Re: The relationship between capital accumulation, economic growth, and equilibrium
I would be interested in seeing the ideas/assertions in this piece being applied to the process of globalization (privatization of international commons) and the controversy about whether 1) it is necessary and why 2) it does (not) result in any gain for the working class. Joanna Jurriaan Bendien wrote: Rakesh, you wrote: Marx's reproduction schema do not show even the possibility of capitalism as an intrinsically stable dynamical system. How could they? They assume a constant OCC, fixed values, annual turnover, exchange at value (rather than price of production)? They are too far removed from the reality of an actual capitalist system to lay bare its laws of motion. Correct. I think that above all, Marx wanted to show in the second volume how it is possible for Capital to dominate the entire economic life of an economic community, and internalise more and more of the conditions for its own economic reproduction (cf. Roman Rosdolsky, The Making of Marx's Capital). In other words, how the relationships, which he had analysed at the level of the enterprise and the labour process in the first volume, asserted themselves at the level of social production as a whole, the interactions between enterprises. The subtitle of the second volume is, in fact called the process of the circulation of capital and not, for example, the process whereby Capital finds its equilibrium or the process by which Capital ensures economic growth. Marx is not trying to find the necessary conditions for total supply and total demand to balance, he is rather seeking to specify the necessary conditions for the accumulation of Capital, when the circulation of money and commodities (commercial trade) invade an entire economic community, rather than exist merely at the boundaries of an economic community, as happened for most of the economic history of trade. Precisely because any economic community is faced with the necessity of producing specific types of use-values (in the first instance, means of production and means of consumption), Marx is investigating how Capital modifies and regulates that process. A good discussion of the reproduction schemes is also provided by Edward Chilcote, see www.gre.ac.uk/~fa03/iwgvt/files/97Chilcote.rtf+Chilcote+reproduction+schemes hl=nlie=UTF-8 I think that the best way to understand the connection between economic growth and capital accumulation in Marx's theory is to say that economic growth IS CONDITIONAL on capital accumulation, capital accumulation is the sine qua non, the necessary condition. This formula, or something like this, I think is apposite, because it shows that economic growth and capital accumulation are not at all the same thing, they are different things. You can have relatively slow growth in real production, and relatively fast capital accumulation, precisely because the capitalist mode of production is a contradictory unity of the production process and the circulation process, as Marx himself says repeatedly. With the aid of credit and monetary manipulations, and given a high productive capacity (such that a smaller proportion of the workforce produces a larger physical output), circulation processes can become semi-autonomous from production processes. The implication of this is as follows: Marx describes the basic forms of capital as production capital, money capital and commodity capital, but it may be that an increasing proportion of capital is tied up in money capital and commodity capital, and Marx says, that this is ultimately purely a question of relative profitability and profit expectations. Rosa Luxemburg said quite correctly that under capitalism, simple economic reproduction is conditional on expanded reproduction, and that the implication of this is, that capitalism requires a continual expansion of the market, and it is in this expansion of the market that she sees the root cause of imperialism. But this side-steps the question: market for what, exactly ? A market for money capital, commodity capital, or production capital ? In fact, this issue is crucial to understanding what has happened in the world economy, where the volume of annual world trade exceeds the volume of new valued added, and a gigantic mass of capital is tied up in monetary speculation. When Harrod and Domar tried to derive the conditions for a steady economic growth path in the 1950s and 1960s, they do not really understand this, because growth in real output and capital accumulation are really separate questions, yet bourgeois economics is unable to treat them as separate questions, because it fails to understand, or hides, the social framework within which these social processes occur. The objective of the owner of capital is not to raise output as such, but to raise output to make more money, and if he cannot make more money from that, he does not raise output, but he takes his money somewhere else, where he can make more money. This insight enables us to specify another observation: the
Re: The relationship between capital accumulation, economic growth, and equilibrium
Thanks. I will try to work on the problem. Between you and me, I had the misfortune of working with a pack of idiots inadvertently, although I also connected with some of the best. But anyway, the idiocy set me back a decade in terms of research. I suppose I also have to say that my theories about the precise phase I was at sexually did not help either, and because of the stupidity of contemporary sexual mores you can get a lot of problems, since people just will not leave you alone in your private sphere when you want to work without interference. There were just a few personal issues I did not anticipate correctly, bit of human error. All in all, I often feel hopeless and think I just don't care anymore. But this is an extremely dangerous sentiment, and, I ought really to work towards being more responsible and just avoid all the idiots. So anyway I will try to tackle the problem in the future. J. - Original Message - From: joanna bujes [EMAIL PROTECTED] To: [EMAIL PROTECTED] Sent: Sunday, September 28, 2003 8:47 PM Subject: Re: [PEN-L] The relationship between capital accumulation, economic growth, and equilibrium I would be interested in seeing the ideas/assertions in this piece being applied to the process of globalization (privatization of international commons) and the controversy about whether 1) it is necessary and why 2) it does (not) result in any gain for the working class. Joanna Jurriaan Bendien wrote: Rakesh, you wrote: Marx's reproduction schema do not show even the possibility of capitalism as an intrinsically stable dynamical system. How could they? They assume a constant OCC, fixed values, annual turnover, exchange at value (rather than price of production)? They are too far removed from the reality of an actual capitalist system to lay bare its laws of motion. Correct. I think that above all, Marx wanted to show in the second volume how it is possible for Capital to dominate the entire economic life of an economic community, and internalise more and more of the conditions for its own economic reproduction (cf. Roman Rosdolsky, The Making of Marx's Capital). In other words, how the relationships, which he had analysed at the level of the enterprise and the labour process in the first volume, asserted themselves at the level of social production as a whole, the interactions between enterprises. The subtitle of the second volume is, in fact called the process of the circulation of capital and not, for example, the process whereby Capital finds its equilibrium or the process by which Capital ensures economic growth. Marx is not trying to find the necessary conditions for total supply and total demand to balance, he is rather seeking to specify the necessary conditions for the accumulation of Capital, when the circulation of money and commodities (commercial trade) invade an entire economic community, rather than exist merely at the boundaries of an economic community, as happened for most of the economic history of trade. Precisely because any economic community is faced with the necessity of producing specific types of use-values (in the first instance, means of production and means of consumption), Marx is investigating how Capital modifies and regulates that process. A good discussion of the reproduction schemes is also provided by Edward Chilcote, see www.gre.ac.uk/~fa03/iwgvt/files/97Chilcote.rtf+Chilcote+reproduction+scheme s hl=nlie=UTF-8 I think that the best way to understand the connection between economic growth and capital accumulation in Marx's theory is to say that economic growth IS CONDITIONAL on capital accumulation, capital accumulation is the sine qua non, the necessary condition. This formula, or something like this, I think is apposite, because it shows that economic growth and capital accumulation are not at all the same thing, they are different things. You can have relatively slow growth in real production, and relatively fast capital accumulation, precisely because the capitalist mode of production is a contradictory unity of the production process and the circulation process, as Marx himself says repeatedly. With the aid of credit and monetary manipulations, and given a high productive capacity (such that a smaller proportion of the workforce produces a larger physical output), circulation processes can become semi-autonomous from production processes. The implication of this is as follows: Marx describes the basic forms of capital as production capital, money capital and commodity capital, but it may be that an increasing proportion of capital is tied up in money capital and commodity capital, and Marx says, that this is ultimately purely a question of relative profitability and profit expectations. Rosa Luxemburg said quite correctly that under capitalism, simple economic reproduction is conditional on expanded reproduction, and that the implication of this is, that
