>>> Rakesh Bhandari <bhandari at Princeton.EDU> 02/28/00 05:41PM >>>
Charles, you and I are agreed that Marx is here arguing that the social capacity for consumption is not simply people's capacity to consume but this capacity as governed and necessarily limited by the requirements of surplus value production. But if Charles included the whole passage, as well as interpreting it in the context of the argument as a whole in Capital 3, then I think it's clear the specific limit to consumption Marx holds to be explanatorily fundamental to a crisis of general overproduction (the very possibility of which was denied by classical economics) is located in surplus value production itself. This does not mean that underconsumption is any less real than overproduction (indeed they are flip sides of each other); it is to say that the contradiction in production is explanatorily fundamental.
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CB: My interpretation of Marx's use of the term the phrase "The ultimate reason for all real crises always remains the poverty and restricted consumption of the masses .." in an argument in volume three that is, as you say on the role of the FROP, is that he is describing a contradiction, and he pulls us all of the way back to the other aspect with "the ultimate reason".
Also, underconsumption is rooted in PRODUCTION. Why ? It is the fact that workers in PRODUCTION are not paid the full value of what they produce that there is not effective demand for all that is produced. So, underconsumption is directly rooted in production.
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Since the appropriated surplus value to allow for expanded reproduction is short--that is, the greatest quantity of surplus value that can possibly be extorted from the diminished working class is no longer sufficient to augment the value of the accumulated capital-- workers won't be hired and the already produced commodity output won't be fully realized. No doubt at all this will be due to the poverty and the restricted consumption of the workers and especially the unemployed, but it is the general crisis due to an underproduction of surplus value that expresses itself as a problem of the realization of surplus value and insufficient buying power of the working population. This then helps to understand that crises are actually overcome with the social capacity for consumption actually declining relative to the accumulated capital!
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CB: Yes, but it is just as legitimate to call the workers' inability to buy everything as a fundamental explanation , because it is based upon Marx's most fundamental analysis of commodity production in Vol. l. The inability of the workers to buy all the commodities they produce follows directly from exploitation, i.e. workers only being paid for a fraction of the values they produce. So, I think underconsumption is a fundamental explanation based in Vol. 1 where the actual theory of surplus value is laid out. In other words, underconsumption follows directly from the nature of surplus value.
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Moreover, this is not to say that in the real world due to disproportionalities and partial overproductions recurrent realization problems cannot spill over (especially in a highly leveraged economy) to a general crisis, though such crises should be solvable through a redistribution of capital. For this reason Marx consciously and explicitly abstracts from all difficulties with realization in order to demonstrate a limit capital meets in surplus value production itself.
As Mattick noted (and I have been draw here from his Economic Crisis and Crisis Theory) "If the accumulation process can be depicted in abstraction from the circulation process, the process of reproduction can also be traced without considering hte realizatin problems it encounters in reality in order to explain the meaning of the circuit of capital. One can find this mode of procedure reasonable or not; at any rate, Marx believed that although his absract model of the capitalist process of circulation did not correspond to reality in some ways, it could nevertheless contribute to a better understanding of reality." p.94
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CB: See my statement above for an alternative as to what "Marx believed"
CB