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


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.



On Fri, 25 Aug 1995 jones/bhandari <djones at> said:

>My reply will be brief; I am going to study Alan Freeman's recent "Marx
>Equilibrium" (Capital and Class, Summer 1995)  and restudy Grossmann's
>Classical Economics and the Problem of Dynamics" to see what insights they

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

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