[OPE-L:7490] [OPE-L:1027] Re: Regulating Capitals

Tsoulfidis Lefteris (lefteris@uom.gr)
Thu, 03 Jun 1999 16:02:01 +0300

John R. Ernst wrote:
> In OPE-L 1011, Tsoulfidis Lefteris wrote:

> If one tries to test empirically Marx's proposition of the tendential
> equalization of the interindustry profit rates (in a period of fat and
> lean years) by just examining the long run tendencies of interindustry
> _average_ rates of profit it is likely to find convergence of
> interindustry profit rates around the general rate of profit. This
> appears to contradict the tendential equalization of profit rates
> argument.
> My comment: Can you explain this a bit more.

See my reply to Allin Cottrell.

> The trouble, however, with these studies is that they do not really test
> Marx's idea. In Marx the equalization of profit rates takes place only
> for the regulating capitals (see also Botwinick 1993), which in general
> differ from the average. An example could be in agriculture where the
> regulating capital is the marginal capital which of course differs
> substantially from the average.
> My comment: I have even more questions about this.
> 1. When Marx transforms values into prices of production, is it only
> the regulating capitals to which he refers?

No, the concept of regulating capital appears mainly in the theories of
ground rent. In the discussion of the TP and also competiton (chs 8-10)
are at high level of abstraction and there is the assumption that
average conditions=to regulating conditions.

> 2. Is the regulating capital *always* the capital that is most profitable?
> Or, might there be exceptions in, for example, agriculture?

The answer is no, again I refer to my reply to AC but also see Mason's

> Tsoulfidis Lefteris wrote:
> The operationalization of the concept of regulating capital and the
> associated with it profit rate is discussed in (Shaikh: The Stock Market
> and the Corporate Sector, 1995) but also in Christodoulopoulos
> (dissertation 1996) where it is found that there is equalization of
> profit rates for the regulating capitals for several industries
> internationally. In a book published recently in Greek (Issues in
> Political Economy: The Case of Greece. co-authored by Maniatis, Tsaliki
> and Tsoulfidis. It is shown that there is interindustry equalization of
> profit rates for the regulating capitals and not necessarily for the
> average capitals.
> My comment: Again, questions.
> 1. Where do we find the theoretical argument for the concept of
> regulating capital?

In Vol. III on the chapters differential and absolute rent pp. 614-813.

2. I'd like to check out the Shaikh piece. Where is it published?

Is in working paper form No 146 in Jerome Levy Institute, in New York

Lefteris Tsoulfidis