(1) Brenner's argument against Marx's "Malthusianism" is a valid argument against the SIMULTANEIST interpretations of Marx's argument, the interpretations which hold that the values and/or prices of inputs are equal to the values and/or prices of outputs. By this, I mean that, given a constant real wage, the simultaneist "definition" of the rate of profit does indeed imply that the rate of profit can only fall if the output/labor ratio does not keep pace with the capital/labor ratio, or, what is equivalent, the output/capital ratio falls. This is what Brenner says. He's also right that this means that "overall productivity" must fall.
(2) The problem with Brenner's argument is that he takes for granted that the simultaneist interpretations of Marx are correct. This is peculiar (but almost ubiquitous) because Marx's argument under these interpretations is silly and wrong.
(3) I more or less agree with Rakesh that "Brenner has confused physical or real output with its value." The very essence of the temporalist interpretation of Marx's value theory, and critique of the simultaneist interpretations and results, is that physical quantities and quanta of value change at different rates and even in opposite directions. Under the temporalist interpretation, what Brenner says no longer holds: we have shown that, with a constant real wage, the profit rate can fall even with a rise in the output capital ratio, for the reasons (based on rising productivity and falling values and/or prices) that Rakesh describes.
(4) But it is INSUFFICIENT to point to a "confus[ion]" on Brenner's part, and it may actually not be a "confusion" at all. The simultaneists are VERY well aware that values fall as productivity rises, and therefore that, for instance, the value of output can fall even though the mass of output rises. It is INSUFFICIENT, therefore, to challenge their arguments (or Brenner's, which is a simultaneist argument itself) by referring to falling values. They'll jump up to the blackboard (or whatever) and immediately show that you are wrong. For instance, they'll show that increasing productivity, although it lowers unit values, RAISES the profit rate instead of lowering it, because the reduction in values causes the "cheapening of the elements of constant capital." Basically, what this means is that, although the output in the numerator of the profit rate is cheaper, so are the machines, etc. in the denominator -- WHEN INPUTS AND OUTPUTS ARE VALUED SIMULTANEOUSLY.
(5) To dispose of Brenner's argument, therefore, one must not only invoke falling values. ONE MUST REPUDIATE SIMULTANEOUS VALUATION, especially the simultaneist definition of the profit rate. One must recognize that the fall in the value (or price) of output does not affect the sum of value advanced as capital prior to the fall, precisely because it has already been advanced. It is a done deal. Therefore, whereas under simultaneous valuation, falling values are of no importance (all ratios of values, such as the rate of profit, remain unchanged), under temporal valuation, the fall in the prices of outputs RELATIVE TO inputs definitely does matter. It lowers the profit rate. Put differently, what must be invoked against Brenner and other simultaneists is not falling values (or prices) per se, but falling values (or prices) of outputs *in relation to* inputs.
(6) One cannot accept this argument -- or use the falling value argument to defend Marx's law of the tendential fall in the profit rate -- and, at the same time, advocate Moseley's interpretation of Marx's value theory (as Rakesh has done), because Moseley is a simultaneist. In other words, it follows from his interpretation that riding productivity and falling values will RAISE, not lower, the profit rate.
(7) "Carchedi has corrected Pasinetti ...." This is rather like saying Copernicus corrected Ptolemy, or Einstein corrected Newton. It's no mere correction, but a wholly different "paradigm." Pasinetti is a simultaneist, while Carchedi is a temporalist. (I'm also interested in knowing what arguments of the two authors Rakesh is referring to.)
(8) "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."
I assume this refers to his reworking of Bauer's example. It SHOWS nothing. Grossmann merely ASSUMES that capital accumulation proceeds at a constant rate despite the FRP. And when the crisis comes in year 36 or whatever, the FRP has NOTHING to do with it, again by assumption. Rather, Grossmann's assumptions eventually force the capitalists to demand more investment goods than have been produced. End of story.
Let me refer you again, Rakesh, to my comments on the relationship between the FRP and capital accumulation.
Andrew ("Drewk") Kliman Home: Dept. of Social Sciences 60 W. 76th St., #4E Pace University New York, NY 10023 Pleasantville, NY 10570 (914) 773-3951 Andrew_Kliman at msn.com
"... the *practice* of philosophy is itself *theoretical.* It is the *critique* that measures the individual existence by the essence, the particular reality by the Idea." -- K.M.