This paper was presented to the 1995 conference of the Eastern Economic Association as part of the second mini-conference of the International Working Group on Value Theory (IWGVT), the main forum within which the Temporal Single System Interpretation (TSSI) of Marx’s value theory emerged.
The paper considers the way in which technical change, leading to rising labour productivity and hence cheapening of the elements of capital, interacts with expanded accumulation. It thus overcomes a critical theoretical weakness in the historical debates over the accumulation of capital between Luxemburg, Bukharin, Bauer, Grossman and others, in which all writers except perhaps Grossman maintain the assumption which Marx applied in his Volume II of expanded reproduction, that growth takes place in such a way that the proportions in which the inputs enter production (including labour) remains constant. This amounts in effect to supposing that growth may only take place through the expansion of absolute surplus value.
This special case has been widely studied outside of Marx’s theory: for example it is assumed in von Neumann’s well-known treatment of growth along a so-called ‘von Neumann ray’, and is the explicit or implicit assumption underlying most of the ‘linear production’ models discussed by Pasinetti and other members of the surplus school. Nevertheless, it is implausible that Marx – who never finished his work on expanded reproduction – intended that the accumulation process should be studied without regard to technical change, that is to say, relative surplus value.
The article shows, with extended numerical illustrations, how the process of accumulation can be studied in a general way without the assumption of constant proportions. It is thus an important progenitor of my 2020 paper on the general theory of money, value and the state, and the computer simulation of 1992 that demonstrated the practical feasibility of this way of conceiving of the course of capitalist development.