Political Economy After Economics by Laibman David

Author:Laibman, David
Language: eng
Format: epub
Publisher: Taylor & Francis

Table 4.2 Profit-rate time paths: a particular case

t

rm

rv

0

0.200

0.200

1

0.300

0.167

2

0.404

0.149

3

0.507

0.140

4

0.608

0.147

5

0.703

0.160

When the material rate rises to an asymptote, however, the value rate does fall to an asymptote. That is a second “moment” of tracking: long-run constancy of rm implies long-run constancy of rv. Moreover, in either the rising rm case or the constant rm case, the value rate always stays below the material rate; it never, in any of the simulations I have studied, converges upon the material rate. (I will discuss briefly the special “marginal valuation” case in which rv = rm below.) Temporal (time-lagged) value calculation does produce a real divergence between the two rates, although not one that supports a secularly falling rate of profit.

It should be mentioned here that all of these cases fall short of an adequate one-good growth model. Arbitrarily changing M* and X* from period to period, to fit a preconceived constant Y* and maintain “maximum accumulation” and constancy of the labor force, obviously will not do. But the somewhat superior assumption of constant M* and X*, together with constant L and constant wage (= 0) imposes arbitrary (and arbitrarily varying) consumption out of surplus value. A full treatment, closer to adequacy within the confines of the aggregative model, would have a given capitalist consumption ratio, a given growth rate of the labor supply, labor demand varying with the path of technical change and determining the wage rate, and – most significantly – a mechanism determining capitalists’ optimal choice of a degree of mechanization and path of technical change (see Laibman, 1997, for a detailed exposition of a model of this type). The cases examined here suffice, I think, to refute the FK notion of “two laws of motion” of entirely independent material and value realms.

If, however, we enforce the extreme assumptions of the FK baseline example – all output invested, constant labor force, constant growth rate of net output – then rv not only falls to an asymptote; it falls to a zero asymptote. This is the paradigmatic TSS case. Can it support the claim (made by FK in some contexts) that the value rate of profit necessarily falls? Hardly, because of the unreasonable restrictiveness of the extreme assumptions just listed. Moreover, we have not yet examined assumption (4): that the production turnover period is the same as the technical change period. In all of the examples studied thus far, productivity and the material-to-labor ratio both rise in every production cycle.

This is in fact the main basis for the apparent temporal drag: regardless of current productivity, the profit rate must be determined in relation to the value that was paid for the material inputs in the past. Capitalists can never take advantage of the ever-higher levels of productivity, because the year-ago transactions hang over their heads. Even though in this pure circulating capital world every input in production is entirely replaced in each period, the value of constant capital reflects last year's reality, and last year's reality reflects that of two years ago, in a sort of infinite regress weighing down the current value rate of profit.

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