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-------Original Message-------
Hi Paul,
Even if there is no actual tendency toward equal rates of profit in
some capitalist economies, I think it is still important to explain
profit rate equalizing prices of production because:
1. This is still a possible state of capitalist economies, which a
theory of capitalism should be able to explain.
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I am doubtful that it is a possible state of capitalist economies. Capitalist economies are inherently random and the probability of profit rates converging on a single value seems very small indeed. There are a large number of possible distributions of profit rates, and the particular distribution assumed in the transformation problem is no more probable than any other. Do we need unique theories for every possible distribution of profit rates?
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2. The alleged contradiction between this possible state and the labor
theory of value has been the main reason given be economists and others
over the last century for rejecting Marx?s theory.
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I can see this as a political motivation, but this argument is based on a counterfactual assumption, would it not simply be easier to point out that the assumption on which the argument against the labour theory of value has been based is a wrong assumption?
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3. This is an intermediate step toward the further explanation of
long-run center-of-gravity prices that do not equalize the rate of
profit. In this further development of the theory, the same
fundamental premise would be maintained ? that the total surplus-value
is determined prior to its distribution, and is not affected by that
Distribution.
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I agree with your last point, but I am unconvinced that the theoretical apparatus used in the TP debate can be sucessfully applied to stochastic models - if that can be done, who has done it?
Comradely,
Fred
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