I've got a few thoughts, I'm dabbled in economics but not this theorem specifically. I may have missed some subtleties but here is what I've got now.
Who cares? The TRPF (tendency of the rate of profit to fall) has been observed empirically, why would a theoretical refutation matter if it's at odds with reality.
It looks like Okishio has done some semantic juggling here. He's basically redefined profit into something pretty close to GDP (the total of all profit of all capitalists). So he's basically claiming that productive innovation increases GDP (or the total of all profit of all capitalists, if you want to describe it exactly as he did). That seems true enough to me, innovation that increases productivity increases production and in a capitalist economy the benefits of that increase productivity go to the capitalists.
Okishio has fixed wages, a fixed number of capitalists, and assumed the innovation is free. The first two are ridiculous but that third one is absurd. The whole point of TRPF is that repeated investment brings reduced profits over time, if you set the cost of investment/innovation to zero then it becomes meaningless. Marx not accounting for completely free innovations that come from nowhere can hardly be called a weakness in his theory.
I've got a few thoughts, I'm dabbled in economics but not this theorem specifically. I may have missed some subtleties but here is what I've got now.
Who cares? The TRPF (tendency of the rate of profit to fall) has been observed empirically, why would a theoretical refutation matter if it's at odds with reality.
It looks like Okishio has done some semantic juggling here. He's basically redefined profit into something pretty close to GDP (the total of all profit of all capitalists). So he's basically claiming that productive innovation increases GDP (or the total of all profit of all capitalists, if you want to describe it exactly as he did). That seems true enough to me, innovation that increases productivity increases production and in a capitalist economy the benefits of that increase productivity go to the capitalists.
Okishio has fixed wages, a fixed number of capitalists, and assumed the innovation is free. The first two are ridiculous but that third one is absurd. The whole point of TRPF is that repeated investment brings reduced profits over time, if you set the cost of investment/innovation to zero then it becomes meaningless. Marx not accounting for completely free innovations that come from nowhere can hardly be called a weakness in his theory.
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