated monopolies as simply an extension of the
> phenomena of rent. Certain industries can sell their product well above
> its marginal value and thus earn monopoly profit. It should be noted
> that the phenomenon of monopoly profit can be explained simply at the
> level of value production. It does not need a concept of an average
> rate of profit. Microsoft can sell programs at way above their value
> because the costs to the user of having a non-standard operating system
> set the only limit on its price, and intellectual property law enforces
> an artificial restriction on people just copying the software.

Well .. let's see how simple it is to explain this at the "level of value

You suggest that the "user" pays the additional cost. I.e. the user pays a
market price above [individual] value which reflects a monopoly rent.

Let's break this down. There are several types of "users" including:

a) business firms.

b) capitalists and other non-working class members as individual

b) workers as consumers.

Now, what is the effect of the monopoly rent?

A. For a), does the redistribution of profit to Microsoft lead to a
decline in the profit rates for all other firms?

How does Microsoft's rent factor affect the profit rate for Microsoft's

B. Does Microsoft's monopoly rent mean that there is a redistribution of
income derived from surplus value and profit away from other
capitalists to Microsoft and Bill Gates because capitalists *as
individual consumers* are paying higher prices for computers and
related equipment? E.g. what is the impact of monopoly rent on the
standard of living of those capitalists who purchase "luxury" goods for
individual (unproductive) consumption?

C. If workers *as consumers* pay this rent, doesn't this mean that the
real wage and standard of living of workers is thereby lowered? Thus,
can capitalists lower real wages for workers if they mark-up consumer
goods for workers at a market price in excess of value? Isn't the end
result similar to a wage reduction and decrease in the value of

In solidarity, Jerry