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Andrew, I will have to leave many points unanswered.
> In Kalecki this should have an initial positive impact upon the
>rate of profit since the total profits increase.
But isnt't there a possibility of a widow's cruse with only a lower real
wage for workers due to rise of prices consequent upon autonomous increase
in capitalist consumption? Why do you rule this out?
Note, however, that there is no question of breakdown because
>of a shortage of profits, which was my main point about the Bauer/Grossmann
>model.
It's not necessary for there to be a shortage of profit from the previous
cycle; credit could bridge the gap. There is breakdown because profits are
becoming too small. True, profits are insufficient to cover purchases
anyway. But what we need to do is compare the Keynesian
subjectivist/technicist explanation for declining marginal efficiency of
capital with Marx's grounded in the transformations in the social relations
of production.
Maybe
>you think it should only be referred to as the Bauer model - is this your
>view?
Well it is Bauer's model, and Grossmann offers several reasons why it
necessarily misrepresents capitalist dynamics (though this seems to have
escaped even Howard and King, e.g., its focus on value to exclusion of use
value, its assumption of constant values, its treatment of capitalist
consumption only as a passive variable, its neglect of credit and loan
capital on the cycle, its abstraction from cycles altogether, etc).
Yours, Rakesh
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