Brad De Long wrote:
And Nike doesn't earn an extraordinary profit.
Doug
It doesn't?
NKE:
Income Statements
Sales (ttm) $8.90B
EBITDA (ttm)$1.13B
Income available to common (ttm)$547.5M
Profitability
Profit Margin (ttm) 6.1%
Operating Margin (ttm) 9.9%
MSFT:
Income
G'day all,
Sed Doug:
Technical progress, protected by IP restrictions, may boost the
profit rate,
To which Carrol responded:
I'm not sure I follow this. IP restrictions protect Capitalist A from
having his/her product ripped off by Capitalist B. How does it
increase the whole profit of
On Fri, 16 Jun 2000, Michael Perelman wrote:
DRAM is not protected by IP. It is regarded as a commodity, like wheat or
soybeans. A processor chip is protected.
This may be changing, though -- new and more complex types of DRAM, like
Rambus' RDRAM, are indeed protected by IP agreements.
Dennis, you are exactly on target. Rambus has the advantage of IP
protection. Since it will be incorporated by Intel into its design, the
sort of commodification that occurred with RAM probably will not repeat
itself. I suspect that the fear of Rambus explains the hesitancy to
produce more RAM
Anthony D'Costa wrote:
IP can raise the profit rate, complementing the weakness of labor. But
what is IP? It is an institutional arrangement to appropriate
"knowledge" for capitalists' gain. IP is directly related to
technological change, a process which in cumulative fashion pushes for
more
Doug Henwood wrote:
Technical progress, protected by IP restrictions, may boost the
profit rate,
I'm not sure I follow this. IP restrictions protect Capitalist A from
having his/her product ripped off by Capitalist B. How does it
increase the whole profit of Capitalist A + Capitalist B?
Because Capitalist A, facing little or no competition, can earn more than
Capitalists A and B together.
Carrol Cox wrote:
Doug Henwood wrote:
Technical progress, protected by IP restrictions, may boost the
profit rate,
I'm not sure I follow this. IP restrictions protect Capitalist A
Anthony wrote:
But what is IP? It is an institutional arrangement to appropriate
"knowledge" for capitalists' gain. IP is directly related to
technological change, a process which in cumulative fashion pushes for
more IP. The reason is competition is built on technological strength
Jim Devine wrote:
Michael Perelman's main example of IP (or at least the one he emphasized)
was Nike's branding. He also referred to IP in music (on CDs), videos, and
software. Except for the last, there's no obvious connection between IP and
"technological strength."
A point I raised on
The difference between Nike and Morton is that stores will only sport shoe stores
only sell products that are heavily advertised. Go to an athletic shoe store.
Try to find something other than Nike, Reebock, Even New Balance only sells
running shoes.
Last time I hurt my foot on the court,
Carrol Cox wrote:
Jim Devine wrote:
Michael Perelman's main example of IP (or at least the one he emphasized)
was Nike's branding. He also referred to IP in music (on CDs), videos, and
software. Except for the last, there's no obvious connection between IP and
"technological strength."
On Fri, 16 Jun 2000, Jim Devine wrote:
Anthony wrote:
But what is IP? It is an institutional arrangement to appropriate
"knowledge" for capitalists' gain. IP is directly related to
technological change, a process which in cumulative fashion pushes for
more IP. The reason is
Or the absence of B allows A to rip off an enormous amount.
Anthony D'Costa wrote:
In the aggregate, Capitalists A and B can increase profits (as a share of
total costs?) because of IP. It's not A ripping B but both A and B
ripping everybody else.
Anthony, I suspect that a small fraction of IP is a new way of doing/making
something. It includes copyrights, brand names, patents on ways of doing
business [which is usually not new at all]
Anthony D'Costa wrote:
I had in mind IP as "new ways of making/doing things." Specifically,
Brad De Long wrote:
IP protections can create value; IP protections can destroy value;
they can raise the profit rate; they can raise or lower the real
wage...
How can they raise the overall profit rate? Obviously they can raise
individual profit rates, but by what mechanism do they boost
Michael Perelman wrote:
I agree with Jim's first point.
Jim Devine wrote:
1. Actually, I'd _agree totally_ with Doug's statement -- unless the rise
of IP has changed the ability of capitalists to depress real wages via
monopoly pricing (i.e., unless somehow the rise of IP strengthened
Let me start out by saying that I have no doubt that intellectual property
increases surplus value, just as if the entire economy consisted of a region, such
as San Francisco, which experienced a rapid increase in rents, surplus value
increased relative to what goes to labor.
Doug asks for
Michael Perelman wrote:
Let me start out by saying that I have no doubt that intellectual property
increases surplus value, just as if the entire economy consisted of
a region, such
as San Francisco, which experienced a rapid increase in rents, surplus value
increased relative to what goes to
I thought that I answered this before using the logic that I find
reading LBO. To the extent that intellectual property protection
confers the ability to mark up goods, workers must labor more hours to
buy the same goods, leaving more hours available for surplus value.
Doug Henwood wrote:
I have never denied the effect of the weakening of labor. I am merely stating that
IP represents an additional force, which is becoming stronger, just as capital may
have pushed labor down in the US as far as it can go -- the last thought is a
speculation, not even a firm belief.
