>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.
>
>***************
No. Due to an insufficiency of surplus value vis a vis accumulation requirements, it's not capitalized as additional constant and variable capital. The workers are impoverished and their consumption restricted as a result. Capital is idled as well. What's the cause of this absurd juxtaposition of idle people and idle capital? Underconsumption? No. This will not allow you to understand what Marx underlines somewhere in Capital 2: Accumulation resumes with the consumption share falling even further vis a vis accumulated capital (Keynes himself clearly recognized this though Joan Robinson denied it)!
Inexplicable on the basis of an underconsumption theory which can't explain as well the alternation between prosperity and depression since according to that theory it's incomprehensible why capitalism is not haunted perpetually by serious realization difficulties as workers are *always* paid less than the value of their product (I didn't think a Black Bolshevik like you would forget Lenin's critique of the populists!)
Under Marx's theory which Grossmann and Mattick best understood, realization difficulties *result* from a disproportionality that develops in the course of accumulation between the rate of exploitation and the value composition of capital.
It has taken protracted depressions and wars to achieve the forcible readjustments that are needed for accumulation to be undertaken. After WWII, this could no longer be tolerated. That accounts for the acceptance of the mixed economy that was bound to go up in stagflationary ashes. And not just because capitalists and rentiers in particular would find some sophist economists to talk the government down from full employment. Really Kalecki gives way too much credit to Friedman and his ilk. The mixed economy or govt ordered production was bound to come to crisis because it represented in value terms the same destruction of capital that we usually associate with depressions. The only difference was that this destruction showed up as production in the interim while leaving the public debt on which the Masstrict covergence criteria (to take one example) are focused as its legacy.
>
>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.
>
>***************
Again Charles this cannot make sense of the crisis cycle since workers are always paid less than the value of their product. Where does the effective demand come from in boom times then? And it can't explain how crises are actually overcome.
Yours, Rakesh