[OPE-L:6978] [OPE-L:471] Kliman on Brenner

Rakesh Bhandari (bhandari@phoenix.Princeton.EDU)
Mon, 22 Feb 1999 10:09:20 -0500 (EST)

>From Andrew Kliman on 2 Sept 1998:

I haven't read Brenner's article yet, so I want to hold off
commenting on much of what Rakesh says. But this much I can say:

(1) Brenner's argument against Marx's "Malthusianism" is a valid
argument against the SIMULTANEIST interpretations of Marx's
argument, the interpretations which hold that the values and/or
prices of inputs are equal to the values and/or prices of
outputs. By this, I mean that, given a constant real wage, the
simultaneist "definition" of the rate of profit does indeed imply
that the rate of profit can only fall if the output/labor ratio
does not keep pace with the capital/labor ratio, or, what is
equivalent, the output/capital ratio falls. This is what Brenner
says. He's also right that this means that "overall
productivity" must fall.

(2) The problem with Brenner's argument is that he takes for
granted that the simultaneist interpretations of Marx are
correct. This is peculiar (but almost ubiquitous) because Marx's
argument under these interpretations is silly and wrong.

(3) I more or less agree with Rakesh that "Brenner has confused
physical or real output with its value." The very essence of the
temporalist interpretation of Marx's value theory, and critique
of the simultaneist interpretations and results, is that physical
quantities and quanta of value change at different rates and even
in opposite directions. Under the temporalist interpretation,
what Brenner says no longer holds: we have shown that, with a
constant real wage, the profit rate can fall even with a rise in
the output capital ratio, for the reasons (based on rising
productivity and falling values and/or prices) that Rakesh

(4) But it is INSUFFICIENT to point to a "confus[ion]" on
Brenner's part, and it may actually not be a "confusion" at all.
The simultaneists are VERY well aware that values fall as
productivity rises, and therefore that, for instance, the value
of output can fall even though the mass of output rises. It is
INSUFFICIENT, therefore, to challenge their arguments (or
Brenner's, which is a simultaneist argument itself) by referring
to falling values. They'll jump up to the blackboard (or
whatever) and immediately show that you are wrong. For instance,
they'll show that increasing productivity, although it lowers
unit values, RAISES the profit rate instead of lowering it,
because the reduction in values causes the "cheapening of the
elements of constant capital." Basically, what this means is
that, although the output in the numerator of the profit rate is
cheaper, so are the machines, etc. in the denominator -- WHEN

(5) To dispose of Brenner's argument, therefore, one must not
only invoke falling values. ONE MUST REPUDIATE SIMULTANEOUS
VALUATION, especially the simultaneist definition of the profit
rate. One must recognize that the fall in the value (or price)
of output does not affect the sum of value advanced as capital
prior to the fall, precisely because it has already been
advanced. It is a done deal. Therefore, whereas under
simultaneous valuation, falling values are of no importance (all
ratios of values, such as the rate of profit, remain unchanged),
under temporal valuation, the fall in the prices of outputs
RELATIVE TO inputs definitely does matter. It lowers the profit
rate. Put differently, what must be invoked against Brenner and
other simultaneists is not falling values (or prices) per se, but
falling values (or prices) of outputs *in relation to* inputs.

(6) One cannot accept this argument -- or use the falling value
argument to defend Marx's law of the tendential fall in the
profit rate -- and, at the same time, advocate Moseley's
interpretation of Marx's value theory (as Rakesh has done),
because Moseley is a simultaneist. In other words, it follows
from his interpretation that riding productivity and falling
values will RAISE, not lower, the profit rate.

(7) "Carchedi has corrected Pasinetti ...." This is rather like
saying Copernicus corrected Ptolemy, or Einstein corrected
Newton. It's no mere correction, but a wholly different
"paradigm." Pasinetti is a simultaneist, while Carchedi is a
temporalist. (I'm also interested in knowing what arguments of
the two authors Rakesh is referring to.)

(8) "Grossmann showed brilliantly that the decline in the rate
of profit can be without consequence as regards capital
accumulation and capitalist
consumption for some time."

I assume this refers to his reworking of Bauer's example. It
SHOWS nothing. Grossmann merely ASSUMES that capital
accumulation proceeds at a constant rate despite the FRP. And
when the crisis comes in year 36 or whatever, the FRP has NOTHING
to do with it, again by assumption. Rather, Grossmann's
assumptions eventually force the capitalists to demand more
investment goods than have been produced. End of story.

Let me refer you again, Rakesh, to my comments on the
relationship between the FRP and capital accumulation.