Max Sawicky wrote:
> Thanks, Jim. Responses . . .
You're welcome!
> Monopoly does more than redistribute value. It reduces it in the short run
> (restricting output) as well. And the existence of monopoly rents is crucial
> in a number of other ways -- the ability to buy off workers, the increased
> capacity to invest, inflation of the incomes of "the 1%."
I don't think Marx would reject these points out of hand (though some
Marxists may). It's just not what CAPITAL volume I is about. It would
instead show up in volume III (or in the unwritten book on Wage
Labor).
> Regarding the measurement of 'c' (the depreciation component), there is the
> Cambridge critique. I don't blame Marx for not anticipating it, but it
> remains a basic conceptual flaw in the schema.
The Cambridge critique is about adding up individual types of means of
production: you can't find a single quantitative element inherent to
all capital goods ("leets," in Robinson's language) that allows you to
add up all the units. As I said in a different pen-l thread (which I
guess I should return to), we can't add up use-values. Instead, all we
can do is add up financial flows, i.e., the amount of money spent on
those use-values (or, using shadow prices, the amount of money those
use-values are worth on the market) or market values (for stock
magnitudes). In volume I of CAPITAL, that flow of money is (and that
stock would be) measured in "labor units."
The key result of the Cambridge critique is that (even when corrected
for the effects of inflation) the volume of financial flow
(depreciation, raw material costs) or the value of the stock of fixed
means of production are mathematically dependent on the rate of return
on capital. This means that we can't derive the rate of return from
the stock of capital (and an imaginary aggregate production function)
without engaging in circular reasoning. The NCs want to go from the
real stock of K to the marginal physical product of K to the rate of
return on capital (the reward for owning K). The Cantabrigians say:
that exercise suffers from the fallacy of composition! It's akin to
the rejection of representative agent models using general equilibrium
theory (see Alan Kirman's article in the 1992 JOURNAL OF ECONOMIC
PERSPECTIVES).
In volume I of CAPITAL, Marx basically sticks to an accounting
interpretation (assuming value = price). Constant capital (C) is
measured as a financial flow, as are variable capital (V) and
surplus-value (S). The rate of profit is then simply a ratio of C to V
+ S. As such, the Cambridge critique is irrelevant.
Actually, the rate of profit doesn't show up in volume I except quite
briefly. Marx's emphasis is instead on class relations, as represented
by the rate of surplus-value (S/V). (All else constant, of course, if
S/V rises, so does the rate of profit.) It's only in volume III that
the rate of profit plays a significant role, among other things
because it plays a role in intraclass competition among capitalists
(which Marx starts seriously analyzing only at that point). (The rate
of profit shouldn't really be S/(C+V), of course, but the ratio of S
to fixed capital, K, but that point is not important here.)
> In Heinrich, fictitious capital is the entire credit system. I always
> thought it was the component of paper assets not backed up by real
> productive capital.
that's pretty much what I said.
> On Marx's focus on the non-financial economy, my understanding is that these
> imbalances are expressed in the credit system. So we're back to financial
> fragility.
I was trying to say that there are two types of financial fragility.
The one you refer to here is due to the imbalances of the
non-financial sectors (their fragility). But there's also fragility
arising from the financial sector itself.
> Clearly some workers score some surplus value, but what is there in the
> basic, abstract theory that implies persistent 's', over and above normal
> returns to capital? My answer would be power. Capital arrogates 's' to
> itself because it has the state and the guns. But I don't see that in
> Heinrich/Marx until you get beyond the basic value theory.
In volume I of CAPITAL, after chapter 5 Marx presents a basic abstract
theory that implies a persistent positive S for capitalist society as
a whole. But that S _coincides with_ the normal returns to capital,
i.e., incomes earned simply because one owns K.
--
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
