help: simple reproduction from Halevi

jones/bhandari djones at uclink.berkeley.edu
Wed Oct 11 14:00:36 MDT 1995


Dear Professor Halevi:

Thank you for your clear explanation of how simple reproduction could be
approached.  In your model after four periods of capital widening in Div
II, it is possible to achieve simple reproduction, as the output of Div I
would then be used  no longer for the widening of Div II but  required for
the annual replacement of used-up fixed capital capital in that division.

Henryk Grossmann however has already pointed out that the four period
expansion of Div II, posited to eliminate overproduction in Div I, would
require an impossible increase in the working population. This point is
made at the end of the lengthy passage reproduced here.

Here then is  HG's analysis (who here, as everywhere, brings out the
dialectic of the technical and value aspects of capital which Marx held to
be the pivot of the critical conception):

"As long as the process or reproduction, and the problem of equilibrium are
regarded exclusively in terms of value, the problem under consideration
here will simply not arise, as the distinction in the lifeteime of fixed
and fluid capital applies to their natural form, not their value.  If one
looks at Marx's scheme for simple reproduction purely from the point of
view of value, and assumes an anuual renewal of all the parts of capital,
the resultant synchronization of the movement in the scheme would
obliterate the specific difference between fixed and circulating capital,
and hence and whole problematic conncected with the varying replacement
times.  This is because in the scheme, both fixed as well as circulating
capital, as values, are renewed annually.  The problem first arises when
circulating capital, as values, are renewed annually.  The problem first
arises when one looks at the scheme from teh aspect of use-value: at this
point the difference in the life of each kind of capital becomes apparent,
and hence the problem of different dates for their replacment.  (The
originally assumed synchronisation of replacement dates WAS ONLY A
PRELIMINARY APPROXIMATION, WHICH DOES NOT CORRESPOND WITH REALITY).
[emphasis mine] Whereas raw materials have to be renewed annually, fixed
capital (for example the 2,000 units in Department II of the scheme which
manufactures consumer goods) "is not renewed during its whole time of
functioning" because it its life adds up several years.  Consequently,
there can be no sales from Departmetn I, which manufactures fixec capital,
to Department II for several years.  However, since the annual productive
capacity of Department I remains at 2,000 units, overproduction must take
place there.  "There would be a crisis--a crisis of overproduction--in
spite of reproduction on an unchanging scale." So "normal"  production
could only tke place in Department I (if despite the assumption of simple
reproduction in Department I0 Department II was to expanded over a number
of years, thus creating a new, additional market for Department I each year
(accelerator principle).  However, this is ismpossible, as the more rpadi
growth of Department II, on the basis of a given technology, presupposes an
impossible increase in the working population.  Department II would have to
be doubled in the second year, and increased three-fold in the third; the
growth in the working population employed there would threfore have to up
by 100% in the second year of reproduction, 50% in the third, and 35% in
the fourth."

I think that Grossmann is showing that once time is recognized as an
irreversible flow, simple reproduction is impossible.  He also attempts to
analyze the dynamics which result from the tendential overproduction of
fixed capital-- itself the result of its technical aspect of durability and
from which Grossmann argues it is impossible to abstract in any schemas of
accumulation.   It is the dynamic analysis, rooted in such overproduction,
which I am wondering whether it has been developed.

Yours,

Rakesh Bhandari

Henryk Grossmann, "Marx, Classical Political Economy, and the Problem of
Dynamics, part II", Capital and Class 3 (Autumn 1977), pp. 81-82

>Comments by Joseph Halevi
>
>Similar passages can be found in Volume 2 of Capital. The point is
>correct. Say you start with a brand new machine which will last for
>five years and assume that one machine can produce one new machine
>each year. Assume for simplicity a dual economy in which the
>consumption good is produced by labor alone during the first year
>of the production of the new machine. After the first year the new
>machines are all installed in the consumption goods sector. Then after five
>years
>you will have five new machines while needing to replace only one.
>You can however tend towards simple reproduction by planning the
>sectoral distribution of the stock of capital. Thus by keeping one
>machine in the capital goods sector and 3 in the consumption sector,
>the single machine in the capital goods sector will always produce
>the replacement machine thereby ensuring simple reproduction.
>Numerically : Kk =   machines installed in the capital goods sector,
>Kc machines installed in the consumption goods sector; 1Kk produces
>one M, new machine which can go to either sectors. If during the five
>years of the life of the single Kk machine all new machines (of
>similar life span) are installed in the consumption sector, we have:
>
>First Year :       Kk =1, M=1, Kc = 0    replacement = u = 0
>Second Year :   Kk =1, M=1, Kc = 1    u = 0
>Third Year :     Kk =1, M=1, Kc = 2    u = 0
>Fourth Year:    Kk =1, M=1, Kc = 3    u = 0
>Fifth Year :      Kk= 1, M=1, Kc = 4    u = 1
>Sixth Year :      Kk= 1, M=1, Kc = 4    u = 1 no change thereafter.
>
>The schemas of simple and expanded reproduction and indeed all the
>analysis developed in Volume 2 are the most interesting part of
>Marx's economic writings, Volume 1 being too much under Ricardo's
>spell.
>
>Kindest regards, Joseph Halevi
>
>
>
>
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