For Marx Geeks ...

Dave Long
Thu, 16 Jan 2003 13:11:17 -0800

> 2) Nonetheless, Marx most observers do believe that Marx would argue
> that the nominal wage would eventually fall (to subsistence) due to his
> insistence that the natural rate of profit in a capitalist system was
> zero.

Well, being an optimist[0], I don't think
that the natural rate of profit averages
about zero, rather that it is closer to a
small positive percentage (since we don't
ever really equilibrate).

When I run simple simulations, though, I
see two different sorts of behavior: for
some sets of assumptions, zero behaves as
an absorbing barrier; for others, it is
more of a reflective one.

I think history shows plenty of examples
of the first kind: where over time, poor
freeholders are degraded, first to hands
and then to serfitude -- leaving only a
few owning much of everything. [1][2]

Such a system might indeed lead to both
immiserization and revolution; France,
China, and Russia are examples.

I also think America is an example of the
second kind: where over time, modal net
worth has remained positive.

On the left, one can argue that it is the
social safety net that causes the axis to
be reflective; on the right, one can argue
that it is capitalism's continual creation
of opportunity. [3]

Either way, the underlying sentiment seems
to be that one's situation ought to depend
more upon one's own pluck and luck, rather
than upon one's ancestors'.



[0] "The optimist proclaims that we live
in the best of all possible worlds, and
the pessimist fears this is true."

[1] consider the pre-1914 state of the
Hapsburgs, Hohenzollerns, Romanovs, and

[2] I have heard that under the Moghuls, 
estates were given as a sort of salary
(they went with the job, not the man),
but under the British, the estate holders
were quick to turn their interests into
heritable property.  If this is true, it
sounds somewhat like the CTEA.

[3] and in the middle, one can argue that
the insurance of the former allows us to
stomach the risk of the latter, and the
return of the latter allows us to pay the
premiums of the former.