cburford at gn.apc.org
Sun Jun 18 08:02:04 MDT 1995
Thanks very much for coming back on the
tendency but not the certainty for profit to equalise.
Frankly I find this area difficult, partly because it *is*
difficult, partly because I have not read Vol III of
Capital in full, partly because, to use Tom's favourite
word, your discourse is rather different from mine.
You are clearly confident in handling economic
mathematics in a way I am uncertain. So some
explanatory expansion from you is always helpful.
I would like to pick up your reference to Farjoun
and Machover. Their book claims to demonstrate a ratio
of total profits to total wages of almost one.
The worrying thing about this is that the range is
extremely narrow across time and countries. Coming from
the life sciences, I would say such a result is
incredible, and points to an artefact.
However Machover, in a personal communication, said the
phenomenon was also noted by Kaleski (sp?) which is
significant for the Keynsian school.
What do you think is going on?
From: Paul_Cockshott <wpc at cs.strath.ac.uk>
Date: Fri, 16 Jun 95 14:07:20 +0100
Subject: Re: profit equalisation
I can not say if individual capitalists
are aware of the tendancy for rates of profit
to be lower in industries with higher organic
Remember, that the average rate of profit on
capital is not available without statistical
research. What is obvious is the rate of interest
but this is a financial phenomenon. Differences
in real rates of profit will also be hard to
spot at the level of the stock market, since
the 'valuation' put on a firms capital there
tends to depend upon the interest rate and the
current mass of profit.
One should not assume that what actually happens
in the economy is 'what capitalists are willing
to accept'. Each firm tries to get the most
profit it can, but will not succeed. As to
counter tendancies, Farjoun and Machover argue
that in a stochastic system, all that is required
to cause the law of value to operate, is for there
to be relatively narrow dispersion of the
profit to wage ratio.
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