re: Steve's 6785 >It is tremendously confused Rakesh, and the critiques Sraffa made of >it in the 1920s are still worth a read today. > >The basis of it is diminishing marginal productivity, which is a >simply nonsensical argument to apply to capital machinery, as Sraffa >argued and as I elaborate in my Debunking Economics. > >Keynes had pretty much abandoned the MEI arguments by 1937, but of >course textbook writers kept it alive because it was such familiar >marginalist stuff. > >Steve Well between Krugman's lectures, I jumped ahead to your chapter on Keynes, "The sum of the parts". And I see your attempt to redefine the term on p. 202. But first I think there is a contradiction. Well before that let me say that you write extremely well and precisely. Your prose is a model of clarity and concision. You quote Marx's critique of that pretty conception that the basis of capitalist production is the direct satisfaction of the consumption of the producers. But then you say that "a decline in spending on consumption by consumers could lead to investors to also reduce their demand for investment goods, so that the economy could remain in a situation of inadequate excess demand." p 198 Yet if capitalist production is not driven forward by the attempt at the direct satisfaction of the consumption of the producers, then why would a decline in consumption by consumers, however effected, tend to lead investors to reduce their demand for investment goods? Rakesh
This archive was generated by hypermail 2b30 : Tue Apr 02 2002 - 00:00:06 EST