[PEN-L:4885] Re: profit-rate equalization

[dhenwood@xxxxxxxxx (Doug Henwood)]

At 2:13 PM 4/28/95, Jim Devine wrote [responding to my observation on the
failure of the disperson of profit rates to narrow during the 1980s]:

>Just because capitalism involves a tendency for profit rates to
>equalize between sectors (in the absense of barriers to mobility)
>doesn't mean that profit rates actually equalize. As Farjoun and
>Machover argue:
>
>"in a capitalist economy, the very forces of competition, _which
>are internal to the system_, are responsible not only for pulling
>an abnormally high or low rate of profit back towards normality,
>_but also for creating such 'abnormal' rates of profit in the first
>place." (LAWS OF CHAOS, Verso, 1983, p. 34, their emphasis)
>
>Not only is there an endogenous tendency for profit rates to
>equalize, but endogenous tendencies toward
>innovation, centralization, etc.
>lead to disequalization. I don't think Marx really took this
>conflict of opposing tendencies as seriously as he should have.
>(He followed Ricardo to assume equalization when
>discussing the so-called transformation problem. My article
>on that problem in the 1990 RESEARCH IN POLITICAL ECONOMY
>tries to get away from the Ricardian assumption.)

My point wasn't that there's a wide dispersion of profit rates, which is
obvious enough, but that the decade's deal frenzy, which should in theory
have tended to reduce dispersion, had no effect. Isn't that a teensy bit
interesting?

Doug

--

Doug Henwood
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