Goodwin

[djones@xxxxxxxxxxxxxxxxxxx (jones/bhandari)]

Steve has referred more than once to the work of Richard Goodwin.

I was able to follow most of one of his short and provocative articles.

"The M-K-S System: The Functioning and Evolution of Capitalism" in The
Economic Law of Motion of Modern Society: A Marx-Keynes-Schumpeter
Centennial. CUP 1986.

M-K-S refers to, as the book title indicates, the three theorists.

I want to get right to Goodwin's specific comments on Marx's concept of the
industrial reserve army of labor as this may help to spur further
conversation on Malthusianism.

  So I will it to the experts to assess whether Goodwin is successful in
both laying bare  the demand side conditions necessary for a generalized
boom in which lower-cost processes, especially in energy and transport, are
absorbed and changes in production processes induced; and then explaining
why such a boom is unstable, yielding those oscillations in capitalist
development unrecognized in the steady state growth models of orthodox
economics.

Now to Marx.

Goodwin reflects on the ability of capitalism through automation to
overcome the labor shortages which have at times put upper limits on
growth.  So he now predicts that "in the long run there is little or no
limit: labor becomes more or less an endogeneous variable, growth being set
by the rate of accumulation."

And he remarkably says: "one might characterize the history of industrial
capitalism as follows: in the previous centry capitalists enjoyed a highly
elastic, cheap labour supply from agriculture, handicrafts and domestic
labour.  In our century, the rate of accumulation has been sufficiently
large to exhaust this source, leading to a tendency for rising real wages
to press on profits, with sharpened conflict over distribution.  With the
gradual introduction of automation, it is conceivable that there may be a
reversion to the earlier condition."

And then he envisions: "The climate of the labor market under these
conditions would probably be very different from that in the 19th century.
Having finally tasted power and high wages, the working class is not likely
to be as weak as formerly.  On the other hand, the great wealth of the
modern world may and probably will be deployed to blunt protest by lavish
social subventions."

Maybe one of the theoreticians on the line will find Goodwin's scenario for
the future interesting.

Rakesh




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