Doug Henwood
Michael Perelman wrote:
I have never denied the effect of the weakening of labor. I am
merely stating that
IP represents an additional force, which is becoming stronger, just
as capital may
have pushed labor down in the US as far as it can go -- the last thought is a
speculation, not even a
Michael Perelman wrote:
I thought that I answered this before using the logic that I find
reading LBO. To the extent that intellectual property protection
confers the ability to mark up goods, workers must labor more hours to
buy the same goods, leaving more hours available for surplus
Again, IP is not the sole determinant. You might say, if you were to imagine an
IP-only explanation, that it fueled the stock market boom, which allowed wages and
profits to both increase. Again, we don't have the data, but the rising wages
would be consistent with a higher rate of
IP can raise the profit rate, complementing the weakness of labor. But
what is IP? It is an institutional arrangement to appropriate
"knowledge" for capitalists' gain. IP is directly related to
technological change, a process which in cumulative fashion pushes for
more IP. The reason is
First of all, I want to thank everybody who has responded to this. It has been very
useful to me.
There are enormous differences in the rate at which IP information dissipates.
Copyrights now last 70 years. Patents, 20. Patents used to be given for processes
in the production of chemicals,
I wrote: Marx's "law of value" is first and foremost NOT a theory of
prices.
Brad ripostes: I was responding to Doug Henwood's statement that: Any
sense of how representative these sorts of goods are? I'd guess that gains
from IP [intellectual property] are merely redistributions of SV
I agree with Jim's first point.
Jim Devine wrote:
1. Actually, I'd _agree totally_ with Doug's statement -- unless the rise
of IP has changed the ability of capitalists to depress real wages via
monopoly pricing (i.e., unless somehow the rise of IP strengthened the hand
of capital in its
. . . I don't undeerstand what you mean about IP creating/not creating
value.
Maybe he means that IP can devalue pre-existing IP
and reduce revenues and, consequently, rents and
measured labor productivity.
Also, when IP becomes sufficiently ubiquitous and
commodified (i.e., "Xerox"), the
Michael Perelman wrote:
Jim also mentioned that wages are falling relative to labor
productivity. I associate this trend with intellectual property as
well. Labor productivity increases with the ability to mark goods up --
Nike shoes are an excellent example, but the same holds for
Brad, I am too dense to know when you are serious. I don't even know who Will
Robinson is.
A pop culture reference to "Lost in Space": think of it as the
modern-day equivalent of a gratuitous: "hic rhodus, hic salta!"
I assume that you know that most people here know that "average market
Brad, Marx's theory of value is not nearly as mechanistic as you make it out to
be. In fact, he never used the term, LTV. Meek and Dobb and some other
interpreters presented the LTV as a mere expansion on Ricardo. I suspect that you
already know this, but like to act as a curmudgeon.
The
No necessity to talk about the factory floor. The product of intellectual labour
(i.e., intellectual property) does have value. But it is the intellectual labour
which creates value not the intellectual property. Changes in intellectual property
enforcement change the incentives of the
He used _relative surplus value_ and _absolute surplus value_..
aren't these parts of LTV by definition?
Mine
Brad, Marx's theory of value is not nearly as mechanistic as you make it
out to be. In fact, he never used the term, LTV. Meek and Dobb and some
other interpreters presented the LTV
Yes, but the expression, labor theory of value, was not used by Marx. It
comes later. The expression itself give a sense of a fairly mechanistic
analysis. It lends itself to just adding up C + V+ S. Marx's theory was not
mechanistic.
[EMAIL PROTECTED] wrote:
He used _relative surplus
So the whole transformation problem was a big mistake?
--jks
In a message dated Tue, 13 Jun 2000 4:43:42 PM Eastern Daylight Time, Michael
Perelman [EMAIL PROTECTED] writes:
Brad, Joan Robinson used to write the same thing. Just forget about
prices. If the goal of value theory were just
I would argue that it was, since the object was merely a formal algebraic
transformation.
I wrote about my interepretation of value theory recently in the Cambridge J. of Econ.
[EMAIL PROTECTED] wrote:
So the whole transformation problem was a big mistake?
--jks
In a message dated Tue,
Michael Perelman wrote:
Jim also mentioned that wages are falling relative to labor
productivity. I associate this trend with intellectual property as
well. Labor productivity increases with the ability to mark goods up --
Nike shoes are an excellent example, but the same holds for Microsoft
Brad, I am too dense to know when you are serious. I don't even know who Will
Robinson is.
I assume that you know that most people here know that "average market prices
are *not* labor values" and that that fact does not invalidate what most
people mean by the LTV.
I don't undeerstand what you
In a message dated 6/10/00 5:51:54 PM Eastern Daylight Time,
[EMAIL PROTECTED] writes:
My reading of the discussion of the waterfall -- and Marx's theory of rent
in general -- is that the waterfall "creates" surplus-value _for the owner
of the waterfall_ but not for society as a whole. One
At 12:25 PM 06/11/2000 -0400, you wrote:
In a message dated 6/10/00 5:51:54 PM Eastern Daylight Time,
[EMAIL PROTECTED] writes:
My reading of the discussion of the waterfall -- and Marx's theory of rent
in general -- is that the waterfall "creates" surplus-value _for the owner
of the
On Carrol's example ...
