Doug,
I don't have an English version of the Grundrisse, so I don't know what the page count would be for the Vintage edition, but Michael is referring to the following passage, which crisis-mongers in Germany (above all, Robert Kurz and the Krisis group) are always citing:
"As soon as labour in the direct form has ceased to be the great well-spring of wealth, labour time ceases and must cease to be its measure, and hence exchange value [must cease to be the measure] of use value. The surplus labour of the mass has ceased to be the condition for the development of general wealth, just as the non-labour of the few, for the development of the general powers of the human head. With that, production based on exchange value breaks down" [...] "Capital itself is the moving contradiction, [in] that it presses to reduce labour time to a minimum, while it posits labour time, on the other side, as sole measure and source of wealth. Hence it diminishes labour time in the necessary form so as to increase it in the superfluous form"
Alert readers of _Capital_ will note that Marx had already resolved this seeming contradiction by the time he wrote _Capital_. Namely, it is the basis of relative surplus value.