From: A.B.Trigg (A.B.Trigg@OPEN.AC.UK)
Date: Sun Nov 07 2004 - 19:52:01 EST
Rakesh. This passage from Mattick is familiar to me, but not easy to digest. If Say's Law is provisionally accepted, then with supply creating its own demand how can there be realization problems? Andrew T. > A reading of Marx in Capital, volume 3, also shows that it is >difficult to realise such a monstrous amount of surplus value. Difficult yes. Baran and Sweezy's difficulty of the sales effort, the difficulty of creating ever newer Veblenian positional goods, the Kalecki/Trigg difficulties in the financial sector subsidizing ever more orgiastic luxury spending. But what Grossmann's analysis predicated upon a provisional acceptance of Say's Law uncovers is an even greater obstacle to the realization of that monstrous amount of surplus value. As Mattick pithily put it:"because not enough surplus value has been produced, capital cannot expand at a rate which would allow for the full realization of what has been produced. the relative scarcity of surplus labour in the production process appears as an absolute abundance of commodities in circulation." > > I have two points to make: Taking them in reverse order. > > 2. I cite Samuelson and Wolfson (1986) in the article as >showing that the only dependent variable in the Bauer/Grossmann >model is the capitalist propensity to save. > Hence with the OCC rising and rate of surplus value constant, the >propensity to save must reach 100%: capitalist consumption collapses. >In my alternative macro-monetary model capitalist consumption >becomes an exogenous variable, part of the money cast into >circulation by capitalists. The dependent variable is the rate of >surplus value. OK so in your interpretation not only do capitalists earn what they spend but they determine the rate of s/v through their spending. But there are constraints on the growth rate of the s/v rate. And these you do not seem to theorize in your model. > Now under this alternative model there cannot be a breakdown due to >scarcity of surplus value. With even a small rate of increase of >capitalist consumption, a rising OCC cannot eat up all the surplus >value - even if we start the Bauer simulation at a higher OCC. There >is no year of precise economic breakdown due to drying up of surplus >value. No precise year could ever be deduced from Bauer's model anyway. Each period could represent a month or a decade. The initial conditions are arbitrarily postulated and a change in them would obviously change the year of economic breakdown. This was my initial point, drawing from Kuhn's research into Grossmann's correspondence. Grossmann was very aware of the dangers of trying to deduce too much from Bauer's scheme. Neither Sweezy nor Howard and King are fair to Grossmann on this point. In G's analysis B's scheme is as much positively used as criticized. The phrase G-B model is seriously misleading. > I agree that a rising s/v is unreasonable. Well then! > You say that it would be so because of workers resistance. To the extent that workers cannot live on air,the rise in s/v will necessarily find limits that the rise in the OCC will not. Cogoy showed this. So did Yaffe before him as you recognize in your paper. You can only be certain that there will be no break down from a shortage of surplus value at even very high levels of the OCC if you allow, consequent upon autonomous increases in luxury spending, the S/V to rise in physically and socially impossible terms. Without determinate parameters and limits on the growth of s/v, one counters Grossmann only by flight from living reality. In short, an autonomous increase in luxury spending cannot be allowed to raise the s/v without any limits at all. > > 1. Grossmann did think that the rate of surplus value should >rise, as does Marx, in the falling rate of profit thesis. Yes indeed. Howard and King's argument that Grossmann neglects the effects of a rising s/v and relative surplus value ignores that Grossmann saves just that effect for intensive study in his conclusion where the political implications of his variant of breakdown theory are drawn. The conclusion is not in the English version; it was translated by Kenneth Lapides in History of Political Economy as I am sure you know. The unabridged Spanish translation is available on the American amazon.com website. Yours, Rakesh > However, neither of us are talking here about Grossmann-type breakdown. > > Andrew T >
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