In the basic theory there seems to be important confusion, but I may be missing the point.
1. Brenner sets out to free Marx's theory of value, accumulation and crisis from its putative Malthusian foundations. He argues that Marx's own crisis theory based on the falling rate of profit (FROP), rooted in upward pressure on the organic composition of capital--as well as the rival neo Marxist wage squeeze theory (to which Doug is an adherent, I believe)--is compromised by Malthusian premises.
Now Malthusianism is used loosely here.
a. the FROP theory is Malthusian because it suggest that "the output-labour ratio...is insufficient to counteract the parallel fall in the output-capital [sic] that [the rise in the organic composition of capital] brings about. The rate of profit falls, from this perspective, because, with the real wage assumed constant, investment in mechanization cannot but result in an increase in labour productivity (output-labor ratio) that is more than cancelled out by a decrease in capital productivity (real output-capital ratio). Were this theory correct what would logically be entailed is the impeccably Malthusian proposition that the rate of profit can be expected to fall because, as a direct result of capital accumulation, overall productivity--productivity *taking into account both labour and capital inputs*--can be expected to fall." (11)
Brenner has confused physical or real output with its value. Marx argued that the use values per unit of capital invested would tend to increase, and while value per unit would thus decline, the constant capital invested per unit would rise in relation to variable capital per unit. In this sense, one could say that the constant capital per unit of output tends to increase--as Carchedi has corrected Pasinetti-- while the variable capital and therewith the surplus value, assuming a constant rate of exploitation, per unit tends to decline, but this is not the same thing as saying that the capital-output ratio tends to increase.
However, if surplus value is to be expanded, an ever greater production of use values is indeed required to compensate for the decline in unit values. But unit values are obviously not declining and thus limiting the rise in the "real" output/capital ratio because of Malthusian limits on productivity but rather because the productivity of labor, indirect and direct, tends to increase.
What holds the output/ capital ratio down is thus *not* a Malthusian limit on physical productivity--indeed it need not fall in physical terms at all--but the decline in the value of each unit of an ever greater total accumulation of use values. What counteracts then the downward pressure on the rate of profit induced by upward pressure on the OCC in basic and non basic industries alike is ever greater levels of physical productivity by which the unit values of new constant and variable capital are reduced and new accumulation thereby "cheapened."
What however really beats off crises from the the fall in the rate of profit is ever larger scale, more capital intensive (higher OCC) investments (i.e., capital accumulation) which by continously reducing unit values effects an expansion of the market, i.e., the realization of ever greater mass of unit values, such that the mass of surplus value and therewith the consumption fund of the capitalist class are expanded in absolute terms, though the rate of profit on ever bigger capital investments continues to decline tendentially as a result of such capital intensive investment.
Grossmann showed brilliantly that the decline in the rate of profit can be without consequence as regards capital accumulation and capitalist consumption for some time. The history of the semiconductor history seems to bear out the truth of Marxian dynamics, including the haunting problem that the mass of surplus value produced will no longer be sufficient for continued accumulation (actually William Greider has good footnote on this in his Manic World Capitalism book).
It is the shortage of THE MASS OF SURPLUS VALUE in relation to the
larger scale, more "capital-intensive" accumulation continuously required to beat off the fall in the rate of profit, expand market share and eliminate competitors which kills capitalism, not a fall in the rate of profit per se.
The funny thing is that Brenner recognizes that the so called real output-capital labor ratio can decrease even as the the productivity of labor, both direct and indirect, has increased overall in real terms in a certain line of production. He gives the example of how a low cost producer, improving productivity vis a vis other firms in the branch, induces unit price declines and a reduction in the branch profit rate which "is typically registered both in a declining output-capital ratio and a declining profit share, because, in arithematical terms, it is simply the result of the higher cost firms' inability to raise their prices sufficiently over their (given) capital and wage costs due to the insufficient demand for their goods." (28)
But of course in this example the "real" output capital labor ratio for
the low cost producer has actually increased, while the the ratio in real terms for the branch as a whole has not decreased.
So here we have an example of an increase in the real output capital ratio which is an increase in the capital output ratio in value terms as well. And I don't think Brenner deals with how such a seeming paradox is possible, but the dual nature of the commodity, the *inverse* movement of use values and unit values, the contradictions between concrete and abstract labor--this is the conceptual foundation of Marx's theory, and underlined from the very beginning of *Capital*. I don't see how the NLR editors can think Brenner's essay is *the* successor to Marx's project, however successful it may be in its own project of explaining the nature of post war turbulence.
b. Brenner also suggests that the wage squeeze theory is Malthusian. He wants to show that just as a fall in the rate of profit is possible without a Malthusian decline in the real output capital labor ratio on the which the argument from upward pressure on the OCC putatively depends, falling profitability can obtain without real wages outstripping productivity gains as they slow down. (12)
Again, it is a bit funny that Brenner then accepts the logic of the Okisio theorem to argue that only real wage gains prevent technological advance from increasing the rate of profit.
Amazingly, Brenner reaches this "Malthusian" conclusion:
"...if labour is able to get *any* of the gains from the decrease in prices, then the aforementioned processes--by which a decline in profitability in a given line results from the failure of higher cost, lower profit producers in possession of fixed capital who suffere reduced profitability to leave the line--will indeed result in a fall in profitability for the economy as a whole. This is because the fall in profitability (the loss of profits) that results from the fall in price in the line will fail to be fully compensated by the rise in profitability (the gain in profits) outside that line: all of the losses sustained within the line stemming from the reduced prices are sustained by capital: but not all of the gains accrued outside the line from the same reduced price are accrued outside the line from the same reduced price are accrued by capital. To what *extent* there is a fall in profitability for the economy as a whole depends, of course, on the details of the given case." (29)
Of course this says that a fall a profitaibility depends on real wage gains. Whatever truth there may be to this Okisio-like conclusion--for an accessible defense see Phillipe van Parijs in Reccycling Marxism--it surely has the kind of Malthusian character Brenner claimed to oppose--that the ultimate cause of falling profitability is real wage gains.
2. I do find Brenner's alternative explanation of "cost cutting technology leading to overproduction" most ingenious, and lucidly presented. I think his alternative explanation has important roots in Preobrazhensky and the Uno School (esp. Itoh), though he seems to neglect the centrality of crises in inducing the scrapping of "obsolescent" fixed capital. This is key to Itoh's theory, Michael Perelman emphasizes it as well, as do James Galbraith and William Darity in their political theory of the business cycle.
best, rakesh