jones/bhandari djones at uclink.berkeley.edu
Thu Mar 30 13:31:29 MST 1995

I need help understanding an argument by  Riccardo Bellofiore who argues
here that both Classical and neo-Classical economics has no real theory of
endogeneous structural development (Schumpeter is the lone successful
bourgeois success who for Bellofiore even outdoes most Marxists).  Is this
true? What real developments cannot be explained by classical and
neo-classical theory? What constitutes "endogeneous structural
development"?  What is the difference between a theory of adjustments and
endogeneous structural development? What exactly is it that is static about
bourgeois economics?

Is it true that bourgeois economics can only explain disruptions of
equilibrium as externally produced, i.e. by changes in what is economically
given?  What does it mean to say that equilibrium has been disrupted? What
are examples of these economic givens--population growth and savings?  Is
it possible to see the change in these givens as internally produced?

I would appreciate any help with these questions, including any suggested
readings.  Here is the passage from Bellofiore:

"Schumpeter's theory can be seen as a coherent bourgeois answer to Marxian
theory: intra-capitalist competition entirely explains structural change,
whereas for Marx innovation has its roots in capital-labor struggle in the
immediate process of production.  Both Marx and Schumpeter depict
competition as a dynamic process of differentiation and struggle among
firms rather the static competition of Classical and neo-Classical theory
(adjustment and tendency to equal profit rates), although for Marx
intra-capitalist competition (among and within sectors) can theoretically
be traced back to capital's hunger for surplus labor.

"This brief comparison between Schumpeter and Marx can support three
arguments useful for a reconstruction of Marxian critique of political
economy [only two follow--rnb]: (i)development according to Schumpeter is
different from mere quantitative growth, likewise Marxian accumulation is
not reducible to extended reproduction.  In both cases this is so because
of the central role in the two theoretical frameworks of disequilibrium and
dynamic competition; (ii)for Marx the labor theory of value is not only a
theory of relative prices in given conditions, but also and foremost a
theory of how conditions change.  In a similar way, in Schumpeter's model
the role of prices as optimal resource allocators is drastically reduced,
and capitalism is seen as an evolutionary process."

I would love to hear any elaborations of these two points.

Thank you

Rakesh Bhandari

R Bellofiore, Marx after Schumpeter, Capital and Class, no 24 Winter 1985

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