Jim Devine wrote:
To be serious, it seems to me that how one measures the degree of "capital intensity" of production (the OCC) depends on one's theory and the purpose of one's research.
For example, I would measure the OCC in a deliberately "incorrect" way. I use K/Y, the ratio of the stock of fixed capital to total output. This would measure who was winning in the race between the tendency for capital intensity (K/L, where L = labor hired) to rise and the tendency for labor productivity (Y/L) to rise. The former tendency (that Marx stressed) is only relevant to determining profit rates when the latter tendency (which is often an effect of the former) is weaker.
This leaves the problem of units of measure. If K is
a quantity
of Marxian labor-time-units, then K/L is just Marx's
Organic
Composition of Capital when L is *productive* labor
performed;
if L is total labor (productive+unproductive) then
"labor
productivity" becomes meaningless; if K is a so-called
"real" quantity then all the measurement problems
in
calculating the "real" capital stock--especially
the
totally defective price indices for capital goods and the
grossly approximative allowances for depreciation and
obsolescence--deprive the resulting numbers of any
relevance.
In addition, this approach can never give a theoretical
grounding
to the "Law of the Falling Tendency of the Rate of
Profit"
because under it there is no necessity for the productivity
of labor to tend to increase less rapidly than capital
intensity.
However, when the Marxian units of measure are used
consistently it can be proven that, whatever rate of
increase of labor productivity results on average and over
time from increasing Organic Composition, the rate of
profit *must* tend historically to fall (even though, for
limited periods, this tendency can be denied expression by
the
"countervailing factors" discussed by Marx).
Shane Mage
"When we read on a printed page the doctrine of Pythagoras that all things are made of numbers, it seems mystical, mystifying, even downright silly.
"When we read on a printed page the doctrine of Pythagoras that all things are made of numbers, it seems mystical, mystifying, even downright silly.
When we read on a computer screen the doctrine of Pythagoras that
all things are made of numbers, it seems self-evidently true."
(N. Weiner)
