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I had written:
> I think Michael and I are agreed that placing Marx's
> transformation procedure in a static context is unfair
> to Marx....
Yes surely Marx's own attempts to elucidate the transformation
are posed in entirely static context.
Here I think we may be using "static" in different ways. If
by static we mean a static picture of a theoretical economic
system that can and does undergo technical change and is merely under
observation at a point in time, I have no problem with viewing
Marx's context as static. If, on the other hand, by static we mean an
theoretical economic system in which there is no evidence that
technical change has ever occurred and in which none is
ever anticipated, then to impute this type of static context to
Marx is surely without foundation.
I had written:
> Michael pointed this out by noting that in times of rapid
> technical change it becomes impossible to estimate the life
> time of fixed capital.
I think that is a defensible statement about the "real world",
but wasn't Marx quite happy with straight-line depreciation most
of the time (with the presumption of a known lifetime for fixed
My comment: Here I would add that Marx includes moral depreciation
as part of overall depreciation when he uses straight-line depreciation.
In so doing, Marx assumes that the economic life time of fixed capital
is less than its physical lifetime. To arrive at even a good guess
for the economic lifetimes, you have to know the prices at which
commodities trade. Otherwise, how can you determine whether or not
fixed capital can be profitably used?
I had written:
> Unlike Paul, I find no problem with computing an average
> rate of profit at a point in time for an economy in which
> technical change is taking place.
Insofar as "computing an average" is just a matter of
arithmetic, that's OK. I understand Paul to be saying that the
/significance/ of the average rate of profit is in question:
that is, will it act as an attractor for a set of dispersed
sectoral rates of profit at some intial point in time, under
conditions of dynamic changes in technology and demand?
My comment: In a discussion I had with Fred last summer, he
referred to a passage in Marx in which the claim was made by
Marx himself that a number of prices of production were fairly stable
over relatively long periods of time. No one would doubt
that during those long periods technical change was taking
place. With Marx, I do not think that relatively stable
prices of production are incompatible with technical change.
Prices of production computed under the usual assumptions of
equilibrium have a place in modern economic thought. Sraffa
computes relative prices in his critique. He does so for
Sadly, more than a few of his followers think that his work provides
either a useful correction or a necessary criticism of Marx.
My point is that it does neither. Indeed, it forces one to read into
Marx assumptions and concepts that simply aren't there. To his
credit, Sraffa himself never did this.
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