[PEN-L:5049] Re: profit-rate equalization

[ikita@xxxxxxxxxxxx (Iwao Kitamura)]

Dear Penners,

On Mon, 8 May 1995 15:51:56 -0700 Jim Devine wrote:

>
>But once one has explained the origins of surplus-value,
>and one moves to the micro level of the jockeying of capital,
>risk can play a role. Capitalists thinking about investing in
>the wild-cat oil mining industry would need an above-average
>profit rate (expected, of course) to encourage them to take
>the plunge. This expectation should correspond relatively
>closely to an _ex post_, realized, high profit rate.
>
>addendum: as I argue in my 1990 article in RESEARCH IN POLITICAL
>ECONOMY, the macro and micro level are linked in a very
>simple way. Total Macro Surplus-Value = the sum of all micro
>property incomes, with the right-hand side of the equation
>fixed at any given time (and the value of money assumed to
>equal unity).  Risk-taking does not contribute to the total
>Macro Surplus Value, but can contribute to some capitalists'
>property income.  E.g., a pure risk-taker/speculator can
>earn a very high income ("pure" meaning that he or she does
>no other kind of action). But given the total Macro surplus-
>value, this lowers the amount of property income left over
>for other capitalists.  In other words, the above-average
>profit rate of the wildcatters of the previous paragraph
>means that the rest of the capitalist class will receive
>less-than-average profit rates.
>
>Extending Marx further, one can imagine a case where "risk
>taking" could actually raise the amount of surplus-value on
>the macro level. A capialist could take the risk of intro-
>ducing a new and different kind of class struggle against
>the workers. As when Frick ordered a fence built around the
>Homestead Works (complete with gun-platforms) and locked
>out the steelworkers in 1892 in order to break the union.
>But I think that this kind of risk is the type that only
>capitalists (or their agents) can afford to take and so
>is more a function of their status as capitalists.
>
>in pen-l solidarity,
>
>Jim Devine
>

I'm a very newcomer to this list and haven't read the original mail
by <GSKILLMAN@xxxxxxxxxxxxxxxxx> and preceedings. So, I'm afraid my
question below had been already well discussed.

I've been considering a story like the argument above for years to
explain behaviours of monetary capital on asset market.

1. Represented short-term or midium-term capital gain in asset market
is obviously _not_ based on produced surplus value. But there's no
difference for each capitalist between capital gain and profit from
production at micro level if both of them are in monetary form.
It suggests a possibility that sum of micro property gain doesn't match
with sum of macro surplus value. Of course micro property gain here
doen't equal micro property income that come from exploiting labour.
However, investment behaviour of each capital is determined by
each capital respectively. So there would be an inconsistency for capitalists
between micro and macro that would amplifies instability of capitalist
economy.
2. In the long-term, the problem above could vanish if capital gain had been
based on the accumulation of capital in production that would equal to reserved
surplus value. What we see today is no automatic regulation for the problem
even in a long-term basis. Growing outstandings of fiscal debt and consumer
credit continue to provide adding profits for capitalists. Then asset prices
reflect profits not only coming from surplus value in production.
3. I would not deny that 'Total Macro Surplus-Value = the sum of all micro
property incomes'. It's a very important point at principle level.
Nevertheless, to analyze contemporary capitalism at substantial level, I think
it important to study the more complicated system of distributing surplus value
among capitalists with relation to instability of capitalism.

------------------------------------
Iwao Kitamura
a member of theoritical study group
Socialist Association (Japan)
E-mail : ikita@xxxxxxxxxxxx
personal web: http://www.st.rim.or.jp/~ikita/