1. You didn't respond to my criticism of Brenner's explanation for the recovery in the US mfg. profit rate.
2. You have Brenner wrong. He dismisses the idea of upward pressure on the OCC as Malthusianism.
Let's say you start with five workers ($1 a piece) and five pick axes ($1 a piece). Let's say you now replace this with one more skilled worker at $2 with an $7 jack hammer. Intuitvely this seems to be an investment that is at a higher technical composition (the worker has been supplied with a greater mass of tools), though the organic composition does not rise proportionately with the TCC but still is much higher than the previous investment.
This would seem to be Marx's idea. Plus, no matter how more productive the single worker is, it would seem that at some point, Marx thought, he wouldn't be able to produce as much surplus value as five workers had, though these relative low wage earners were doubtless exploited at a lower rate (that is, even at lower wages it took more of their working day to perform necessary labor).
Now there are two problems here. If rate of profit falls from use of jack hammer, why introduce it all? It could only be introduced if in fact the rate of exploitation had risen to more than compensate for the rise in the OCC.
Marx's point of course is that this will seem to be the case for the individual entrepreneur who actually is enjoying a transfer of value from elsewhere in the system, even as he contributes to a higher OCC on total capital by which the general rate of profit, which exists independently of individual entrepreneurs, is reduced.
The second problems: why will technical change always be of this labor saving type? Couldn't future technical change simply reduce the labor required to produce an even more powerful jack hammer, thus reducing its cost to say $5. In this way, tech change would be reducing the OCC over time and thus potentially raising the profit rate.
Of course if the labor required to operate the new cheaper, but more powerful, jackhammer was halved, then the OCC would still rise because innovation was not only capital saving but also labor saving as well.
Yet Brenner probably thinks Marx was focused on labor saving machinery characteristic of early capitalism, instead of capital saving innovations that fall from the trees like ripe fruit in an advanced capitalism in which science and technology have been advanced and subordinated to profit making needs
I think this is the basic idea of Brenner's, and it does not require a repudiation of value theory to be made.
In my opinion Marx is arguing as a result of rising OCC, total (indirect and direct) labor costs per unit decline over time (no Malthusianism at all!), though the ratio of constant to variable capital per unit tends to rise, which then tends to limit the surplus value each unit can embody.
Of course if spread over a large enough number of use values, the lesser surplus value per unit need not yield a declining mass of surplus value at all. But then Marx himself emphasized that the mass of surplus value would tend to increase over time. Yet there are social and physical limits to the rise in the rate of surplus value even as constant to variable capital in the system increases as a whole. Remember to each capitalist the relative expulsion of labor seems to be the most effective source of exceptional profit--that's why motivates in the system as a whole upward pressure on OCC (Carchedi describes this well in this latest issue of Historical Materialism).
So Marx thought from the perspective of capital as a whole, the mass of profit would grow as the rate fell on an ever larger total capital investments. However, he did not think a decline in the rate of profit would kill capitalism off by itself; indeed he underlined Richard Jones' observation that accumulation of additional constant and variable capital seemed to speed up with a fall in the rate of profit (that is, Marx seems to have thought that as rate of profit falls, percentage of surplus value that is accumulated tends to increase--why this is so would have to be explained of course).
Suffice to say, the emphasis on declining profit rate as itself cause of crisis and stagnation runs counter to Marx's own theory.
3. It's not obvious at all why addition of low cost capacity leads to overproduction or the kind of price wars Brenner suggests. One has to explain why effective demand is insufficient to absorb all the greater ouput at at least prevailing rate of profit. FROP theory, which Brenner rejects, attempts to explain why effective demand becomes insufficient, yielding that excess capacity Brenner takes to be effective cause of crisis.
4. I haven't read Ellen Wood's defense of Brenner's emphasis on horizontal relations yet.
Yours, Rakesh