Abstract
Starting with Quesnay’s Tableau Économique and Marx’s schemes of simple reproduction, CPE analysis shows that the system is not only capable of reproducing itself on the same scale but also is endowed with a relentless drive for expansion and steady growth, according to Marx’s schemes of expanded reproduction. Both simple and (steady) expanded reproduction are only hypothetical because, in reality, economic growth is periodically punctuated by long-lasting slowdowns in economic activity. Therefore, economic growth and crises are inherent salient features of the modus operandi of the capitalist system. In this chapter, the schemes of reproduction are cast in terms of input-output tables, and estimates of labour values and their monetary expression (direct prices), alongside prices of production, are obtained. These estimates are preparatory before we proceed to those derived using input-output data from a number of actual economies.
I agree with Morishima (and I think, with Joan Robinson and Nicholas Kaldor) that Marx’s volume II models of simple and extended reproduction have in them the important germ of general equilibrium, static and dynamic. If Schumpeter reckoned Quesnay, by virtue of his Tableau Économique, among the four greatest economists of all time, Marx’s advance on Quesnay’s Tableau should win him a place inside the Pantheon.
Paul Samuelson (1974, Vol. 4)
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Notes
- 1.
Details on the estimations of equilibrium prices and rate of profit can be found in the sections below as well as in Chap. 3.
- 2.
- 3.
Milliard is the physiocratic monetary unit.
- 4.
Hence, we assume that the analysis is carried out in terms of direct prices.
- 5.
The starting point of analysis in the schemes of reproduction is not relevant to the final outcome; nevertheless, the priority to a specific department of production has tremendous social implications as it happened in the former Soviet Union and other Eastern European countries. Even the Marshall Plan in 1947, in one way or another, was influenced by developments taking place in the Eastern European countries. We may speculate that the priority of the Marshall Plan to the industrialization of the Western European economies was inspired, to some extent, by the idea that Department I (investment goods) is more decisive for the rapid economic development than Department II (agriculture and consumer goods sectors). Similarly, in a Kaldorian framework, manufacturing, especially the investment goods producing industries (identified with Department I) is considered the ‘engine’ of economic growth.
- 6.
The Von Neumann’s (1945) growth model is based on this assumption.
- 7.
Tsuru (1942) describes diagrammatically the conditions of expanded reproduction.
- 8.
See Tsaliki (2009).
- 9.
- 10.
The case of expanded reproduction in the face of prices of production (prices which incorporate a general rate of profit) is more complex but possible, as we show at the end of this chapter.
- 11.
As we have pointed out in the presentation of simple reproduction, the fact that the analysis begins with Department I does not imply its superiority compared to Department II. Marx begins his analysis from Department I mainly for formal reasons and not that Department I is more important than Department II.
- 12.
The value composition of capital is written as C/(C + V) instead of C/V in order to follow the usual presentation. A more detailed discussion of the various (value, materialized, technical and organic) compositions of capital is postponed until Chap. 8. It is interesting to note that although the rate of surplus-value is the same between the departments, their rates of profit are quite different. In particular Department I’s rate of profit is 20%, while Department II’s rate of profit is 33%, clearly a case of disequilibrium inducing adjustments which, however, can be dealt with the introduction of competition between capitals.
- 13.
Hence, we follow the procedure described by Marx in Capital II, p. 510, scheme B.
- 14.
For instance, Marx notes that his analysis is conducted in value terms (direct price) pointing out that “the fact that prices [production] diverge from values cannot display any influence on the movements of social capital” (Capital II, p. 393).
- 15.
Moreover, Luxemburg underlined that the operation of economies should not be left to the blind forces of supply and demand; but society should display the necessary political will to intervene in order to change fundamentally the system at its early stage, that is, well before the system enters the ‘stage of barbarism’.
- 16.
These authors argued that since the reality of capitalism is the balanced growth, then only a disproportionality crisis is possible. Hence, a well-planned capitalist economy may overcome the problems resulted and attain the right proportions for a smooth and uninterrupted growth.
- 17.
The same analysis can be applied to Department II.
- 18.
In Marx’s analysis workers consume all of their income, while capitalists consume part of the surplus-value they receive and save or, what is the same thing, invest the remaining according to their propensity to save.
- 19.
Today, it is recognized that Wassily Leontief (1906–1999) is the main representative of this field of economic analysis.
- 20.
- 21.
We recall that the rent in physiocrats has the same status as the surplus-value in Marx. The constituent components of rent are the profit and interest exactly as in Marx’s concept of surplus-value which is broader for it also contains rents.
- 22.
More on possibilities of fixing the scale of relative prices or output proportions are detailed in Chap. 4.
- 23.
More on the implications of such a hypothetical case can be found in Chap. 3.
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Tsoulfidis, L., Tsaliki, P. (2019). Circular Flow of Capital and Social Reproduction. In: Classical Political Economics and Modern Capitalism. Springer, Cham. https://doi.org/10.1007/978-3-030-17967-0_2
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