[OPE-L:7302] [OPE-L:831] Say's Law (question on Duncan's interpretation)

Rakesh Bhandari (bhandari@phoenix.Princeton.EDU)
Tue, 6 Apr 1999 01:38:52 -0400 (EDT)

As Ajit begins to understand part one as the commencement of Marx's
critique of the Ricardian theory of money and partial gluts or the labor
allocation problematic as he would have it, do note that
Marx also did not think, as Duncan F. seems to suggest, that "an
expansion of money commodity production" could itself offset the general
overproduction of commodities which appears as "a time delay between the
finishing of commodities and their sale" given the development of "a
tendency for workers' households and firms to hold money rather than
spend it."

Marx writes for example: "popular opinion is naturally inclined to
attribute this phenomenon [of stagnation] to a quantitative deficiency in
the circulating medium, since it sees money appear and disappear less
frequently at all points on the periphery of circulation, in proportion as
the circulation of money slows down." The footnote includes: the Swiss
economist Herrenschwand's "fanciful notions amount merely to this, that
the contradiction which arise from the nature of commodities, and
therefore come to the surface in circulation, can be removed by increasing
the amount of the medium in circulation." Capital I. Vintage. 217-18

Yet Duncan F writes: "Again, a rise in T(c) or T(f) [time delays in
workers spending their wages and capitalists using monetary assets to
finance new production, respectively] will create a crisis of generalised
overproduction of commodities. In principle an expansion of money
commodity production could offset such changes in spending delays."

Again, I am not making an argument, only suggesting the one that needs to
be made by full time specialists: no interpretation of Marx's critique of
Say's Law is complete without an explanation of why Marx didn't think
additional production of the money commodity in itself could generally
remedy universal gluts.

This is obviously not an idle question in Japan today.

Duncan F suggests that the spending lags that cause (?) general
overproduction are the specific behavioral propensity of bourgeois agents,
who buy in order to sell. I don't follow Duncan F's explanation
for why such agents would actually enforce periodically such spending
delays as to cause general overproduction.

If Duncan F or anyone else wants to expand, I'll read on.