[OPE-L:2931] Re: Need 1 and Luxemburg's *Accumulation of Capital*

From: Andrew_Kliman (Andrew_Kliman@email.msn.com)
Date: Fri Apr 28 2000 - 14:48:21 EDT

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A reply to Paul Zarembka's OPE-L 2924:

I noticed your smiley, so this may have been a joke. But if so I don't
get it, so I'll try to respond seriously.

(1) I don't understand the relevance of the point that RL's
_Accumulation_ is "more ignored on this list than TSS." I wasn't
discussing the reception of the TSS interpretation of Marx's value theory
specifically (or mainly) on this list, and my point was not that it has
been ignored. What I was getting at is rather (a) the resistance of its
critics has no bearing on whether it is correct, and (b) they resist it
because they do not apply empirical criteria to decide among

(2) Since I was not talking about this list, the relevant comparison is
between the *entire record* of how RL's work, and the TSS interpretation,
have been treated by their respective critics. Her work was addressed
promptly, not ignored at all. It was studied seriously and replied to
seriously (even if not in every case). There's just no comparison with
how the TSS interpretation has been treated, although things have
recently begun to change a wee bit, thanks in part to your efforts as
editor of _Research in PE_.

(3) Your question seems to ask whether I would agree that RL's
opponents' resistance to her theory of accumulation has no bearing on
whether it is correct. The answer is yes, I agree.

(4) Your question seems to ask whether I would agree that RL's opponents
are to be criticized for not using empirical criteria to evaluate her
interpretation of Marx's theory. The answer here is no. I think people
*have* used empirical criteria to do so. Dunayevskaya, for instance,
shows several instances in which RL overlooked or misread what Marx
wrote, and argues against RL that the Vol. II analysis, although indeed
not prepared for publication, is essentially summarized in Vol. I and
elsewhere. Dunayevskaya also singles out several differences between
Marx's and RL's theories.

(5) Perhaps you were asking whether I would agree that RL's opponents
are to be criticized for not using empirical criteria to evaluate her
*theory* of accumulation. Here again the answer is no. The reason is
that she essentially stated an *impossibility* theorem (expanded
reproduction is impossible in a closed, purely capitalist society).
Claims of impossibility cannot be decided empirically.

For instance, the Okishio theorem is also an impossibility theorem. It
cannot be challenged empirically, by showing that in reality the profit
rate tends to fall. It can only be challenged deductively, by showing
that the proof of impossibility is flawed. This is what we have done.
Likewise Marx's schema of expanded reproduction show deductively that the
underconsumptionist impossibility claim is false. I say this in full
recognition of (and agreement with) VIL's point that schemes and models
cannot *prove* anything about reality. But taken literally, he isn't
right to claim that they can *only* illustrate. They can also disprove
statements of necessity and impossibility.

Let me clarify one thing: the schema of expaned reproduction do not
prove that expanded reproduction is possible in a closed, two-class
capitalist society. Nor do they disprove the contention that it is
impossible. They rather disprove the *underconsumptionist argument* for
impossibility -- i.e., the argument that the growth rate of Dept. I
cannot "ultimately" outstrip the growth rate of Dept. II, because all
production, even under capitalism, is "ultimately" production for
consumption, not production for the sake of production. [BTW, this
perspective makes the class antagonism a matter of distribution of net
output, rather than also and mostly of the domination of workers by the
products of their own hands.]

*Alternative* arguments against the implications of the reproduction
schema, such as those you advance in your paper (which I was able to read
the other day) must therefore be considered on their own terms. The
refutation of the underconsumptionist argument does not constitute a
refutation of them.

(6) I had some trouble understanding your paper. I never understood
what you think is the definitional problem, or how that relates the the
rest (middle) of the paper. More important, I think, are your criticisms
of the implications of Marx's reproduction schema. If I understood you
correctly -- and I'm far from certain about that -- you have three

The first is that the schema imply that expanded reproduction requires
that means of production that would have been used in Dept. II are
diverted to Dept. I, but (you seem to argue; unfortunately I don't have
the paper here with me) means of production are not in fact physically
homogeneous, and thus the change in their destination isn't possible. Or
perhaps the point is that the change in their destination may not be able
to occur without disruption (disproportionality crisis). I agree with
the latter, but not the former. Put differently, this is not a
*long-run* barrier to expanded reproduction.

