I had written the following to which Max responded:
>> RB: To say that capital flows here because of unlimited investment
>possibilities flatly contradicts and is incompatible with any labour theory
>of value. Investment of capital demands surplus values. But surplus vlaue is
>labour and in any given country labour is of a given magnitude. From a given
>working population only a definite mass of surplus value is extortable. . .
>MS: Why is that? Labor productivity is not limited the way or to the extent
>that labor time is. Consumption can certainly expand.
But labor productivity is exactly what is not improving in the present pseudo boom. That is why it has taken so much employment expansion in order to deliver the greater output; why that is so has to be explained by those who tout the emergence of a new economy. Even the minor improvement in productivity growth is a sham: once the business cycle is corrected for and inflation properly measured, output has probably not increased sufficiently to justify the recently .3% increase in productivity growth. The profit projections implicit in the 9500 Dow have no basis in the amount of surplus value extortable from the proletariat available for exploitation by American capital. Even if labor productivity were improving and necessary labor time being further pushed downward, still not enough surplus value could be extracted to justify the rising stock exchange the explanation for which must thus be found elsewhere. The paradox of course is that its rise can only be explained on the basis of the law of value though rising equity values are indeed incompatible with it.
rakesh