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2 - The limit to capitalist growth

Published online by Cambridge University Press:  05 November 2011

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Summary

It would be boring to the point of pain were we to replicate Marx's simple and expanded capitalist reproduction schemata from Volume II of Capital. Only a general outline will be given, along with the underlying assumptions of Marx's models, many of them implicit.

In Chapter XX of Volume II, Marx used a simple reproduction schema consisting of two Departments. Department I's output was restricted to the production of producers' goods (raw materials and fixed capital), and Department II specialized exclusively in the production of the means of subsistence (consumers' goods). Marx assumed that: (1) ‘normal’ prices prevail, that is, the market prices of goods reflect the amounts of labor value embodied in them, which in turn determine relative prices or rates of exchange embodying equivalent amounts of labor time; (2) real wages and real surplus value are constant on a per capita basis; (3) the stock of capital remains unchanged from one production time period to another, which implies that net investment is zero, meaning that there is no net addition to the existing stock of capital – gross investment in fixed capital is therefore equal to depreciation or the amount of wear and tear of the existing capital stock; and (4) the capital output ratio (c/o), the organic composition of capital (c/v), and the rate of surplus value (s/v) are the same for both Departments.

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Publisher: Cambridge University Press
Print publication year: 1979

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