[OPE-L:3217] Re: Re: RE: Re: Accelerated ACcumulation

From: Rakesh Bhandari (bhandari@Princeton.EDU)
Date: Mon May 15 2000 - 21:08:27 EDT

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Re: 3206

  Hence, "the Grossmann/Bauer
>model breaks down because of excess demand."
>And it really is a matter of excess demand in *physical* terms.

Andrew, it is indeed true as Sweezy pointed out long ago that the scheme
breaks down not simply because of a shortage of surplus value but because
of an accelerating rate of accumulation (that is, ever greater 0f SV
capitalized or in your words excess demand). However mp and lp are being
added at a constant rate because the values of c and v are being held
constant. So for the purposes of this model, it is the percentage of
*value* capitalized that is increasing.

But is an accelerating rate of accumulation not an interesting property to

1. Marx whose results we are trying to reproduce would not agree with your
negative dismissal. For very good reason, hethought that the rate of
accumulation would quicken as the rate of profit falls:

"[Richard] Jones is right to stress that despite the falling rate of
profit, the 'inducements and faculties to accumulate' increase. Firstly, on
account of the growing relative surplus population. 2ndly, beacuase as the
productivity of labor grows, so does the mass of sue value reprsented by
the same exchange value, ie. material elements of capital. 3rdly, because
of the increasing diversity of branches of production. 4thly through thre
development of the credit system, joint stock companies, etc, and the ease
with which the possessor of money can now transforme it into capital
without having to become an industrialist capitalist. Fifthly, the growth
in needs and desire for enrichment. 6thly, the growing mass of investment
in fixed capital, and so on." Capital 3 Vintage, p. 375

2. I don't see why it is implausible to grant Sweezy that while
entrepreneurs may indeed try to adjust their behavior to a shortage of
surplus value by curtailing accumulation (or excess demand as you put it),
competition will force them to continue technological improvements (assumed
to be tendentially non neutral) and thereby eventually to reduce the rate
of profit below the minimum required for production.

Yours, Rakesh

ps I haven't gone through the new version of your formal presentation.

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