[OPE-L:6372] Re: (Monopoly) Rates of Profit?

Gerald Levy (glevy@pratt.edu)
Sun, 29 Mar 1998 07:56:23 -0500 (est)

Paul C wrote on Fri, 27 Mar:

> > How does Microsoft's rent factor affect the profit rate for Microsoft's
> > competitors?
> To the extent that Microsoft can sell products to other firms above
> their value then these firms profits fall at Microsofts expense.


> I suppose that the standard of living of the Rich may be marginally
> reduced by having to pay their license fee for Microsoft Office.

Agreed again.

> > 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?
> It should not be assumed that workers as consumers buy legitimate copies
> of software. There is in Glasgow a substantial cottage industry
> centered on the Barrows market at which any software can be had
> for its marginal cost of reproduction.

For the reason you cite, Microsoft was probably a bad example to choose to
discuss. I.e. it is a very exceptional commodity indeed if workers can
make copies themselves or obtain copies from others at minimal cost.
This just shows how one's selection of an example on the micro level can
lead to erroneous inferences if applied on the macro level (more
specifically, if we were to assume or infer that conditions
prevailing with Microsoft are typical for all business firms and markets,
then we would be committing the fallacy of composition).

btw, with some changes in the software (and the move to CD-ROM), isn't it
harder and more costly now to make unauthorized copies?

> It also depends what you mean lowered with restpect to.On one view,
> the real wage is not lowered, since the alternative, in the absence
> of the monopoly, would be to have software packages that were
> incompatible between different machines. The inconvenience represented
> by this would also be a reduction in the real wage. Standardisation
> represents a material gain in real terms.
> The other view is to say that if Microsoft were forced, say by legislation
> to sell its product cheaper then workers as consumers would be better

These are all possibilities in considering the Microsoft example.

> . If software sells above its value,
> then other commodities are forced to sell below their value.
> One would have to assume that software made up a disproportionate
> amount of the purchases of workers.

Suppose it isn't software, but means of consumption for the working-class
produced by monoploies or oligopolies in highly concentrated markets.
Under this circumstance, if these capitalists are able to mark-up their
prices in excess of value, then workers *rather than* other capitalists
would lose. That is, it would represent a redistribution of value among
classes rather than a redistribution of surplus value among capitalists.

Can you agree that this is a hypothetical possibility?

In solidarity, Jerry