From: Rakesh Bhandari (bhandari@BERKELEY.EDU)
Date: Sun Oct 31 2004 - 09:13:08 EST
> >ANDREW B. TRIGG (Open University, Milton Keynes, UK) >Where does the money come from? Rosa Luxemburg and the Marxian >Reproduction Schema > In his paper on Grossmann and Kalecki Andrew Trigg wants to show no foundering of capital accumulation on shortage of surplus value if s/v rises. Andrew T has the rise in s/v determined by ex ante capitalist consumption decisions which are in turn determined by a strict rule. The rise in s/v could be determined in other ways. If capitalists follow this strict rule and borrow and spend ever more on their own consumption, then (according to Andrew T) capitalist production is possible for at least 100 periods. No forseeable breakdown from shortage of surplus value. Capital is stable as long as the banks are willing to advance money to capitalists to indulge in ever greater orgies of luxury spending. Presumably the message from Kaleckian theory to the working class is simply this: "help the ruling class overcome any 'Protestant' inhibitions against luxury, consumption and decadence, for the stability of your employment depends on their use of credit lines to finance their overconsumption." We can safely assume that capitalists will consume enough to realize all of surplus value. To be sure, this puts a burden on them. Imelda Marcos had to shop a lot and find room in her closet for new pairs of shoes. Who cares? Moreover since the OCC could reach a plateau much faster if Bauer's scheme did not begin with such a low one in the first place (as Rick Kuhn quoting Grossmann has already shown), there is no reason why the rise in the OCC will likely be neutralized by a rise in the S/V. So in no way does Trigg show that it's impossible for the accumulation of capital to founder on a shortage of surplus value. No doubt there could be a realization crisis if the capitalists do not advance order what will turn out be the revenue component of surplus value. Why Andrew T thinks that has proven to be a greater source of problems for the capitalist system as a whole than periodic drops in profitability from rises in the OCC I have no idea; he certainly does not show that various phenomena can be traced to the problem that he isolates. So his theory does not have the consilience (to mis use Whewell's word) that Grossman's theory had. As for Rosa L, not one of her theoretical defenders (and this includes Paul Z) has responded to the best of my knowledge to the following criticisms made of her by Grossmann, repeated by Mattick Sr. That is, whatever disproportionalities or realization difficulties she isolates in Marx's reproduction schema could be corrected through the formation of prices of production and the redistribution of value implicit in that formation. Luxemburg forgets that Marx's schema are given in values, not prices of production. "in a reproduction schema built on values, different rates of profit must arise in each dept of the schema. There is reality however a tendency for the different rates of profit to be equalized to average rates, a circumstance which is already embraced in the concept of production prices. So that if one wants to take the schema as a basis for criticizing or granting the possibility of realising surplus value, it would first have to be transformed into a price schema." Moreover, "'Since competition gives rise to the transformation of values into production prices and thereby the redistribution of the surplus value among the brances of industry (in the schema), whereby there necessarily occurs also a change in the previous proportionality relation of the spheres of the schema, it is quite possible AND EVEN PROBABLE that "a consumption balance" in the value schema subsequently vanishes in the production price schema and inversely , an original equilibrium is subsequently transformed into the production price schema into a disproportionality.'" my emphasis And Mattick, 1935: "The theoretical confusion of Rosa Luxemburg is best illustrated in the fact that on the one hand she sees in the average rate of profit the governing factor which 'actually treats each individual capital only as part of the total social capital, accords it profit as part of the surplus value to which it is entitled in accordance with its magnitude, without regard to the quantity which it has actually won', and that she nevertheless examines the question as to whether a complete exchange is possible; and that on the basis of a schema which knows no average rate of profit. If one takes into account this average rate of profit, Rosa Luxemburg's disproportionality argument loses all value, since one department sells above and the other under value and on the basis of the production price the undisposable part of the surplus value may vanish."(this 1935 analysis reprinted in Anti Bolshevik Communism, ME Sharpe, 1978, p. 38)
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