One answer is simply that these factories, lands, and
>brothels in the Third World are locales of "the counteracting causes" to the
>tendency of the falling rate of profit. They increase the total pool of
>surplus labor, help depress wages, cheapen the elements of constant capital,
>and tremendously expand the labor market and make possible the development of
>high-tech industries which directly employ only a few knowledge workers or
>cyborgs. But another complementary answer can be gleaned from Part II of
>Capital III: "Conversion of Profit into Average Profit," which shows the
>existence of a sort of capitalist self-valuation. In order for there to be an
>average rate of profit
>throughout the capitalist system, branches of industry that employ very
>little labor but a lot of machinery must be able to have the right to call on
>the pool of value that high-labor, low-tech branches create. If there were no
>such branches or no such right, then the average rate of profit would be so
>low in the high-tech, low-labor industries that all investment would stop and
>the system would terminate. Consequently, "new enclosures" in the countryside
>must accompany the rise of "automatic processes" in industry, the computer
>requires the sweat shop, and the cyborg's existence is premised on the slave.
Angela, I would like to believe this analysis by the insightful George Caffentzis who I have had the pleasure of meeting. But he seems to be drawing on Marx's five industry scheme in which the formation of production prices is analysed and then applying it to the variety of industries extant on a global scale. In that model however the rate of exploitation is assumed to be uniform; and that assumption simplifies the analysis, i.e., the demonstration that the law of value can only govern bourgeois society in the form of an average rate of profit, not directly by way of relative prices.
But by what right do we have to assume that in the real world the rate of exploitation is 1. uniform (Mark Blaug raises this criticism) or 2. simply sufficiently high enough in these high labor low tech third world industries to pump sufficient new masses of surplus value into the system as a whole to exert upward pressure on the global average profit rate?
yours, rakesh