Nuts and berries

Brad De Long delong at econ.Berkeley.EDU
Sun Dec 13 21:35:14 PST 1998

>Second, if the world remains in recession, then demand will not be
>sufficient for the skill intensive capital goods in which the US retains
>comparative advantage...
>In the context of a global recession brought on by a fall in the rate of
>profit, the most important counter-tendency is a rise in the rate of
>exploitation... In some cases, this will be achieved by
>moving industries abroad where wages will continue to be set by average
>productivity in those nations, not the marginal productivity of workers in
>the modern plants. In other cases, a higher rate of exploitation will be
>achieved in our own US through labor rationalisation, reduced overtime pay,
>cuts in safety regulation, speed ups and nastiness.
>I know this all very depressing, Brad. I think you need to understand that
>that edifice, the conception of general or full employment equilibrium that
>has hitherto seemed to you as an ideal illuminator, a lamp that only
>needed to be refined a little further and made yet more precise and subtle
>with Comrade Debreu to illuminate ever more brilliantly all corners of the
>economic field; that lamp that you mistook for an unshakeable citadel is
>really only your refuge, the refuge of a Platonist.
>Yours, Rakesh

I have never yet seen the Form of the "secularly falling rate of profit."

By contrast, I did once see the Form of "full employment and balanced growth without inflation." It was hiding beneath a small conference table in Laura Tyson's office. We knew it was there because of the shadows it cast on the wall. But when I looked beneath the table, it quickly slipped away...

Brad DeLong

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