Reply to Sabri and Gavin on response to Xxxx Xxxxxx: it ain'tme babe

[Rakesh Bhandari <rakeshb@xxxxxxxxxxxx>]

Sabri Oncu wants niceties and then accuses me of dumping garbage on
this list.  Oh well.


 Julio Huato wonders whether I read what he writes.

And I may be missing Julio's point but neither of us speaks without a
whole tradition behind us, and I situate Julio in that debate as he
doubtless situates me.

Julio has read Rosdolsky, and he knows that I am defending Grossmann
as I understand him againt whom he called the neo harmonists to whom
Julio seems to have an affinity (Rosdolsky makes a few too many
concessions himself).

Now Julio wrote:



> And this is exactly what Marx does in Capital, vol. 2, part 3.  He
> deliberately focuses on the proportionality conditions that make it possible
> for aggregate capital to reproduce itself.  He is, implicitly, looking at
> capitalist societies as dynamical systems, except that he uses simple
> algebra and numerical illustrations while nowadays people may use more
> advanced mathematical analysis.  But Marx focuses there on the system's
> stability.


I understand Julio to imply here  that Marx's reproduction schema
demonstrate the possibility of capitalism as an instrinsically stable
dynamical system.  That is, I understand Julio to have received
Marx's reproduction schema just as some of Newton's interpreters
understood his system to have demonstrated the dynamic stability of
the cosmic system and thus its rational intelligibility.

Like many Marxists before him, Julio seems to believe that Marx
constructed in the last section of Capital, vol II a proof of the
possibility of the dynamic equilibrium of an expanding capitalism and
that Marx understood the law of value as the mechanism by which an
anarchic, turbulent capitalism is returned to dynamic equilibrium.
Yet isn't this to understand capitalism as an inherently stable
system whose structure guarantees its permanence...unless of course
the Creator chooses it to close it down or the revolutionary
proletariat serves as just such a deus ex machina?

Now Julio may not be saying this; what is important is that the
Austro Marxists and Meghnad Desai and others are saying this.

 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.

However, even from this distance to reality, the schema already do
show that supply does not itself create its own demand (so Marx
remains throughout a critic of Say's Law); accumulation--not
supply--creates demand: demand is not created to put to use what has
been or can be supplied. Accumulation and thus demand are a function
of anticipated profitability and competitive burdens. Accumulation
does not take place to solve the realization problem; there is no
*intended* link between accumulation taking place and the realization
problem getting more or less solved( see Desai, Marxian Economics, p.
180-81).

More importantly,  it is doubtful--and this is in fact what Marx is
trying to demonstrate--that demand will be created in the correct
value and material proportions to sop up growing supply, so if
capitalism does reproduce itself on an expanding scale it will likely
do so with all kinds of disturbances and disproportionalities and
crises. We can already see this on the basis of Marx's totally
unrealistic reproduction schema which were not meant to suggest in
any way that capitalism is possibly an intrinsically stable dynamical
system. But once Marx is understood that way, all is lost; that is
why I think Grossmann's very pointed criticism of the neo harmonists
is not garbage.

All this said, Marx does not in fact locate capitalism's most
important contradiction in the imbalances between the demand which
accumulation creates and growing supply. This is argued with insight
by Mattick Sr in Economic Crisis and Crisis Theory.

Rakesh






~~~~~~~
PLEASE clip all extraneous text before replying to a message.