Re: [OPE-L] sundry

From: Rakesh Bhandari (bhandari@BERKELEY.EDU)
Date: Thu Sep 07 2006 - 18:04:22 EDT

>  ----------------------------------------
>A simple response to the reasons I gave would be appropriate. Again
>here they are:
>1. I argued that Kalecki and Crotty were confused about whether
>profits determined investment or investment determined profit. I
>argued that Crotty was wrong to rule out the possibility that
>declining profitability could depress investment, and I said that Trigg
>is best understood as in agreement with Crotty. Trigg did not discuss
>but Crotty's work is invoked to make just this point in the Science and
>  -----------------
>I don't know about Crotty but Kalecki is pretty clear that investment
>determines profits

At times yes but not all times. See my OPE-L post

Here I wrote that:
"I am not so impressed with "The Determinants of Profits" in Theory
of Economic Dynamics (Monthly Review, 1971)...He says
profits in the preceding period are one of the important determinants
of capitalists' consumption and investment but provides no theory of
what the objective determinants of that are."

In the recent exchange Andrew emphasizes that Kalecki does not
clearly say that investment determines profits. But Crotty does say
that very clearly; I took the time to type out a long quote from
Crotty on just that (do remember Stavros'accusation that my posts
lack proper scholarly citations). I cited Crotty because of his
clarity and suggested that Andrew's work is usefully understood in
the context of Crotty's strong Kaleckian-Minskyan theses that
investment determines profits and that the reason for weakness in
autonomous increases in effective demand should be sought in the
financial sector.

Stavros also then cites Crotty in the course of the critique of Trigg!

At the same time, the whole Science and Society debate pretty clearly
gets wrong Grossman's understanding of the importance of capitalists'
own luxury spending (I have provided clear supporting evidence in a
previous post), and I think Ian would agree that there is some
overlap between Grossman's argument here and his own theorization of
capitalist luxury spending as a real cost. A real cost on the
development of the productive forces at least!


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