[OPE-L:7481] [OPE-L:1018] Re: Re: Re: Marx's concept of prices of production

Paul Cockshott (clyder@gn.apc.org)
Wed, 2 Jun 1999 11:27:33 +0100

Ian, we have done it both ways, using flow measures for the UK
where it is difficult to obtain statistics for capital stock that match
the I/O table data, and using fixed capital stocks for the USA.
In both cases one obtains a negative correlation between organic
composition and rate of profit.

As to the effects of rent, it is not always possible to exclude this
since it does not appear in the statistics as a clear category. If
we take primary production industries, the I/O tables will show
rent as part of the profit of these sectors. There is no clear
way of extracting rent from the data that does not involve prior
theoretical assumptions about equalisation of profit rates.

However when one looks at plots of the data, one finds that
the insustries with high organic compositions of capital and
which also fall close to the average rate of profit( but still below it) are
in two
categories - state regulated monopolies like electricity supply
and primary production industries like oil and natural gas. These
latter would be expected to have a significant rent component
in their profits.

We find the a significant negative correlation between profit
rate and organic composition of capital whether or not interest
is included in the profit figure.
-----Original Message-----
From: Ian Hunt <Ian.Hunt@flinders.edu.au>
To: ope-l@galaxy.csuchico.edu <ope-l@galaxy.csuchico.edu>
Date: Wednesday, June 02, 1999 5:08 AM
Subject: [OPE-L:1015] Re: Re: Marx's concept of prices of production

>I agree with Tsoulfidis Lefteris and John Ernst that you have to be careful
>that your empirical study actually engages with Marx's theroetical concept.
>Marx's theoretical concept of prices of production abstracts from rent and
>interest, but not from fixed capital. You have to be sure that your measure
>of the rate of profit connects with the ratio of profits (exclusive of
>interest and rent) to the capital stock (rate of return on investment)
>rather than the ratio of profits (inclusive of rent and interest) to the
>capital flow. But then the authors of the studies ought to be able to say
>whether this has been done.