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In 3203, Andrew T wrote:
Instead of the bulk of capitalists' personal consumption being treated
>as autonomous - Kalecki shows this empirically - it is treated as a passive
>residual which shrinks to nothing.
Again, this is mistaking Bauer's model with Grossmann's use of it. HG
explicitly emphasises that k (capitalist consumption) should not be treated
as a passive variable: "We should not suppose however that the capitalist
simply waits passively until the k portion has been swallowed up. Long
before any such time (at latest from in the scheme when the k portions
begins to decline absolutely)he will do his utmost to halt the tendency. In
order to this he must either cut the wages of the working class or cease to
observe the conditions of accumulation....The tempo of accumulation would
have to have be slowed down, and that too permanently and to an increasing
degree. In that accumulation would fail to keep step with the growth of the
population...The slowing down of accumulation and the formation of the
industrial reserve army of labor must necessarily follow even if wages are
assumed to be constant throughout the period." p. 82
The Keynesians/Kaleckians whom Andrew is here recommending are quite fond
of blaming passive bondholders ENTIRELY for the restrictive monetary policy
by which accumulation is slowed down (see E Ray Cantebery Wall Street
Capitalism. World Scientific 2000). But this forgets that in order to
preserve their consumption standards industrial capitalists themselves may
attempt to rein accumulation in. Grossmann hardly treats capitalist
consumption as a residual or passive variable.
Yours, Rakesh
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