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in his accumulation paper, Paul Z wrote:
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Years later, however, Howard and King (1989, p.121) state that "Luxemburg
dismisses Bauer's treatment of disproportions
between the two departments as involving 'sheer swindles', and deny that
the capitalists in department II could conceivably
purchase the 4666 units of means of production which are needed to
maintain equilibrium growth". Then they flatly say, "this is
simply wrong" (and go on to tell us how she could have been better
spending her time!). They don't explain why she is "simply
wrong".
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Why was Bauer (see p. 117) simply wrong? As Howard and King put it,
Luxemburg could have then asked the question of whether the possibility of
equilibriated growth in Bauer's or any two department model could ever be
turned into reality. As Mattick notes on p.107-8 of Economic Crisis and
Crisis Theory--of which you are quite dismissve without much
explanation--Marx actually uses these schemes to show that overproduction,
esp in Dept I, is simply unavoidable even in a socialist society, though
it would then reflect social control over production instead of serving as
an element of anarchy as it does in bourgeois society.
Just to put the point in my own terms: after fixed capital is replaced,
there couldn't be sales from Dept I to Dept II for several years. Wouldn't
this mean the idling of the machines with which the newly installed
machines were produced-- leading to the former's moral depreciation, if not
physical destruction?
Shouldn't one expect then that even after fixed capital has been replaced,
there will still be pressure for overproduction of new machines,which
should give rise to hyper competition in the capital goods sector that
leads to tremendous innovation and thereby inducements to quicken the
turnover of capital? From my reading, exactly because of persistent
disequilibrium and overproduction capitalism has been such a dynamic and
technologically innovative system.
At any rate, I think Mattick is correct to criticize Grossmann for having
conceded that if the interdepartmental transfer of value and therewith the
formation of production prices is considered, Bauer's two dept schemes can
show the possibility of equilibriated growth, even if that is then treated
simply as nothing more than ideal average of the accumulation process.
The schemes --even Bauer's into which several more realisitic features are
built--simply could never be turned into reality nor did Marx ever intend
them as a model of reality. I thought Mattick was right about this, and I
couldn't figure out why you disagreed.
Yours, Rakesh
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