Re: Andrew T on Grossmann and Kalecki

From: Rakesh Bhandari (rakeshb@STANFORD.EDU)
Date: Fri May 28 2004 - 04:43:36 EDT

re Andrew T's piece on Kalecki and Grossmann in the latest Science
and Society. Perhaps I have read it too quickly, but I shall ask
these questions and then re-read it.

Dear Andrew T,
In your Kaleckian attempt to demonstrate that the stability of the
capitalist system ultimately depends on the willingess of the
financial sector to underwrite ever larger orgies of capitalist
consumption--rather than working class resistance to the rising rate
of exploitation and unemployment threat of late capitalism (see
Pietro Basso for findings that read like Grossmann's conclusion which
alas not in the translation that you cite, though it has been
translated by Kenneth Lapides; don't understand why you and Howard
and King are looking for capital's epochal contradictions in finance
and realization to the exclusion of the production of surplus value
when the global working class has been under assault to produce more
and then more in response to poor real profitability on marginal
investments)--you assumed that the rate of surplus value could rise
indefinitely in response to growing capitalist consumption. The
difficulty then becomes whether the financial sector will be able and
willing to underwrite that consumption.

I was wondering however whether you could share your numerical
calculations for s/v in each successive period after 35 (you graph
them) and your thoughts on whether such fantastic rates of
exploitation would be as tenable--let's say--existentially as it is
mathematically. It seems that such a rising s/v would be easier to
graph than to impose on actual working people. It doesn't seem
helpful to replace the provisional assumption of a fixed s/v for one
which has a fantastically impossible rate of growth.

Do note also that once the assumption of constant values is
dropped--and Grossmann was the first to say that Bauer's model was
totally unrealistic for not having done so--capitalist consumption
may be rising in real terms even as it falls in  in absolute terms
after period 21 in Grossmann's extended Bauer model. That is you
could get your increase in capitalist consumption without having to
allow the absolute value magnitude of capitalist consumption
increase. Without that increasing, s would also not increase as your
model stipulates. Of course the lower growth rate of s may not
decrease the rate of profit as the unit prices of what enter as c and
v would also be declining.

But it obviously gets complicated when said assumption is dropped.

I have several detailed comments on your paper, and you will probably
be interested in Rick Kuhn's latest paper on Grossmann's unpublished
replies to his critics--he speaks directly to those who criticized
the way he handled capitalist consumption.  It appears in the latest
Research in Political Economy.


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