Rakesh writes >I also had written the following on which Gil did not comment: > > >>To say that additional capital is increasingly in short supply vis a >>vis the new and displaced laboring population as accumulation >>progresses only means that in the course of accumulation the >>primordial source of this capital, surplus value, becomes >>progressively more scarce, too small, in relation to the already >>accumulated mass of capital
I skipped this because my response would have been redundant: i.e., whether or not surplus value becomes "progressively more scarce...in relation to the already accumulated mass of capital" has no particular relation one way or another to the question of whether labor is subsumed under capital, and thus no particular reason to venture into the "hidden abode of production." Again, there's no reason to think that the possibility that surplus value becomes "progressively more scarce" can't be demonstrated in the context of the appropriate empirically motivated Walrasian model. >Gil replies: > > >>I rid, I mean read, this statement as corresponding to Marx's KI/25 >>analysis of "the general law of capitalist accumulation," to the effect >>that any rise in wages above subsistence due to demand pressures from >>capital accumulation is necessarily self-limiting, since the resulting loss >>in profit leads to a corresponding reduction in the rate of accumulation. >>(This self-limitation is further reinforced by tendentially rising OCC.) >> >>But I don't see why anyone has to venture into "the hidden mode of >>production" to yield *this* particular point. > > >which point exactly? the point in the excised paragraph above about >the primordial source of capital? Yes, necessarily, since it's equivalent to the point I answered explicitly. >> For example, Marx's argument >>holds if it's true that the only funds for accumulation come from the >>retained earnings of capitalists. This result could certainly be generated >>by the appropriate (and empirically motivated) Walrasian intertemporal >>model. I took this issue up in my response to Roberto Veneziani when I >>suggested there was no necessary connection between the economic conditions >>leading to the subsumption of labor under capital (i.e., capital's reign >>over the "hidden mode of production" and those capable of explaining the >>persistent scarcity of capital in the face of capital accumulation. > >How do you explain persistent scarcity? What do you mean by scarcity? Re the second question, you first: what did you mean by the phrase "progressively more scarce" in the paragraph you appended at the top of your post? It's likely we mean very much the same thing by this term. The first question is not at issue. What *is* at issue is whether the appropriate explanation can be couched in Walrasian terms. In your post 23776, you suggested it could not be. >You refer at some point to capital constrained equilibrium--is this a >well understood defintion of scarcity to the economic theorists on >the list? Are these questions taken up in your formal reply to >which Roberto V has referred? I think so, but you'd have to ask the other economic theorists on the list re the first question. On the second, yes. >By the way, what do you make of Keynes' argument about the >relationship between the declining marginal efficiency of capital as >capital becomes less scarce though not necessarily less physical >productive? What is the connection between the scarcity to which you >refer and Keynes' nebulous idea of capital scarcity (or the lack >thereof)? Re the second question, roughly speaking, a condition of capital scarcity implies the marginal efficiency of capital is strictly positive. On the first question, I suspect the distinction Keynes is alluding to involves the difference between *physical* and *revenue* productivity. An investment may lead to a new machine being built, but not necessarily to any money being made from the use of the new machine. > >> I took this issue up in my response to Roberto Veneziani when I >>suggested there was no necessary connection between the economic conditions >>leading to the subsumption of labor under capital (i.e., capital's reign >>over the "hidden mode of production" and those capable of explaining the >>persistent scarcity of capital in the face of capital accumulation. > >I am not suggesting a "necessary" connection. If there is no necessary reason to refer to the hidden mode of production in discussing reasons for persistent capital scarcity, then I believe I've answered your criticism of the Walrasian framework that prompted this exchange. >>Exactly. And *given* such socially-determined differences [in time >>preferences--rb], I show that one >>can account for the persistence of capitalist exploitation. > >Well, this very concept of time preferences surely needs unpacking. For some purposes, at least, I would surely agree. Gil
