Full text: Comment on Professor Ciccone's Paper.

2 
we have to assume some sort of "normal" capacity utilisation. 
Since Professor Ciccone's utilisation,however, has to serve 
the demon accumulation it cannot at the same time serve 
as a basis for the determination of normal prices. 
He tries to resolve this difficulty by assuming that the 
normal prices are determined independently of actual 
utilisation on the basis of a different value of utilisation 
namely the utilisation which investors in new equipment 
expect to realise with their new equipment in the future 
( p.3 ff. ) Now this implies that the profit rate 
calculated on the basis of this "normal" expected rate 
of utilisation will be different from the profit rate 
which is necessary to make the given pace of accumulation 
possible. Professor Ciccone has a way out again: He 
has two different profit rates, the normal profit rate, 
and another one which he calls " profit realised per unit 
of capital" (p.19). The distinction is quite legitimate 
analytically. But do the managers live with such a 
dichotomy? It would rather seem that they cannot have 
much interest in calculating on the basis of a normal profit 
rate normal prices which will never become reality 
however long the run? 
To my mind what all this amounts to is only the recognition 
that there is not ever a long run equilibrium in an economy 
with changing accumulation rates (and there is no gravity either). 
It is possible to arrive at this conclusion also in other ways 
but in any case I could hardly dissent. 
On the other hand I see no convincing proof that accumulation 
could not affect "normal profit rates". It might do so if 
long run average of 
a high ^utilisation would relax the aggressive competitive 
spirits ( Joan Robinson did not use this argument, though ).
	        

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