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Dear Rakesh, doesn't the continuous presence of a group of capitalists which is
saving a depreciation fund while another group is replacing fixed capital
guarantees a more or less continuous demand for fixed capital? Does this point
bear any relationship to your point that after capitalists have replaced ficed
capital "there will be no demand for fixed capital for years"?
If your proposition eventually incorrect then your derivation of product
innovation in the industry of machines (fixed capital in general) will be
incorrect also.
Paulo
Rakesh Bhandari wrote:
> in his accumulation paper, Paul Z wrote:
> _____________
> 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".
>
> ______________________
>
> 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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