fred's theory

Fred B. Moseley fmoseley at
Tue Sep 27 22:02:38 MDT 1994

On Mon, 26 Sep 1994, donna jones wrote:

> Fred, I have been reading  (and learning much from)your  interesting
> exchanges in RRPE and Science and Society, and I am writing a longer post
> to you.  But I have a few quick questions. (And I really liked your piece
> on the transformation problem, though while I have understood the prior
> determination of aggregate surplus value, I have yet to understood fully
> the critique of linear production theory). OK here are the quick questions:
> 1) Wouldn't declining profit rates force a thorough-going rationalization
> of unproductive expenditures?

Yes, and I think that is happening today, although the extent to which
these efforts will be successful in raising the rate of profit remains
to be seen.

> 2) Couldn't increased circulation expenditures be explained (somewhat)
> independently of competition?  That is, as unit values decline and must
> thus be spread over a greater mass of use-values, mustn't  commercial
> activity rise in order to dispose of them?  Isn't it this pressure to
> realize a greater sum of use-values that explains the rise in unproductive
> expenditures?  Another way of putting the question: is the rise of
> unproductive expenditures an independent variable, or itself the outcome of
> the mass production made necessary by  declining unit values which are
> achieved (for the most part)through increases in the organic composition of
> capital? I actually think something important hangs on this question, but I
> haven't yet been able to articulate it.
Yes, again.  I argue in my book (Chapter 5) that the main cause of the
relative increase of unproductive labor has been that the productivity
of labor increases faster in production than it does in circulation.
To the extent that this is a general rule of capitalist production,
it is another important cause of a decline of the rate of profit.

Thank you for your kind comments, and I look forward to receiving your
longer post and to further discussions (Paul Mattick told me about you).



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