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