Fred Moseley wrote that the Mattick/Moseley theory of crisis [along with other theories of crisis based on Marx's ideas] > has everything to do with the rate > of profit, which is the crucial variable in Marx's theory, and which > Brad does not mention at all. This is to be expected I guess, because > the rate of profit is not a variable in mainstream macroeconomics. Can > you imagine? A theory of capitalism without a theory of profit! It is > like physics without a theory of energy. This is a point of clear > superiority of Marx's theory over mainstream macroeconomics.
In Keynes, the concept of the rate of profit is replaced by the "marginal efficiency of capital [goods]," which is different from Marx's concept because it has a heavy subjective component. [The MEC is "defined in terms of the expectation of yield and of the current supply price of the capital-asset. It depends on the rate of return expected to be obtainable on money if it were invested in a newly produced asset; not on the historical result of what an investment has yielded on its original cost if we look back on its record after its life is over." -- JMK, GT, chapter 11.] This concept seems a measure of the _expected_ rate of profit. In the abomination that is "mainstream macro" (see the textbooks), the Keynesian MEC is replaced by the "marginal productivity of capital [goods]" (the MP of K). Contrary to the fallacy of composition, an aggregate production function is assumed, allowing the derivation of the MP of K. Given this kind of nonsense, it's not surprising that otherwise intelligent economists would believe in "rational" expectations and the like. I don't have my copy of Brad deLong's book here, so I can't tell if he falls for the MP of K crap or not. -- Jim Devine / "Segui il tuo corso, e lascia dir le genti." (Go your own way and let people talk.) -- Karl, paraphrasing Dante. _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
