From: "John R. Ernst" <ernst-AT-pipeline.com>
Date: Fri, 24 Nov 1995 12:40:08 -0500
Subject: Re: Note to Juan


Dear Juan, 
 
You're clear.   I do not think that is a problem. 
 
I do not know what the cannons/candies 4% means. 
 
The increases in the tech comp, like increases in 
real wages and like increases in productivity would 
be expressed as percentages.  That is, whatever units 
you use would have to cancel.   Frankly, I look at the 
matter as an index number problem.   
 
Let me see if this is helpful.  The actual numerical example 
in the GRUNDRISSE (pp 383-85), the stuff I pointed to and  
you found in Book III (pp108-9) of CAPITAL , and the  
passage from Marx in the second paragraph of Sec 4,  
Ch 15, Book III of CAPITAL all present the same idea 
from Marx himself.  The pattern of investment Marx uses 
would not result in a falling rate of profit in neo-Ricardian 
thinking.   Hence, they simply do not look at these sections. 
The types of investment that they impute to Marx's thought  
are quite different. They then argue against it (Sweezy using 
Dobb's interpretation) or "prove" that a FRP cannot occur as 
we see in Okishio. 
 
To get at this, I thought it might be a good idea to look at 
the technical compostition of captial and productivity.  After 
our prolonged exchange concerning this, I think I was wrong. 
Instead, I suggest we simply gain clarity on these arguments  
against Marx (See above.) and go at them. Ultimately, their 
"method"  will involve a misuse of the concept of value.   
 
Thus, our first task would be to see how and why they  
deny that the FRP would occur given that investment takes 
place as Marx describes in the examples cited.  
 
Regards, 
 
John 
 
 
On  Fri, 24 Nov 1995 Juan Inigo <jinigo-AT-inscri.org.ar> said: 
 
 
>John Ernst writes 
> 
>>We seem to be crossing paths in this thing.  At any 
>>rate,  as you will see I will not respond directly to 
>>your 11/23 post.  The new ground you cover which, 
>>at this point, we can regard as a side issue is 
>>worth mentioning.   Do you really want to say that 
>>we can not speak of increases in the real wage for 
>>the overall economy from year to year?  Do you 
>>really want to say that we can not speak of increases 
>>in productivity for the overall economy from year to 
>>year?   Maybe I am not reading your post correctly 
>>but I'd like some clarification. 
> 
>John, what I have really said again and again is that I want _you_ to tell

>_me_, since _you_ claim that it is possible to construct a model including

>a relation between increases in technical composition and in productivity,

>in what UNITS do you measure those increases. (To avoid wasting more time,

>please notice that in my 11/23 post I have shown that units of weight do 
>not fit concerning machines and tools with respect to technical 
>composition, since exactly the same technical change in those elemnts
would 
>be seen as an increase or a decrease in this composition depending on the 
>materials they are made of). To repeat myself: 
> 
>>a) The concrete "cannons/candies 4%" case is solved by adding increases
in 
>>productivity measured in units of ... ? 
> 
>>a) The increase in the technical composition of capital is measured in
units 
>>of ... ? 
> 
>Is it clear enough now? 
> 
>Juan Inigo 
>jinigo-AT-inscri.org.ar 
> 


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