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Full - Employment Profit Rate , (3.1)
which, recalling that both of
FE
Y K and /
FE
K N increase with technological pro-
gress, allows the full-employment profit rate
FE
r to increase with technological
progress, on the sufficient condition that the ratio of the full-employment real wage
FE
w to the full-employment capital-labour ratio /
FE
K N , that is, the inverse of the
full-employment organic composition of capital ( ) /
FE FE
K N w , will not increase
far more than in proportion to the characteristic technological productivity
FE
Y K.
For constant
FE
Y K and /
FE
K N , which represents technological stagnation, the
only way for an increase of the full-employment profit rate
FE
r is a decrease of the
full-employment real wage
FE
w . By doing so, an economy of lower technological
level (lower
FE
Y K and /
FE
K N ) tries to become more attractive to investments
and able to sell the product
FE
Y at a price lower than its real value without loss of
the initial profits, thereby becoming competitive in comparison with economies of
higher technological level. However, such a counter-labour policy meets the rea-
sonable reactions of the labour class, and may set in danger the cohesion of the
society of the production factors.
Equation (3.1), in view of equations (2.2) and (2.3), can be put in the equivalent
formulation
1
1 1
FE FE
FE
FE
FE FE FE
e e
r
K e
N w Y K
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