globalisation/Landauer/Grossmann

John R. Ernst ernst at pipeline.com
Sun Aug 27 23:20:40 MDT 1995


Rakesh,

The points in your post, I think, prove my point.  Let's consider the
second one first. In it, you state that because of innovation some (perhaps
a great deal or even all ) suplus labor will not be validated.  I thought
this loss was captured by Marx's notion of moral depreciation.  If Marx did
get it right, then treatments of fixed capital which simply point to this
loss as unexpected are wrong.  In that sense, I do not take Grossmann
seriously when he quotes Sismondi or attempts to deal with the devaluation
of fixed capital without introducing moral depreciation.   The question is
how does Grossmann deal with the two concepts or, put simply,  have I got
this wrong?


Your post follows.


Regards,


John







On Fri, 25 Aug 1995 jones/bhandari <djones at uclink.berkeley.edu> said:


>My reply will be brief; I am going to study Alan Freeman's recent "Marx
Without
>Equilibrium" (Capital and Class, Summer 1995)  and restudy Grossmann's
"Marx,
>Classical Economics and the Problem of Dynamics" to see what insights they

>provide.
>
>1. In this piece, Grossmann pays careful attention to the implications of
what
>he attempts to establish as a tendency towards the overproduction of fixed

>capital.
>
>Grossmann's student Blake also attempts to establish why crisis appears
first
>as an overproduction of not consumer goods but producer goods (a problem
for
>underconsumptionist theory if true of course).  What I want to underline
here
>is that we should not deduce from the limits of the extended Bauer model
that
>Grossmann simply failed to treat fixed capital.  What he has to say may
well
>turn out to be profound.
>
>2.  innovation does not render current constant capital useless; it can
still
>be a tool of great potential usefulness.  The surplus labor whose
extortion the
>functioning fixed capital makes possible however will simply not be
validated
>as socially necessary or very little of it will be so validated.  And if
the
>innovation is of a Schumpeterian radical kind (railway over mailcoach)the

>functioning capital may indeed not be able to transfer any of its value to
a
>commodity the value of which could be manifested in exchange.
>
>As for your questions about Grossmann's treatment of price and Landauer's

>analysis of the mechanism through which the rate of profit falls on total

>capital, I am hoping that Freeman's piece will help me.  As you must now,

>Freeman points to your work (John Ernst) as the earliest formulation of
the
>theory which he is advancing.
>
>Rakesh
>
>
>
>
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