I don't know these specific arguments, but I would bet they are the
conventional one that says that, since the value rate of profit is:
s/(c + v)
then it is equal to:
(s/v)/[(c/v) + 1]
The numerator, s/v, is the rate of surplus value, and c/v is the OCC.
This is interpreted as implying:
>that, in the abstract, expanded
>reproduction with a growing organic composition can go on *forever* as
>long as the surplus value rate is also allowed to increase.
BUT:
Define Marx's notion of "living labor" as:
L = V + S
His notion of "dead labor" = C
Then the value rate of profit:
[S/(C + V)] = [(L-V)/(C+V)]
This allows us to determine the upper and lower bounds of the rate of profit:
As more total labor time becomes paid labor time:
V à L and
r à 0
As more and more total labor time goes to surplus value:
S à L
V à 0 and
r à (L/C)
Now we are ready to state the:
Proof of the Law of the Falling Tendency of the Rate of Profit (LFTRP)
rmin = 0
rmax = (L/C)
(rmax - rmin) = [(L/C) - 0] = (L/C)
This is the profit rate band.
If, over time, (C/L) is rising (and (L/C) is falling), then the profit rate is
being squeezed downward.
This has nothing to do with what is happening to (S/V), because (V + S = L).
In fact, Marx thought that the LFTRP was associated with a rising (S/V).
(Of course, this can be explained and is not simply a mathematical argument.)
This is from Anwar Shaikh's Columbia University doctoral dissertation,
available at his New School website. Shaikh's thought was influenced by
Grossman.
Julio wrote:
>This is wrong! Krasnov and Fridman [and Oskar Lange and others] show
>that, in the abstract, expanded reproduction with a growing organic
>composition can go on *forever* as long as the surplus value rate is
>also allowed to increase.
Tugan-Baranovsky said the same thing:
"Even if all workers were replaced by machinery except for one worker, this
single worker would be able to put into motion the vast mass of machinery, and
with its help create new machines-and means of consumption...The working class
could disappear; this would not disturb in the least the self-expansion of
capitalism."
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