From: Rakesh Bhandari (bhandari@BERKELEY.EDU)
Date: Thu Nov 18 2004 - 08:07:29 EST
At 1:15 PM +0100 11/18/04, Riccardo Bellofiore wrote:
>At 23:05 -0800 17-11-2004, Rakesh Bhandari wrote:
>
>>But her interpretation is in fact confused, and on the face of it
>>contradictory. One can see the basis of Henryk G's criticism. On the
>>one hand, she underlines that Marx rejected soap box
>>underconsumptionism; moreover, she repudiates it on political grounds
>>as she cannot allow for the possibility of stabilization through
>>income redistribution. On the other hand, she explains crisis as the
>>result of production outstripping consumption! Moreover, as she
>>focuses with brilliant clarity on market related difficulties,
>>Luxemburg leaves undiscussed Marx's theory of the law of the tendency
>>of the rate of profit to fall despite the great importance that Marx
>>gave to it. In this sense it cannot be recommended as a summary of
>>the second and third volumes of Das Kapital, though this is what this
>>section claims to be. One wonders what she has to say about the third
>>volume of Das Kapital in her Introduction book. Not to be missed is
>>Mehring's own summary of the 1859 Critique. Very beautifully and
>>lucidly written, I would say.
>
>She says nothing about the third volume in the remaining chapters of Intro.
>
>My impression about RL is that she is not to be judged from the
>analytical solutions she provided. Rather, she saw her superiority to
>9% of contemporary and future Marxists in:
>
>- her attitude: Marx as an author to be criticized and developed with
>an open spirit
This is simply an abuse of RL's own spirit; she fought her whole life
against those revisionists who criticized and developed Marx in what
you are calling an open spirit. She would have wanted above all else
to be saved from friends whom you claim are developing Marx in an
open spirit.
>
>- her questions: she saw problems on monetary aspects and effective
>demand to which others were blinded
The problem today is the reduction of the Marxian critique to
problems of monetary aspects and effective demand, that is making
Marx fit within
a Keynesian or Kaleckian framework.
>
>- her good intuition: not to bet on the law of the tendency of the
>rate of profit to fall,
But this is in fact presents the most formidable source of problems
in effective demand.
While those following Grossmann are accused of monocausality (or
being possessed by an idee fixe), the truth of the matter is that
Sweezy-Kalecki-Robinson are self conscious excisionists--that is,
they explicitly want to excise Marx's own theory of FROP from crisis
theory.
Grossmann on the other hand never denied that crises could originate
from disproportionality as a result of uneven technical change (HG
and Bernice Shoul are sympathetic to Lenin here), from the operation
of the credit mechanism (HG has a specific section on this in his
magnum opus), from failures in the autonomous increase of investment
not preceded by a prior fall in profitability (HG notes how use value
can put limits on further accumulation; just because four knives can
be produced in the same labor time as two knives does not mean that
people can make use of four knives).
His 1941 book which you know very well is quite clear about the
accumulation process being shot through with all kinds of
difficulties other than falling profitability.
> and not to see in the tranformation problem
>something fundamental for Marxism
Which is to say that she never found any need to go beyond
Hilferding's reply to Bohm Bawerk, and did not understand the nature
of von Bortkiewicz's criticism?
>
>If we look at the answers, we can go with Bukharin or Sweezy or
>anybody who quickly jettisoned her. If we look at the attitude and
>questions we may see why she was so interesting for Kalecki and
>Robinson.
Oh I don't think she would have been very happy at all about the way
in which she was used by the post Keynesian left!
I can't imagine she would have been happy about her appropriation by
the left technocrat Kalecki and statist socialist Robinson.
>
>A joint reading of the Intro and the AoC help to reinstate what in
>Kalecki and Robinson may be missing. The essential role of the
>Marxian theory of value seen as a dynamic/diachronic approach to
>shape distribution, disproportionality crises, effective demand
>failures.
Both Kalecki and Robinson correctly understood that their crisis
theory was not only independent of Marx's theory of value but in
contradiction to it. So I am not sure why you think these great
economists were wrong about the irrelevance of the Marxian theory of
value to their projects.
