[OPE-L] Luxury spending, Grossman, Kalecki

[Rakesh Bhandari <bhandari@xxxxxxxxxxxx>]

While I have shown that Bauer, not Grossman, treated luxury spending
as a residual, I do not think this undercuts the importance of
Andrew's model in which autonomous capitalist luxury spending
sustains aggregate demand with an unstably increasing rate of surplus
value.
Andrew has shown that such an accumulation path is possible in pure
economic terms. But as Duncan Foley notes; "If capitalist consumption
were to fill the [demand] gap, it would mean an ever increasing and
socially explosive gulf between a lavish and wasteful capitalist life
style and a stagnant or declining standard living of workers." Adam's
Fallacy, p. 138
Capital accumulation need not result in economic breakdown before it
creates explosive social crises.
I think there is much to say about this kind of critique of Grossman,
and have enjoyed the friendly offlist discussion with Andrew whose
models are seeming more powerful to me the better I understand them.
But I don't think he need be as critical of Grossman as he has been.
Rakesh