In reply to OPE-L 4968. Yes, Paul (Zarembka), my question to you is similar to my question to Fred "in that you are looking for a criterion outside of two positions to settle an issue. If we get past the above, who decides (a la third thesis on Feuerbach)?" I hadn't thought of them as the same or similar questions until you pointed it out but, of course, you were right. As for whether Marx's schemes of expanded reproduction provide (in my view) a proof or the basis of a proof, I think the answer is "both." I wasn't referring to the numerical examples per se (though I could -- see below), but to Marx's demonstration that Ic doesn't pass through any (extra-departmental) market and is thus not limited by the extent of demand in those markets. The output of Dept. II is limited by the demand for consumer goods. The portion of Dept. I's output that goes to Dept. II is limited by the growth of Dept. II, and thus, it is ultimately limited as well by the demand for consumer goods. None of this is true of the portion of Dept. I's output that re-enters that Dept. It is pure production for production's sake -- mining equipment to produce coal, coal to produce steel, steel to produce mining equipment, etc. It can grow independently of personal consumption since its demanders are capitals, not persons. But there is also a numerical example of this phenomenon in Marx's work -- his First Example of expanded reproduction (_Capital_ II, pp. 586 ff, Vintage). You write that "In Marx's illustration, growth of Dept. I does NOT outstrip the growth of Dept. II (see last chapter of Vol. 2, end of the section: Marx's "First" illustration -- the more complicated illustration in which the organic compositions differ between the departments -- grows 10% annually for Dept. I, ditto for Dept. II, and ditto for the total)." Your interpretation of the example is the traditional one, to be sure, but it is not exactly right. Dept. I grows by 10% in *every* year. Dept. II grows by 10% in every year *except* the first. In the first year, it grows by just 6.66...%. Now, you may say "big deal," that this is just a disequilibrium blip or something. But once the dynamics involved in this initially-lower-growth-of-Dept.-II-scenario are understood, it is not hard to extend the disequilibrium blip ad infinitum, so that Dept. II *continually* grows slower than Dept. I, and has a growth rate that converges with that of Dept. I only in the limit. I know it isn't hard because I have done it. I'm referring to the proof (in my view) I presented last year on this list. It is really just a matter of "stretching out" the what seems to be an "initial adjustment" in Marx's example. So it is in this sense that Marx's schemes provide not only a proof but also the basis for a different proof (e.g., mine). Now, as long as technology and real wages are constant, Dept. II must EVENTUALLY (at t = infinity) grow as fast as Dept. I. But not until then. And not because of the growth of Dept. I being limited by consumer demand. Rather, Dept. II must grow fast enough to feed Dept. I's workers. If Dept. I's growth rate is *permanently* higher than Dept. II's, then Dept. I's workers starve. Once we consider labor-saving technical change, however, it is trivial to show that Dept. I's growth rate can permanently exceed Dept. II's. (Imagine a fully automated economy.) One more thing: Robinson's attempt to discredit the implications of the schema. I don't buy it at all. The short version of why I don't is that she has to invoke very irrational expectations on the part of firms. Imagine they DO expect that demand for the output produced by their new prospective investments will be forthcoming. Then they all invest and, by doing so, they themselves are bringing forth the additional demand. The steel producers buy coal because they expect additional demand for steel from the mining equipment producers. The mining equipment producers buy steel because they expect additional demand for mining equipment from the coal producers. And the coal producers buy mining equipment because they expect additional demand for coal from the steel producers. The only way for the Robinson story to work is if the firms think wrongly that the demand will not be forthcoming. Then they don't invest and demand is insufficient as a result of a self-fulfilling prophecy. But why should they think like that? They don't read Sweezy. Ciao, Drewk
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