> Right. I'm assuming the system is Pareto optimal. If it is, shouldn't h + r
> tend towards 1 for the same reason that economic profit tends towards zero
> in neoclassical economics (under the right conditions?) If all goods are
> reducible to labor (no worries about finite deer) and we can freely switch
> between production of them prices should equilibrate proportional to labor
> costs, or there would be Pareto efficient moves available.
>
> This should apply whatever the values you impute to needed meat per day, &c.
> There is the special case of e.g. all labor-power is currently employed
> hunting subsistence levels of meat, and fletching now (and letting a few
> people starve) will let us get to a new level where we can permanently
> expand, which of course has some important parallels in real-world primitive
> accumulation/accumulation by dispossession, but which I assume we're
> abstracting away from in the ideal case.
There's a reason the Wikipedia deer, beavers and arrows example looks a lot like the neoclassical theory of profits and can be read in the way you suggest. It's because it's an Adam Smith example, in which there is no class division (hunters themselves decide whether to spend the day hunting or fletching arrows) and no great quantity of capital required to enter a new line (there is no constant capital requirement to fletching arrows, and the 'capital goods industry' is more labour-intensive than the 'consumer goods industry').
Even in this case, there may be no profit in the neoclassical sense, but there will be an interest rate, because the acquisition of arrows, whether through producing them or purchasing them, means temporarily forgoing consumption. So the 'rent' to the arrow owner will reflect supply-and-demand conditions based on willingness to postpone consumption. That is, arrow production is 'saving' in this world.
Now, you say this is 'the ideal case' and the case where accumulation has to happen through the forcing of a surplus is the special case which only has parallels in 'real-world primitive accumulation/accumulation by dispossession'. It seems to me to be the other way around - it's only because you approach it from the perspective of textbook neoclassical economics that it seems to be the general case, and it's symptomatic that the assumptions pile up: "intertemporal equilibrium with no barriers to entry, no supply shocks, &c... "
'Intertemporal equilibrium' is a pretty big assumption, and while you acknowledge that there are real world 'deviations' you suggest these would have no systematic effect on the determination of profit. On the contrary, real historical time, in which it takes time to accumulate capital, over which technological change is happening, and in which the future is uncertain is essential to Marx's theory of profit - and I would call this a more general case - you can abstract from all those things but if your theory ends up saying there is no possibility of profit, you probably want to go back and let some of them into the picture again.
Neoclassical economics comes to the conclusion that there is no profit in equilibrium only when it calls profit other things: returns to entrepreneurial labour, interest, rent, etc. It's very important to realise if you're coming from neoclassical perspective that Marx's theory of profit is actually a theory of interest in the neoclassical sense - a point Schumpeter stresses. It's not a quasi-rent on particular capital goods, it's the rate of return on capital in general, i.e. on the monetary sum sunk into production. (Marx also has a monetary theory of interest, just to complicate things further, but it's not incompatible - it's like Wicksell's two interest rates).
It is crucial to a Marxian theory of profit that the supply of capital (in this sense, _not_ the supply of capital goods) depends at any given time on prior accumulation - savings, basically. But rather than relate savings to an average time preference across society, he emphasises that it mostly accumulates out of previous surpluses. It is not difficult to fit into the theory other sources of saving, out of wages etc., or the forcing of a surplus from 'new' money-capital mobilised by the banking system. But surplus from previous production is the main game.
It's easiest to understand the theory if, rather than dealing in
abstract equilibrium time, you think of it as first simply positing an
average rate of profit at a point in historical time, inherited from
the recent past, and ask what would cause it to go up or down. So
first you posit a given wage, employment, labour productivity (and
therefore output) and capital stock (in the above sense). That also
gives you a surplus, which is the difference between the wage bill and
output, and a profit rate (abstracting from rent, interest, tax etc).
>From that profit rate you get a maximum rate of capital accumulation
(maximum because some of it will be consumed by the capitalists).
Whether the actual rate of capital accumulation drives the profit rate
up or down depends on whether the pressure of demand for labour it
generates drives the wage up, the extent to which it increases the
capital stock and the extent to which it increases output, and at the
same (historical) time interrelated processes of competition and
technological change are changing labour productivity and capital
intensity.
Marx abstracts these processes to some extent and deals with them bit by bit: for example, if capital accumulation increases the demand for labour faster than technical development reduces it, the real wage will tend to rise, lowering the rate of profit, slowing accumulation again. So tendencies that would eliminate the return on capital tend to be checked. That there is and will be a rate of profit is based on the fact that there was a rate of profit and the tendencies tending to eliminate it are checked by tendencies that recreate it - though Marx thought like many classical economists that there was a very long run tendency towards the elimination of profit, which he put down to a tendency for the capital stock to rise relative to output.
I'll quote Schumpeter's 'History of Economic Analysis' [1954] again since he seems to address exactly the problem you have with it: "According to Marx, surplus value is a costless gain, like Ricardian rent. It might be thought that such a gain would induce individual capitalists - whose individual contributions to the total output of their industries is too small to influence prices - to expand output until the surplus falls to zero. This conclusion is indeed inescapable so long as we keep to the schema of a stationary process; such a process could not be in equilibrium until the surplus is eliminated. But we may save the situation by taking account of the fact that Marx thought primarily of an evolutionary process in which the surplus, though it has a tendency to vanish at any given time, is being incessantly recreated. Or else we might drop the assumption of perfect competition though the surplus we may salvage in this way will be quite different from Marx's." [p. 651]
I agree with your wanting to avoid bullshit - but don't dismiss the whole thing on the basis of a Wikipedia article! And again, this all has nothing to do with the 'transformation problem', but is about rival theories of the source and nature of profit. If you want a good comparative study of Marxian and neoclassical theories of profit, which takes both seriously, I recommend Michael Howard's [1983] 'Profits in Economic Theory'.
Mike Beggs