A nationwide frenzy to buy and trash navel oranges develops. Suddenly
the price of navel oranges shoots up. The profits of the wholesalers who
currently hold most of the crop certainly shoots up. But no extra value is
created. So where does that extra profit come from?
Michael Perelman wrote:
Carrol, you are partially correct. Yes, some profits/surplus value will be
transferred to the owners of the organges. To see the problem that
I am considering
go back to Marx's idea of looking at the working class in its
entirity. As the
mark-ups increase generally,
Doug, I am sorry if I gave the impression I thought that IP was the only factor
at work. I would not deny the importance of any of the factors that you
mentioned. I would only add that the increasing markup over cost does work to
lower the real wage.
By the way, I very much appreciated your
Michael Perelman wrote:
Doug, I am sorry if I gave the impression I thought that IP was the
only factor
at work. I would not deny the importance of any of the factors that you
mentioned. I would only add that the increasing markup over cost does work to
lower the real wage.
In No Logo, Naomi
In a message dated 6/9/00 6:53:35 PM Eastern Daylight Time,
[EMAIL PROTECTED] writes:
don't think that I as suggesting that the origin of profit is in
exchange, but
in an economy dominated by monopolies profits will be higher than in a
competitive economy, ceterus paribus.
But doesn't
don't think that I as suggesting that the origin of profit is in
exchange, but in an economy dominated by monopolies profits will be
higher than in a competitive economy, ceterus paribus.
justin writes:
But doesn't that mean that the origin of SOME profit is in exchange,a s
Marx indeed
Michael Perelman wrote:
Jim also mentioned that wages are falling relative to labor
productivity. I associate this trend with intellectual property as
well. Labor productivity increases with the ability to mark goods up --
Nike shoes are an excellent example, but the same holds for Microsoft
Doug, I am not sure how representative those goods are, but I think that
class would include most of the so-called new economy as well as the strong
brands.
I do not believe that Nike's strength nearly transfers surplus value from
Reebok. In fact, I go back to the old economics of the '50s and
Michael Perelman wrote:
I do not believe that Nike's strength nearly transfers surplus value from
Reebok. In fact, I go back to the old economics of the '50s and '60s that
paid some attention to the role of markups in the distribution of income.
When Nike mark up its shoes and people feel
Doug, you often use the semi-Marxist measure in your popular writing of
estimating how many hours someone would have to work to buy a particular
commodity. Think of the markups in the following way. Suppose each good
experiences an increased markup, while nominal wages remain unchanged. What
Michael Perelman wrote:
Doug, you often use the semi-Marxist measure in your popular writing of
estimating how many hours someone would have to work to buy a particular
commodity. Think of the markups in the following way. Suppose each good
experiences an increased markup, while nominal wages
I don't think that I as suggesting that the origin of profit is in exchange, but
in an economy dominated by monopolies profits will be higher than in a
competitive economy, ceterus paribus.
Doug Henwood wrote:
First, doesn't this theorize the origin of profit in exchange rather
than
Doug wrote:
Any sense of how representative these sorts of goods are? I'd guess that
gains from IP are merely redistributions of SV - it can't explain an
increase in the profit rate in the macroecomy. Nike's gain is some other
capitalist's loss, no?
As I understand Michael's point, he's
Jim shows the an excellent understanding of what I have been imperfectly
attempting to express. I agree that I have no proof that the rise of
intellectual property has been sufficient to increase the average rate of
profit, even though I'm convinced that I'm correct in this respect. Jim's post
Michael Perelman wrote:
I do not believe that Nike's strength nearly transfers surplus value from
Reebok. In fact, I go back to the old economics of the '50s and '60s that
paid some attention to the role of markups in the distribution of income.
When Nike mark up its shoes and people feel
Jim Devine wrote:
But given the over-all rate of profit (determined largely by the
state of class relations, which determines the profit share of
output, along with the overall output/capital ratio), the
above-average profit rates of the old US Steel or the new MS (or
Nike) correspond to the
These is a dialectical relation, but there was something else going on in
the last thirty years. For instance, in the auto industry. The big three had
a oligopolistic situation in North America. The entrance of the Japanese
firms in the 1970s increased the competition. But now in the world auto
Of course, neither Nike nor MSFT by itself is representative. I seem to
recall that Nike has not been doing nearly as well lately, but I don't
follow the business press.
Doug Henwood wrote:
Jim Devine wrote:
But given the over-all rate of profit (determined largely by the
state of class
Michael Perelman wrote:
Suppose each good
experiences an increased markup, while nominal wages remain unchanged. What
workers end up with shrinks and surplus increases. Maybe I'm just missing your
point.
The point in dispute concerns the conditions under which only *some* goods
Carrol, you are partially correct. Yes, some profits/surplus value will be
transferred to the owners of the organges. To see the problem that I am considering
go back to Marx's idea of looking at the working class in its entirity. As the
mark-ups increase generally, workers give more hours
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