I'm still unable to post directly to LBO. Could you forward this
for me please?
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I thank Michael McIntyre for his thoughtful reply. Here are some
responses:
(1) "Perhaps, rather than use up bandwidth here, it would be
appropriate to ask Doug to post Kliman's paper from the Brecht
Forum event on the lbo website, from which point I (and others
interested) could get a better sense of the "Copernican
revolution" he speaks of."
I haven't thought of writing up a formal paper for the talk. A
lot has been written on these issues over the years. I'll be
happy to supply references. For academically trained economists,
I would recommend as a start:
_Marx and Non-equilibrium Economics_, Alan Freeman and Guglielmo
Carchedi, eds., Edward Elgar, 1996.
"A Temporal Single-system Interpretation of Marx's Value Theory,"
Andrew Kliman and Ted McGlone, _Review of Political Economy_,
11:1, January 1999.
I'll be happy to send offprints of the latter.
(2) "In some sense, the story Marx tells in chapter nine has to
be an equilibrium story, because it's a story about how you get
from a uniform rate of surplus value to a uniform rate of profit."
It is certainly an equilibrium story in *that* sense. But this
has gotten confused and conflated, over the years, with a
different notion of equilibrium -- stationary prices.
The reason for the confusion and conflation is that Bortkiewicz
claimed to prove, in 1907, that Marx's account of the value-price
transformation led to "internal contradiction," specifically to a
spurious disruption of reproduction, because Marx's input prices
(values) differed from his output prices. Bortkiewicz then
claimed to "correct" Marx's procedure by creaing *two systems*,
one in which input and output values were equal, another in which
input and output prices were equal (and the rate of profit was
also equal). It was this construction that negated the results
Marx had derived: total price = total value, total profit = total
surplus-value, the avg. "price" and "value" rates of profit are
the same.
In "The Transformation Non-Problem and the Non-Transformation
Problem," _Capital and Class_ 35, Fall 1988, Kliman and McGlone
disproved Bortkiewicz's claim that nonstationarity of prices leads
to a disruption of reproduction. The importance of this issue and
our refutation were not well understood, so we have returned to it
both in a paper in _Marx and Non-equilibrium Economics_ and in "A
Temporal Single-system Interpretation of Marx's Value Theory."
(3) [ Michael's point (2)]: "If you calculate the rate of profit
as a capitalist would, that is, as the difference between the
price of a commodity and its cost-price on a base of its
cost-price, then the rate of profit is not constant [uniform] in
Marx's calculations. Instead, in Marx's examples in chapter 9,
THAT rate of profit would vary from about 24% to a bit shy of
150%. So, it turns out, the rate of profit that capitalists would
care about is not uniform. In which case, why go through the
exercise of deriving a constant "r" in the first place?"
What Michael is calling the rate of profit is often called the
profit margin. Firms do care about it and compute it. But they
also compute and care about their rates of return on investment,
profit divided by investment. The rates of profit that are
equalized in Marx's account are rates of return on investment.
There is good reason to believe that investment funds *tend* to
flow to where the expected value of this variable is highest, and
thus, good reason to believe that it is this variable that
competition *tends* to equilibrate.
(4) "I cofess th