I'm a bit surprised that you didn't cite Marx in regard to this. In
section I. (b) of Ch. 21 (Vol. II), end of first para., he writes

"to make the transition from simple reproduction to expanded
reproduction, production in department I must be in a position to produce
fewer elements of constant capital for department II, but all the more
for department I. This transition, which can never be achieved without
difficulty, is made easier by the fact that a number of the products of
department I can serve as means of production in both departments."

In any case, I'm very glad you're dealing with this issue. Almost all of
the literature (not RL, though, or RD) deals with the schema of simple
and expanded reproduction as two distinct models of *balanced* growth.
Then they debate whether the schema show that balanced growth takes place
(or can take place) or whether the schema highlight obstacles to balanced
growth. But I have long been of the opinion that Marx was doing a
*comparative* exercise, analysizing the "transition from simple
reproduction to expanded reproduction," or, in other words, the process
of unbalanced growth, the expansion of Dept. I *relative to* Dept. II.

(7) The second criticism is the effective demand argument. RL makes it,
as you noted, and Joan Robinson emphasized it. Where is the demand for
the additional means of production? (Also Bleaney has a lot of
discussion of this. It is on its basis that he says, much as you do,
that RL wasn't an underconsumptionist. Consumption demand per se wasn't
the issue.) I find this line of argument perplexing. Surely there can
be a lack of demand (that's what crisis *is*), but that doesn't prevent
expanded reproduction in the long-run unless there's a permanent
structural lack of demand (stagnationist tendency). And what would be
the reason for a stagnationist tendency if not the alleged-but-refuted
notion that demand for means of production cannot ultimately outstrip
demand for consumer goods, so that underconsumption constrains *total*

The point is that the schema of expanded reproduction show (under their
assumptions of homogeneous means of production, etc., etc.) that *if*
demand for means of production is strong enough, lack of consumer demand
is not an obstacle to expanded reproduction. But this implies also that
when there is a lack of *total* demand, it cannot be accounted for by
appeal to underconsumption alone. It is rather that investment demand --
which could in principle rise to offset any shortfall in consumption
demand -- has not done so. So the issue boils down to why investment
demand is too sluggish. The schema show that the answer is not that
investment demand is constrained by consumer demand. And to say that
investment demand is constrained by investment demand is meaningless.
Hence, the problem that *appears* as a demand problem *originates* from
outside, outside the market. The origin is instead the tendency of the
rate of profit to fall IN PRODUCTION, and the lack of surplus-value
GENERATED IN PRODUCTION, *prior* to the sale (or non-sale) of the
products on the market. (This is what I think RD was arguing against the
"effective demand" claim.)

(8) The third criticism of the implications of the reproduction schema
seems to be that they do not incorporate technical innovation (which is
correct), and (unless I'm mistaken) a suggestion that they couldn't be
extended to incorporate it. Expanded reproduction could not occur in a
closed, two-class capitalist nation that undergoes technical change.

I think part of this is right, at least to some extent. Because the
schema assume unchanged values, expanded reproduction is *both* physical
expansion and expansion of value. But if values fall do to technological
progress, then we need to consider them separately. I'm convinced that
there is no barrier under the stated conditions to the *physical*
expansion of the system, taken abstractly. But there is a continuing
problem of lack of self-expansion of value. As I was suggesting above,
this can clearly retard investment demand (and consumption demand).
Again, this appears as a demand problem, but originates on the supply
side, in the production process.

I don't construe this as a criticsim of the schema, because I don't think
they were intended to address this issue. Where Marx does consider the
circulation of capital in the context of revolutions in value (e.g., Ch.
4 of Vol. II and Ch. 15 of Vol. III) he's well aware of the problems
these revolutions in value create.


Andrew Kliman

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