Rakesh writes: >As I understand Schumpeter's argument in the chapter on "Monopolistic >Practices" in CSD, what may appear as rent in the static world of perfect >competition may actually be the profit required for the continuous >introduction of new and better machines or more generally innovation. >Eliminable rent becomes necessary profit from a long-term evolutionary >perspective. Good point. I should have thought of Schumpeter in the original post(s). Perhaps this is the link that connects "quasi-rent" and "rent" notions of profit. It has the advantage of being part of an intrinsically dynamic story, just like Marx's, the aspect I'm trying to capture with my notion on relative scarcity. However, Schumpeter is manifestly not talking about what Marx is (and therefore I am) talking about, as advertised in the title of the chapter which Rakesh cites. Schumpeter is talking about the truly monopolistic but necessarily temporary profits which accrue to a *single* successfully innovating firm. But Marx is careful to distinguish his notions of absolute and relative surplus value from the super-profit enjoyed by a single innovator: for example, relative surplus value is the increment in surplus value accruing when *all* capitalists in the relevant sector(s) adopt a given labor-saving innovation (or, if you'd prefer, some extra profit in the form of relative surplus value would remain even after all adopt the innovation). Although both Marx and Schumpeter are talking about intrinsically dynamic processes, their perspectives are essentially different: Schumpeter is talking about a succession of innovating capital*ists* (i.e., successive monopolists), while Marx is discussing the consequences of innovating *capital*. >It would seem to me that the equivalent to what you are calling rent would >be in Marx's theory "extra surplus value" not profit or surplus value as >such. Extra surplus value accrues to an innovating capitalist because the >difference between his individual and social value allows him to sell above >his supply price. As Marx shows and as Carchedi in *Frontiers of Political >Economy* has explained in detail, the innovating capitalist is able to >enjoy a redistribution of value produced by the working class as a whole. The last statement is true, but for the reasons given above this is not what I'm talking about. My notion of economic rent based on relative scarcity does not depend on the existence of monopoly power in Schumpeter's sense, and thus flows to all capitalists in affected sectors. Thus it seems to me that Marx's account as well as my representation of it could absorb Schumpeter's story without changing the fundamental conclusion. To be specific: I am *not* referring to "extra surplus value" in the above sense when speak of surplus value as an economic rent based on relative scarcity. >Here it is clear that what you are calling rent cannot be decoupled from >its foundation in the exploitation of the working class. It could not be decoupled from its foundation in the exploitation of the working class *in any case*, and nor have I ever intended it to. Just the contrary: to say that profit represents an economic rent on relative scarcity (rather than a "natural" return to risk-taking or abstinence) is to affirm that surplus value and therefore profit in general represents exploitation of the working class. Gil then provides an explanation for the scarcity of the means of production. [No, the passages Rakesh cites below do not constitute "an explanation for the scarcity of the means of production," as he suggests; rather they are an explanation for how it *might be possible* that commodities acting as capital can be relatively scarce, even though they are accumulable. See below for more details.] >>. However, accumulation can >>never be *instantaneous*, because this period's capital stock presupposes >>last period's production. Consequently, capital stock might be accumulable >>and yet *effectively* scarce in the absolute sense *at any given point in >>time*---giving rise to the possibility, which would have to be analyzed in >>historically specific settings, that the exchangeable item in question >>accrues economic rents in any period despite the fact of accumulation. This >>calls for a third notion of scarcity, which I call >> >>3) *relative* scarcity, which is defined to arise if (a) the long-run supply >>curve defined for any period of *real* time becomes vertical at some >>quantity, but (b) this quantity expands over real time. The visual >>representation of this case is as in (2), except that this representation >>has an explicitly *dynamic* aspect: the vertical portion of the supply >>curve shifts out over time. > > This seems to me to root the scarcity of the means of production again in >a natural condition (time); What? Of course producing the means of production takes time. It would be a bizarrely Escherian world in which workers could simultaneously produce commodities and the machines they use to produce *those same* commodities (recall Escher's picture of the 2 hands simultaneously drawing each other). In no way does recognition of this fact make the relative scarcity necessary for the existence of profit "natural"; see below. > there is no discussion here of the social >barriers to accumulation, That's only because Rakesh's citation above *left out* my subsequent passage which relates the above to "social barriers of accumulation"--here it is, straight from the original post: Thus, in this case economic rents may be accrued at any given point in time, but *reproduction* of these rents requires a story as to how supply shifts relative to demand over time--such as, for example, Marx provides in Ch. 25 of Volume I. That is, *Marx* provides the relevant discussion of the social barriers to accumulation. I'm only concerned with the narrower question of whether surplus value can be considered *consistent with* the notion of economic rent--which, I'd like to emphasize, of course it can. > >Also because so much capital is now "locked in", it is possible that >innovation in real time may lead to devaluation and thus the loss of value >needed for further accumulation. What may result then is a scarcity of the >means of production. But here we are talking about a *society* in which >the overproduction of the means of production actually results in social >disaster , while that overproduction actually creates a technical guarantee >against natural disaster and accident. Nothing in my discussion of economic rent based on relative scarcity can be taken to disagree with the above _per se_, as I've suggested above. Rakesh brings up difficult new issues here (e.g., do capitalists make accumulation decisions based on "sunk" values?) that are best dealt with separately, since their resolution doesn't affect my current argument. In solidarity, Gil