>
>--
>Riccardo Bellofiore
>Dipartimento di Scienze Economiche
>"Hyman P. Minsky"
Did you see my message on Crotty/Minsky/Kalecki from 7 November?
Here it is again:
I think Andrew T would agree with what Crotty says here (I quoted
this passage before); I of course disagree with the very first claim.
James Crotty has noted:
Minsky is quite emphatic...(an) investment decline can never be
initiated by a prior decline in the expected profitability of
investment; rather, it takes an initial drop in investment to induce
a subsequent decline in profits. Investment and profits are not
mutually codetermining: investment spending calls the tune and
profits dance accordingly. As Minsky puts it: 'In the simplest
Kalecki case, where aggregate profit equals aggregate investment, the
shortfall of realized profits below anticipated profits requires a
logically prior shortfall of investment. This leaves the question
of...crises..and...depressions unexplained, for it is the decline of
investment that has to be explained.' Minsky's view on this point is
also summarized in the following quotation: 'The profitability of
existing capital--and profit expectations-can only change if
investment and expected investment [first]decline. Thus we have took
elsewhere--to arguments other than those derived from assumed
properties of production functions and hand waves with regard to
over-investment--to explain why the marginal efficiency of investment
falls. The natural place to look within the Schumpeter-Keynes-Kalecki
vision is in the impact of financing relations.' Thus, Minsky, can
find no impediments to perpetual balanced growth in the real sector
of the economy. The roots of instability are to be found in the
financial markets.
Journal of Post Keynesian Economics, Summer 1990, p.530
This paragraph reads to me as an admission of failure ("...can find
no impediments..in the real sector...") But in support of Crotty's
first claim, Andrew has attempted an immanent critique of Grossmann
from a Kaleckian perspective.
I would say that another problem with Keynesian or Kaleckian
framework is that it very easily lends itself to right wing
appropriation: there is no inherent reason why it could not be
deployed to justify a Bush tax regressive, militarist stimulus over a
Swedish type corporatism. In fact it leaves one defenseless if in
fact the former is more likely in a given conjuncture to be
stimulative in a formalisitc logico-positivist sense.
The problem was recognized by Paul Crosser, State Capitalism in the
Economy of the United States (New York: Bookman, 1960):
"The problem whether the flow of money for the stimulation of the
economy is to be channeled into the production of nonwar goods or war
goods does not enter the analytical pricture which Keynes offers: nor
does Keynes tackle the problem whether the money is to be spent on
labor-intensive or capital-intensive industries. Keynes's theoretical
position can therefore be invoked in regard to any aspect of
spending which is undertaken wth the direct or implied purpose of
stimulating production and employment. Those
who prefer government spending for public works can cite Keynes in
their favor, as can those who point to the greater economic
effectiveness of government spending for war goods production.
"Keynes's analysis is a purely formalistic logico-postivistic one
which is stripped of social economic content. His analytical
framework is therefore
of little help in a tract such as this which strives to assess the
impact of government spending and the resultant changes in the
structure of the economy and society of a given country." (p.36)
In his brilliant early reaction to Keynesian economics Erich Roll
(1938) emphasized that social democratic or corporatist, left wing or
fascist policy could be justified from within the Keynesian
framework: To Keynes and his followers "the state is a mechanism
which can be used to influence the economic system according to one's
ideals. One can readily grant that the ideals of Mr. Keynes and his
followers are noble. But can their analysis offer an effective
opposition to those whose ideals are less exalted and whose policies
are abhorrent? It is clear that they cannot. Their approach uses
abstract categories which demagogy can use and fill with its own real
content. Sismondi and Proudhon used an analysis somewhat similar to
that of Mr. Keynes for Utopian, quasi-socialist purposes. Malthus
used it to defend the remnants of feudalism against capitalist
revolution. A progressive and reactionary purpose can find
support--or at least indifference--in an economic theory that is
confined to the sphere of circulation and that operates with
psychological concepts." p. 88
Grossmann's theory on the other hand clarified that the inevitable
descent into international conflict and regression in the conditions
of work could only be prevented by a change in the relations of
production, in the emancipation from exploitation.
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