[OPE-L:6017] Re: rentier state

From: Gerald_A_Levy (Gerald_A_Levy@email.msn.com)
Date: Tue Sep 25 2001 - 19:44:25 EDT

Rakesh wrote in [6016]:

> i am having problems with mail, but i think that
> you have challenged nwoke's
> argument by saying that coal is not a perfect
> substitute for oil.
In my previous post I did not use the expression
"perfect substitute". Rather, my claim is that _in
general_ coal and oil can not be viewed as
being substitutes.
> I think your
> reasoning was based on the physical differences between the natural
No again. Rather, the differences concern the
use-values of these two separate commodities.
Thus, it is not simply that coal and oil have
physical differences -- rather,  the issue is how
certain types of technologies and labor processes
require a particular form of energy and/or
resource (or alternatively, how a transition to
alternative technologies or processes would
require a considerable expenditure of
capital and writing-off of existing constant capital).
>   OK but does Nwoke's argument depend on coal being a perfect substitute?
That part of Nwoke's argument that links the
price of oil to the price of coal depends on the
claim that the two commodities are substitutes.
> Moreover, to the extent that there are no substitutes for the exhaustible
> resource of oil, wouldn't there be a stronger possibility of monopoly
> and thus absolute rent in the production of oil?
so i do not understand your  point.
I'm not challenging the idea that oil-producers
receive a monopoly profit. Rather, I am saying
that it should be evident that there is no necessary
reason to suppose that the price of coal governs
the price of oil. If there is an implication to my
argument it is that oil-producing companies
(especially when organized into a cartel) have
a *greater* monopoly power to set the price of
oil on world markets than that suggested by the
author you cited.

In solidarity, Jerry

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