Subject: [OPE-L:1885] Re: Stock and flow measures of the profit rate
From: Gerald Levy (glevy@PRATT.EDU)
Date: Fri Dec 10 1999 - 15:38:42 EST
Assuming a flow rate of profit makes it easier to conceptualize the
mobility of capital that occurs with the formation of prices of
Yet, if we are going to talk about a "standard model" expressing Marx's
formula for the rate of profit, surely it would be s/c+v where c would
include constant circulating and constant fixed capital. Thus, the
existence of capital as (partially) a stock (fixed capital) is presumed
in the formula for the rate of profit.
Now, what happens to the value of constant fixed capital when capitalists
are "exiting" a branch of production is an interesting question. One could
argue that the value of the constant fixed capital is transferred to other
capitalists (i.e. re-distributed among capitalists) or you could claim
that aggregate value is thereby diminished (and *not* conserved). One
could argue, in this connection, that value can be diminished because of
the *material form* that constant capital can take within the production
process and its limited and (usually) task-specific use-value. A more
contemporary question might be to ask how this is potentially changing due
to the advent of flexible (re-programmable) automation.
In solidarity, Jerry
> What does Paul understand by "Marx's standard model"? (And whose standard,
> by the way?)
> Does this imply that M. had some other model using a different rate (a stock
> rate, by implication), which he sometimes used?
> More importantly, what stands to be gained or lost by using flow rates as
> against stock rates?
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