[OPE-L:6474] Re: Re: Competition and equalization of profit rates - an abstract

Eduardo Maldonado Filho (eduardo@orion.ufrgs.br)
Sat, 18 Apr 1998 12:34:54 -0300

Jurriaan wrote (re: 04/16/98)

> Jerry writes in response to Eduardo's points on the equalisation of the
> rate of profit,
> > I agree with the above. I wonder: do others?
> I certainly do. It accords fully with Marx's own text and with the
> empirical evidence, as Ernest Mandel already pointed out in 1960.
> However, even if all of the above is true, it may _also_ be the case
> that
> > there are other variables (e.g. related to market structure) inhibiting
> > profit rate equalization.
> Which is why any specific empirical analysis of capitalist development
> must necessarily involve a "multi-causal" approach.

It is certainly true that there are many variables which restrict capital
mobility and therefore affect the speed of the adjustment process. But from
this it does not follow that the concept of market structure (and hence the
so-called market structure variables) has any bearing, from the standpoint
of Marx's theory, on this question.

In fact, the concept of market structure (i.e., the merger of the concepts
of competition and market) is a neoclassic construction (see, for example,
Stigler on the history of perfect competition and MacNulty's comment on
Stigler's paper). For the classical/marxian approach, competition is viewed
as a process and not as a given equilibrium state. Thus the relevant
variables are those which concern the conditions of production and
circulation of commodities. For example, the so-called entry barriers maybe
interpreted, form the standpoint of Marx's theory, as conditions which
influence speed of the mobility of capital between industries and therefore
as variables which define and/or influence the conditions of production and
circulation of commodities and, as consequence, the speed of the
equalization of profit rate. These are conditions of the competitive
process, not the market structure.

I will come back to these issues in my answer to Jerry's post, which I will
send soon.