I think that if stock capital is read as sunk capital then the passage
makes all the sense in the world. See how he mentions large productive
industries railroads contant capital largest in its relation to
variable capital.
These are like or may even be monoplies ort near-monoploies (high barriers
to entry and do not participate in profit equalization) but if calculations
are made on entire investment then a low rate of profit obtaions. Reminds
me of Brenner when writing of US 'old capital' competing with new Japanese
and German capital after WWII.
http://books.google.com/books?id=MdzRuGutydYCpg=PA44lpg=PA44dq=Brenner+sunk+capitalsource=blots=XvirFDu8cxsig=2yav1NxJKrrNz9IU-BmDzm-y62Ahl=enei=9BzOSt-BNpHuswPE57W_Dgsa=Xoi=book_resultct=resultresnum=3#v=onepageq=schrumpeterf=false
leading to low rates of profit.
The fact that they (by virtue of monoploy postition) are withdrawn from the
equalization process thus leading to a higher (than would be otherwise)
general rate of profit.
JAI
- Original Message -
From: S. Artesian sartes...@earthlink.net
To: Activists and scholars in Marxist tradition
marxism@lists.econ.utah.edu
Sent: Sunday, October 11, 2009 10:54 AM
Subject: Re: [Marxism] Stock Capital and the rate of profit
You're not alone. I've read that section over and over, worked for
railroads, and studied the economics of railroading, and I'm still not
sure that I grasp Marx's thought on this completely.
I think, and emphasize think, that Marx finds that the portion of capital
represented in the issuance of stock and producing dividends is not part
of the process of creating a general rate of profit because the dividend
rates are so much lower than the average rates of profit.
Of course, as Michael Milliken and the LBOs, vulture investors, asset
strippers have proven, that situation can be reversed-- utilizing the
purchase of joint stock companies to award themselves dividends,
interests, payment far above the actual rate of profit, in effect
liquidating the company from the inside.
The stock-capital could be included, added to the constant capital,
employed in production, but if so, then the rate declines even more. I
think, again emphasize, think we see something along these lines if you
look at the US Dept. of Commerce Quarterly Financial Review of
industries-- there you see rates of return calculated as a return on
equity, and rates of return calculated on net property, plant, equipment.
- Original Message -
From: brendan cooney callmecoo...@gmail.com
To: David Schanoes sartes...@earthlink.net
Sent: Sunday, October 11, 2009 1:24 PM
Subject: [Marxism] Stock Capital and the rate of profit
I have been puzzling over a paragraph in Volume 3 of Capital. I was
hoping some kind and wise soul on the list might be able to help me
understand it better. In the chapter on counteracting influences on the
falling rate of profit Marx ends with a paragraph about the way in which
Stock Capital enters, or doesn't enter into the rate of profit. I can't
seem to wrap my head around Marx's argument. I understand that the
division of surplus value into rent, interest, industrial profit, etc.
is secondary to calculating the rate of profit. But then he says that
interest payments don't go into the leveling of the general rate or
profit, giving the example of railroads. Is he saying that joint-stock
companies don't enter in the equalization of profit rates b/c dividend
payments are lower than the real profit rate? Or is he saying that
joint-stock companies do enter into the equalization of the rate of
profit but must calculated in terms of total mass of profit in these
industries and not just interest payments? How is this a counteracting
influence?
Lawrence Harris' entry on forms of capital and revenues in the
Dictionary of Marxist thought says that joint-stock companies
represented a unique historic stage in capitalism and act as a
counteracting influence on the FRP because of their willingness to
accept a lower yield as a result of the dominance of interest. But I
don't see how a lower yield halts a falling rate of profit. I suppose
that I may have to wait until I get to Part 5 of Volume 3, but that may
take some time at the rate I'm going.
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