[OPE-L:2705] Re: Accumulation theory [Reply to Rakesh in 2685]

From: Paul Zarembka (zarembka@acsu.buffalo.edu)
Date: Tue Apr 04 2000 - 09:17:55 EDT

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[Note: The subject line is changed to reflect the change Rakesh made for

bhandari@Princeton.EDU (Rakesh Bhandari) said, on 04/03/00 at 03:10 AM:
>in his accumulation paper, Paul Z wrote:
>Years later, however, Howard and King (1989, p.121) state that "Luxemburg
>dismisses Bauer's treatment of disproportions
>between the two departments as involving 'sheer swindles', and deny that
>the capitalists in department II could conceivably
>purchase the 4666 units of means of production which are needed to
>maintain equilibrium growth". Then they flatly say, "this is simply
>wrong" (and go on to tell us how she could have been better spending her
>time!). They don't explain why she is "simply

> Why was Bauer (see p. 117) simply wrong? As Howard and King put it,
>Luxemburg could have then asked the question of whether the possibility
>of equilibriated growth in Bauer's or any two department model could ever
>be turned into reality. As Mattick notes on p.107-8 of Economic Crisis
>and Crisis Theory--of which you are quite dismissve without much
>explanation--Marx actually uses these schemes to show that
>overproduction, esp in Dept I, is simply unavoidable even in a socialist
>society, though it would then reflect social control over production
>instead of serving as an element of anarchy as it does in bourgeois

Bauer was wrong because Bauer (and Grossman and Pannekoek) forget the
economic meaning of having two departments in a scheme of extended
reproduction. They reduce the issue to a mathematical formula, on the
surface unobjectionable as the mathematics (arithmetic) is
unobjectionable. What is forgotten is the economic context in which one
cannot simple move material products between different departments as
these departments produce physically distinct use-values (sort of reminds
one of the 'reswitching' problem -- what is that thing called "K" in a
production function?). What Howard and King do on p. 117 is reproduce
Bauer. OK. But on p. 121 they quote Luxemburg's criticism of Bauer, but
WITHOUT replying to her with anything of substance. "This is quite simply
wrong", left by itself, does not cut any ice. They simply go to
recommending to her (posthumously) how she could have better spent her
time. In other words, Howard and King do not MEET Luxemburg's criticism
at all (neither head-on nor at an angle).

Actually, I think Rosdolsky may have an even clearer formulation of the
criticism of Bauer than Luxemburg, altho both are making the same point.
Thus, Rosdolsky notes that Marx "wanted to use these schemes to show how
the antinomy of use-value and exchange-value can be, and is, resolved at
the social level. However, this can only be shown if the industries
making production-goods and consumption-goods are considered as completely
autonomous departments..." (p. 499) Moving a number 4666 between
departments, without accounting for issues of use-values, is playing a
game, a "swindle" (Luxemburg).

You also note that I am dismissive of Mattick: "Mattick (1974, pp.88ff)
has an extensive discussion of Luxemburg, but does not offer insights
which have not already faced." What I was trying to convey is not that
Mattick offers nothing but rather that the points he does offer, in the
context of my paper, had already been covered in the process of a critical
reading of others. Perhaps I missed something not covered by others; if
so, I'd appreciate any help.

On Marx showing the "unavoidability" of overproduction of Department I in
a socialist society, I think that is a stretch of Marx's intent.

>Just to put the point in my own terms: after fixed capital is replaced,
>there couldn't be sales from Dept I to Dept II for several years.
>Wouldn't this mean the idling of the machines with which the newly
>installed machines were produced-- leading to the former's moral
>depreciation, if not physical destruction?

>Shouldn't one expect then that even after fixed capital has been
>replaced, there will still be pressure for overproduction of new
>machines,which should give rise to hyper competition in the capital goods
>sector that leads to tremendous innovation and thereby inducements to
>quicken the turnover of capital? From my reading, exactly because of
>persistent disequilibrium and overproduction capitalism has been such a
>dynamic and technologically innovative system.

I'll hold off on addressing the above two paragraphs as the issue of the
first paragraph is prior.

>At any rate, I think Mattick is correct to criticize Grossmann for having
>conceded that if the interdepartmental transfer of value and therewith
>the formation of production prices is considered, Bauer's two dept
>schemes can show the possibility of equilibriated growth, even if that is
>then treated simply as nothing more than ideal average of the
>accumulation process.

>The schemes --even Bauer's into which several more realisitic features
>are built--simply could never be turned into reality nor did Marx ever
>intend them as a model of reality. I thought Mattick was right about
>this, and I couldn't figure out why you disagreed.

It is of course correct that NONE of the schemes and models directly model
reality. Where do I say that I expect them to model reality, or what has
been said (by Mattick or others) to which you think I disagree?


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