David Laibman's reply

[rakeshb@xxxxxxxxxxxx]

Hi Rakesh,
  This is a quick response, in the midst of mucho work.  Will go over
your question in more detail later.
  I haven't been looking at TSS/FRP stuff for a while; currently turning
my attention to, of all things, aggregate supply in the short run!  But
here goes.
  I *think* (will check this) that the FK assumption w (or v) = 0 is not
so bad; extreme, of course, but it stands in for w constant.  This, of
course, is their point: the *value* profit rate falls, *even if* the
real wage is constant.  I think they (and I) can generalize from w = 0
to w = const > 0 without too much trouble.  The issue between us, of
course, is my Tracking Theorem: *except in special cases* (the ones they
use in their numerical examples), the value rate *eventually* follows
the material rate (without being identical to it.  So their attempt to
portray a rising "material" rate and falling "value" rate simultaneously
-- pardon my French! :-) -- cannot be sustained.  I have always sought
to affirm the likelihood (not the inevitability) of a falling *material*
rate; this, I think, is a genuinely critical immanent tendency.  From my
point of view, in conceding to orthodoxy a rising (what they call)
material rate, FK have given away the show.
    best,
     David