Re: [OPE-L] simple reproduction

From: Rakesh Bhandari (bhandari@BERKELEY.EDU)
Date: Sat Mar 31 2007 - 00:08:06 EDT

I should have appended this quote to my post:

This example of fixed capital--and in the context of reprouction on a
constant scale--is a striking one. A disproportionate production of fixed
and circulating capital is a factor much favoured by the economists in
their explanation of crises. It is something new to them that a
disproportion of this can and must arise from the mere *maintainence* of
the fixed capital; that it can and msut arise on the assumption of an
ideal normal functioning, whith simple reproduction of the social capital

Capital, Vol II. Vintage1981, pl 544-45. (the end of section 11 of chapter

And i should disclose the immediate reason for my interest in this. I have
just read Rick Kuhn's biography of Grossman. Which captures vividly the
tragedy of Jewish Marxists in Central Europe. the struggles against and
within social democracy, the conditions of Marxist intellectual
production, and very much else.

 It's a very powerful book which I recommend most highly. Which will
surprise no one who has read my posts.

 Rick also underlines that Grossman highlighted the importance of his
analysis of simple reproduction. Rick does not mention that the GBCP
accused Grossman and Preobrazhensky of social fascism for implying that
capitalism could settle into simple reproductin (akin to Keynesian
unemployment equilibrium?), but I speculate this may have been part of
the reason Grossman called attention to his disequilibrium interpretation
of simple reproduction.

Yours, Rakesh

>> On Fri, 30 Mar 2007, Rakesh Bhandari wrote:
>>> I was wondering whether anyone could recommend any other work or
>>> offer some analytical comments on just why capitalism could not
>>> settle into simple reproduction (stationary state?) or why even
>>> if were constrained to do so it would have difficulty
>>> maintaining equilibrium.
>> It's possible "in principle",
> Yes, I see your point that follows also. And it does seem to me that
> simple reproduction is possible in principle, but I find this following
> objection in Mattick's reading of the chapters on simple reproduction. I
> don't see that he or Marx is right.
> "Marx then showed how the double character of the commodity, as value and
> use value, transforms even the apparent equilibrium of simple reproduction
> into disequilibrium. Thus, for example, the wear and tear and replacement
> of fixed capital can produce dislocations in the value-defined conditions
> of exchange, destroying any possibility of equilibrated reproduction.
> Without going into Marx’s examples of the appearance of disproportionality
> within simple reproduction, it here needs to be stressed only that they
> apply exclusively to capitalist reproduction.
> Once the capitalist form of reproduction is abolished, it is only a matter
> of the volume of the expiring portion-expiring and therefore to be
> reproduced in kind of fixed capital.. . varying in various successive
> years. If it is very large in a certain year ... then it is certainly so
> much smaller in the next year. The quantity of raw materials,
> semi-finished products, and auxiliary materials. does not decrease in
> consequence. Hence the aggregate production of means of production
> would have to increase in the one case and decrease in the other. This can
> be remedied only by a continuous relative overproduction. There must be on
> the one hand a certain quantity of fixed capital produced in excess of
> that which is directly required; on the other hand, and particularly,
> there must be a supply of raw materials, etc., in excess of the direct
> annual requirements... – This sort of overproduction is tantamount to
> control by society over the material means of its own reproduction. But
> within capitalist society it is an element of anarchy."
> So as I understand the argument: given the conditions of simple
> reproduction there could not be varying annual levels in the production of
> 'fixed' capital. For the 'fixed capital' to be available, then, when it
> needed to be replaced--and given its physical or use value characteristics
> it would turn over more slowly than wage goods--fixed capital would have
> to be overproduced every period. This would not be a problem in non
> capitalist production; on the contrary. But for capitalism it is a source
> of anarchy.
> If this argument is valid, then what are consequences of this anarchic
> element?
> I'm confused about this, and appreciate much the response.
> Yours, Rakesh
> if the capitalists consume the
>> surplus and just carry out replacement investment.  But I'd say
>> the instability stems from this consideration: as soon as each
>> capitalist sees that his competitors are just plodding along doing
>> the same thing over and over, he realizes he could carry out a
>> little investment, improve his technology, and make a killing.
>> Excessive stability creates a strong incentive to destabilize.
>> Allin Cottrell

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