From: GERALD LEVY (gerald_a_levy@msn.com)
Date: Sun Mar 16 2008 - 08:55:43 EDT
> Some even believe a recession> might be the best answer for the economy in the long term. That's still a minority view though. Hi Alejandro VB: Although Marx wrote in a different historical period - a period before the state employed monetary and fiscal policy - he also believed that an economic crisis serves a necessary restorative role in the cycle of accumulation to the extent that its overcoming ensures that the conditions for profitability are restored. This restoration of favorable conditions for profitability are accomplished both by driving down wages (and hence V) and through the forcible destruction of constant capital values. Whether this perspective is validated by the historical evidence on what happens during a crisis is another matter. The evidence, I think, will show that wages tend to be depressed below the VLP during a crisis, but how in practice have decreased wages and an increased size of the industrial reserve army affected aggregate demand during crises? The historical experience of the Great Depression, I think, suggests that there is no guarantee that - even with decreasing wages and a destruction of capital values - that the economy will necessarily recover. There is also a question concerning investment in C: while there is devaluation and destruction of C during a crisis, I think it is only after the economy recovers and enters into an expansionary phase that you see the large increase in investment in new plant and equipment. Yet, many Marxians seem to think this new investment in C occurs _during_ the crisis. Happily, these are are matters which can be empirically investigated. In solidarity, Jerry _______________________________________________ ope mailing list ope@lists.csuchico.edu https://lists.csuchico.edu/mailman/listinfo/ope
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