|SWEEZY TOO HAS an uc theory under special circumstances. He begins
with the assumption that most sv is accumulated; therefore capitalists'
consumption (k) declines relative to surplus value. And of the
sv accumulated, a rising percentage is invested, that is goes to
additional c rather than additional v. The growth in the means of
production implies a growth in the quantity of consumption goods but
consumption power (k+ v) lags relative to productive power. However,
Sweezy too does not have a simple uc theory: he underlines that special
circumstances can keep the tendency towards uc (manifested
either as a crisis of overproduction or stagnation) latent; uc can be
counteracted by new industries, population growth, and faulty investments.
Moreover, he grants that at a logical level the Keynesian policies
of debt-financed spending and countercyclical tax breaks can lift the
economy out of the crisis or stagnation caused by the tendency towards uc.
He frets that he has become a theoretical revisionist.
More orthodox Marxists have thought that if the crisis was understood
not as a consequence of the tendency towards uc but as a result of
the shortage of sv to sustain continuing accumulation, then
it would be clear that capitalism cannot do away with protracted crises
and that Keynesian policies can at best temporarily attenuate them.
This is the position that Fred is stating, and it derives, as
is well known, from Grossman's and Matick Sr's work.
What I am suggesting is that even if the crisis is caused by a shortage
of surplus value, it's not clear to me that an inflationary debt-financed
Keynesian program of government spending could not reduce
the severity of crisis and, in effect, buy the capitalist economy time
to work down its excess capacity, preparing the way for new composition-
reducing investments and perhaps even a higher rate of exploitation.
But the counterargument here is that crisis is necessary to solve the
problem that in the course of accumulation costs came to eat up revenue
and thus depress profitability. The crisis was not brought
about underconsumption but a shortage of surplus value. Only through
a crisis can firms acquire assets (and labor) at the low prices
needed to make sure that as accumulation ramps up again that
costs will be contained this time relative to revenue.
Crisis can be put off, but the consequence is that firms must then later
achieve even a higher rate of profitability so as to cover the costs
of the government debt that was meant to buy time.