[OPE-L:2969] Re: Re: Need 1 and Luxemburg's *Accumulation of Capital*

From: Paul Zarembka (zarembka@ACSU.BUFFALO.EDU)
Date: Sun Apr 30 2000 - 16:28:03 EDT

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"Andrew_Kliman" <Andrew_Kliman@email.msn.com> said, on 04/28/00 at 02:48

>... [Luxemburg's] work was addressed
>promptly, not ignored at all. It was studied seriously and replied to
>seriously (even if not in every case)....

Bauer, Eckstein, and Pannekoek rushed to print almost immediately after
her work was published. They didn't even have enough time to digest a
475-page, intense theoretical work. Lenin started a reply but never
finished it and I don't know that we even have serious fragments (or even
if he wrote fragments -- I only have seen his marginal notes on her book
which is translated for the first time into English in my paper).

After her murder, Bukharin undertook what could be called a serious hachet

>(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) ... [also on the empirical issue]

I wasn't thinking empirically, only theoretically, and don't see any
objection on my part to your discussion of the role of theory. As to
Dunayevskaya, I've read her but have not written up an analysis of her
reading of Luxemburg. This is next on my agenda.

>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.

Sorry, but who is VIL? As to underconsumption, I'm not 100ure how this
is meant. Luxemburg didn't use the term as far as I recall.

>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.

ditto, I think. In any case, I'm not sure if you discussing Luxemburg and
I prefer to move to your next point.

>(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

Perhaps I could clarify by saying that the problem is the LACK of
definition of "accumulation of capital" in Marx (unlike many other
concepts he introduced for the first time). I would invite readers to
watch Marxists using "accumulation of capital"; it is not difficult to
recognize that it is being using very frequently as a catch-all phrase
(which gives an illusion of Marxist scientific thinking, but rarely more
than an illusion). I have been doing this mental exercise for about
twenty-five years, and finally concluded it was time to take a stand.

>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 not sure where you are referring in the paper, but if you are
referring to the objection to Bauer's "transferring" units of value
between departments, the issue is deeper and goes to the very issue of
what it means to be writing down a sector. If you are referring to
another part, please let me know which.

>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."

If I recall, Dunayevskaya also cites this passage and so I should be
getting to it soon.

>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.

The reason I intend to deal with Dunayevskaya in a separate section of a
second paper (my paper is now divided into two, with the posthumous
critiques of Luxemburg getting special attention) is that in one sense I
think she understands Luxemburg better than many others. Specifically she
does not have a mechanical understanding of reproduction schemes.
However, she also tears Luxemburg apart and I want to relate to
Dunayevskaya seriously.

>(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 refutations of the "notion that demand for means of production cannot
ultimately outstrip demand for consumer goods", i.e., demand for means of
production can ultimately outstrip demand for consumer goods, are NOT
accepted in my paper. I try to go one-by-one through these arguments
(altho every time I think I can take a little rest, another one seems to
pop -- like Evenitsky, Science and Society, 1963 who claimed that if Rosa
Luxemburg had known of Lenin's (1893) first work she might have been saved
from writing "a lot of nonsense").

>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.)

In the first part of this paragraph, I think you are repeating arguments
of Bauer, Pannekoek, perhaps Grossmann. I cannot accept them for reasons
laid out in my paper. In any case, remember than the schemes ASSUME c/v
held constant over the long run (this is Marx himself) and, given that
context, I am not sure what you are saying in the middle portion. As to
Dunayevskaya, she surely does emphasis PRODUCTION of surplus value, not
realization, and I'll be drawing out the implications of that critique.

>(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.

A number of reviewers of Luxemburg think that she made her most telling
points regarding the role of technical change. I don't. Those who do
seem to me to be doing no more than making a concession to her as they
attempt to demolish the rest of what she did.

I cannot emphasis enough that here we have perhaps the LONGEST theoretical
work in Marxist political economy -- after Marx himself -- on a single
major topic (Luxemburg's "Accumulation of Capital" is a dense 475 pages),
done with extreme care to address the major theoretical antecedents to the
question, raising major issues, and mostly she has gotten dumped to the
sidelines theoretically. One reason is surely political struggles (right
or wrong) that Luxemburg's whole life generates. But another reason is
that (as it seems to me) reading her "accumulation" work is simply hard
and time-consuming and it is easier to take someone else's word for it
that they have read her correctly that she deserves to be dismissed (e.g.,
by Howard and King's two-volume study of Marxist economics).

Thanks, Andrew, for your comments. Paul Z.

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