From: Rakesh Bhandari (bhandari@BERKELEY.EDU)
Date: Mon Apr 16 2007 - 11:40:18 EDT
Written yesterday. The TSSI entry seems to have been rewritten again. It seems that there is a need for an entry on non equilibrium currents within Marxism. For before we ever get to TSSI as a school of non equilibrium Marxism we have to first ask this question: Can one develop through the analysis of the logical construct of simple reproduction an explanation of why capitalist dynamics will likely be characterized by constant non equilibrium, with equilibrium which is the rule presupposed by political economy only at best a momentary transitory point? Allin clarified Marx's own often ignored insight that the means of production would likely not be physically used up such that that their respective replacement dates are staggered so that monetary demand each year would be exactly equal to the fixed quantity of means of production available each year in simple reproduction. Rather there is likely to be an overproduction of capital goods, as Marx emphasized, even in simple reproduction which can only create anarchy in a capitalist economy. The question then becomes what the consequences of that anarchic overproduction are likely to be. Paying attention to the temporal and use value aspects of the reproduction process, Grossman inferred from that anarchic overproduction that there would likely be strong competition among capital goods producers, resulting in the perpetual innovation of superior means of production which firms would be forced to assimilate on pains of survival. The economy would as a consequence undergo structural and spatial change as it grew and moved from disequilibrium to disequilibrium. Capitalist development is not likely to be simply a case of market-clearing expanded reproduction on the basis of a fixed organic composition of capital and fixed unit values. Marx's schema of expanded reproduction should not give this impression that capitalism could ever resemble a dynamically stable, equilibrium system. They were only a stage in the approximation in reality, focused on the narrow question of the conditions of circulation of capital in cases of simple and expanded reproduction. In using Bauer's schema in his magnum opus Grossman was perhaps somewhat to blame for this misinterpretation of the schema of expanded reproduction as a representation of the actual course of accumulation. As Rick Kuhn writes in his important biography of HG, this theoretical development from the critical analysis of simple reproduction to dynamics and nonequilibrium (including the tendency once fixed capital costs are high to compete for market share by increasing output and using new technology even in the face of declining demand) is an important aspect of Marx's critique of political economy as an ideology of equilibrium. TSSI is not the only school defending a non equilibrium version of Marxism. Which is not to say that it has not made unique and important contributions. Yet David Harvey's Limits to Capital also seems to me non equilibrium in spirit as does Paul Mattick's last book. And Michael Perelman seems to have been a non equilibrium thinker for quite some time. Grossman seems to have been the first Marxist to have rejected the equilibrium idea. One finds criticism of comparative static methodology in the writings of John Weeks and Geert Reuten. Paolo Giusanni was a critic of equilibrium thinking even before TSSI was constituted as a school. Moreover, outside of Marxism there are schools of non equilibrium economics. One thinks of course of Joan Robisnon, Paul Omerod has popularized some of the new thinking. Mark Blaug has moved in this direction; the radical Schumpeterian Nathan Rosenberg was there long ago. In other words, in its basic thrust TSSI is not unique though some of its detractors and some of its supporters seem to think that it is. Rakesh
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