17 
In the simple conditions of the circuit of income and cost 
assumed here the surplus will thus depend on the spending 
of capitalists on investment and on their own consumtion. 
The variables C etc could also be expressed as percentages 
of the capital stock so that they would indicated the 
growth rate of capital, and the capital structure 
( wages or output in p.c. of capital i.e. the reciprocal 
of the organic composition of capital ) . 
So everything hinges onthe determination of investment. 
The analysis is open ended because it does not tell us how 
capacity and its utilisation will be affect and how in 
consequence the profitability of capital will develop in 
future. This led Rosa Luxemburg to the opinion that there is 
nothing in the scheme itself which could explain how 
extended reproduction should come about.She saw only a 
circular argument in the idea that investment could 
drive and keep going the whole process. Where would the 
capitalist find the markets for the expanded output? 
( It may be remarked here incidentally htat for Marx 
his belief in a growing capital-output ratio might have 
been, in principle, an answer to the question. The capitalist 
would invest in ever more capital-intensive techniques. 
This may indeed be anexplanation why Marx was not 
as much worried about the question of realisation as would 
seem to us now natural ). 
Rosa Luxemburgs answer to the question raised by her was 
that the surplus could only be realised by selling the excess 
output in foreign markets or by turning it into weapons to be 
used up in wars. These outlets were no doubt of great 
importance in the historical development. But Kalecki had