Re: (OPE-L) Say's Law in Marxian Theories?

From: A.B.Trigg (A.B.Trigg@OPEN.AC.UK)
Date: Wed Feb 25 2004 - 07:23:43 EST

This is something that I am currrently grappling with, so it is very useful for you to raise it. My reading of the Grossmanite defence against the Say's Law charge is that Grossman assumes that prices are equivalent to values, as in Capital vs I and II, and therefore supply is assumed equal to demand. Now the same charge has been levelled against the Marxian reproduction schema that Marx assumes that supply and demand are in balance, and therefore Marx assumes Say's Law to hold. The reply might be that Marx considers the reproduction schema as a special extreme in which balanced growth takes place; he explores the unlikely conditions under which supply and demand are in balance. By demonstrating how diffficult it is to achieve this balance Marx in fact falsifies Say's Law, showing that supply does not automatically create demand. Does this seem a sensible interpretation? 
Grossmann also assumes that supply and demand are in balance but then develops the reproduction 
schemes with a rising organic composition of capital to show that they break down. Now the point that could be made here is that for Grossman the breakdown is not due to the falsification of Say's Law. Supply and demand are assumed to be in balance throughout Grossman's simulation. But he introduces an addditional reason - as if Marx's falsification of Say's Law wasn't powerful enough - as to why expanded reproduction is unlikely over an extended period: namely, the law of the falling rate of profit. Issues of where the money and demand comes from for extended reproduction to take place are relegated to the heretic backwaters of underconsumptionism - all that matters is the SUPPLY of surplus value which dries up under the falling rate of profit.
Any comments gratefully received, or relevant references I should check out.

	-----Original Message----- 
	From: Gerald A. Levy [mailto:Gerald_A_Levy@MSN.COM] 
	Sent: Tue 24/02/2004 12:57 
	Subject: (OPE-L) Say's Law in Marxian Theories?
	John Rosenthal (1999) "Addressing the Dogma of Growth" in 
	Paul Zarembka ed. _Research in Political Economy_ 19, asserts
	that Grossman and "Grossmanian" theories (including that of
	list member Anwar Shaikh) assume "Say's Law".  Rosenthal
	makes the claim that Grossman's theory _implicitly_ assumes
	"Say's Law"  even though he acknowledges that Grossman 
	_explicitly_  rejected Say's Law.
	--  Do others agree that Grossman's theory implicitly assumed
	       Say's Law?
	-- Do "Grossmanian theories" assume Say's Law?
	-- Are there any Marxian theorists from a non-"Grossmanian" 
	       tradition which assume Say's Law?
	In solidarity, Jerry

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