[OPE-L:3314] RE: accumulation of capital revisited

Gerald Lev (glevy@pratt.edu)
Mon, 7 Oct 1996 13:33:39 -0700 (PDT)

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Andrew K wrote in [OPE-L:3306]:

> There is no model under consideration.

Tell that to Duncan, Fred, and everyone else who has referred to the
what we are discussing as a one-sector model.

> There is an example which people are
> studying in order to help clarify certain issues, even though no one
> thinks it represents an actual or possible reality.

Do you want your model -- oops, illustration -- to say anything at all on
no, then the whole exercise is useless except possibly as a critique of
Okishio. If your answer is yes, then you have to construct an illustration
in which accumulation is at least *theoretically* possible.

> Not as I understand "Paul Z's" definition (which is also Marx's). If
> increasing c + v means that the sum of c and v in period t+1 exceeds the sum
> of c and v at time t, there can be accumulation even with a fall in v,
> as long as it is offset by a larger rise in c.

You weren't paying attention to the old accumulation of capital thread
(called "defining and understanding accumulation" in April -- 87 posts,
posts, you would remember that Paul Z. argued that accumulation means that
*both* c *and* v are increasing from one period to the next. [As others
will recall, Paul and I had quite an extended argument on just this
question].

Given *Paul Z's definition* [ ... which you agreed was " also Marx's"
definition ... :-}], accumulation is a theoretical impossibility in your
"illustration" as we move from time t to time t + 1 since V *can not*
increase from one period to the next [I'll let you debate this one with
Paul; he and I enchanged enough posts on that topic already. Have fun!].

> "(2) Unless we are to allow v to be *less than* 0 at time t + 1, why would
> capitalists introduce labor-saving innovations at time t?"
> Given v = 0, a technical change will be viable in Okishio's sense if
> the ratio
> of corn input to corn output falls - what John and folks generally call
> capital-saving tech. change. It may also be labor-saving. For instance,
> assume 4 bu. of corn and 100 hours of living labor yield 5 bu. corn at
> time t,
> but 6 bu. of corn at time t+1. In a one-sector example with v = 0, the
> simultaneist profit rate will rise from 25% to 50%.

If v = 0, then no rational capitalist would introduce labor-saving
technical change at time t since labor is working for free. Even if we say
"very, very, very" small v, there would be little reason to introduce this
type of technical change since wages could be expected to be "very, very,
very" low.

> That's
> okay, because it is now generally agreed that the TSS interpretation can get
> results dramatically opposed to those of Okishio and the surplus approach for
> reasons that have nothing to do with the particular assumptions employed in
> the example, so it is these underlying differences that are being examined at
> the moment, not the theorem.

Duncan , Fred, and Bruce (I think) agree. This does not mean, though, that
there is "general agreement" that the TSS results are not sensitive to the
particular assumptions chosen.

In Solidarity,

Jerry