From: Rakesh Bhandari (rakeshb@STANFORD.EDU)
Date: Fri May 28 2004 - 04:43:36 EDT
re Andrew T's piece on Kalecki and Grossmann in the latest Science and Society. Perhaps I have read it too quickly, but I shall ask these questions and then re-read it. Dear Andrew T, In your Kaleckian attempt to demonstrate that the stability of the capitalist system ultimately depends on the willingess of the financial sector to underwrite ever larger orgies of capitalist consumption--rather than working class resistance to the rising rate of exploitation and unemployment threat of late capitalism (see Pietro Basso for findings that read like Grossmann's conclusion which alas not in the translation that you cite, though it has been translated by Kenneth Lapides; don't understand why you and Howard and King are looking for capital's epochal contradictions in finance and realization to the exclusion of the production of surplus value when the global working class has been under assault to produce more and then more in response to poor real profitability on marginal investments)--you assumed that the rate of surplus value could rise indefinitely in response to growing capitalist consumption. The difficulty then becomes whether the financial sector will be able and willing to underwrite that consumption. I was wondering however whether you could share your numerical calculations for s/v in each successive period after 35 (you graph them) and your thoughts on whether such fantastic rates of exploitation would be as tenable--let's say--existentially as it is mathematically. It seems that such a rising s/v would be easier to graph than to impose on actual working people. It doesn't seem helpful to replace the provisional assumption of a fixed s/v for one which has a fantastically impossible rate of growth. Do note also that once the assumption of constant values is dropped--and Grossmann was the first to say that Bauer's model was totally unrealistic for not having done so--capitalist consumption may be rising in real terms even as it falls in in absolute terms after period 21 in Grossmann's extended Bauer model. That is you could get your increase in capitalist consumption without having to allow the absolute value magnitude of capitalist consumption increase. Without that increasing, s would also not increase as your model stipulates. Of course the lower growth rate of s may not decrease the rate of profit as the unit prices of what enter as c and v would also be declining. But it obviously gets complicated when said assumption is dropped. I have several detailed comments on your paper, and you will probably be interested in Rick Kuhn's latest paper on Grossmann's unpublished replies to his critics--he speaks directly to those who criticized the way he handled capitalist consumption. It appears in the latest Research in Political Economy. Rakesh
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