Conor Lyons's Blog

I does not necessarily lead to an increase…

I does not necessarily lead to an increase in the price of consumer goods.
The growth in the sum of will only lead to an increase in the price of consumer goods if the sum of grows too.
The possibility of this latter sum of value lagging behind the growth of the volume of production in Dept.
I occurs if there is an increase in the organic composition of capital at a rate which is faster than the rate of growth of the volume of production.
However, if the crisis has been particularly sharp and the depression of sufficient duration then it is more likely that the total of will increase sufficiently to push up the price of consumer goods. if the impulse from Dept.
I is sufficiently strong then there will develop a Period of prosperity.
In such a period the sum of money wages will increase and so will the demand for labour-power.
This will provide a better climate for the workers to push for higher wage rates.
None the less and the decisive reason for the increase in the price of consumer goods is the rapid growth in the production of fixed capital goods.
Thus the mere replacement of fixed capital can lead to an increase in the overall level of economic activity.
And it follows from this that an acceleration of this replacement will have the same effect as if there had been an increase in fixed capital.
We now have an outline of the reasons for an upswing in economic activity and for an increase in the rate of surplus-value.
But the faster the upswing and the more bunched replacements will be and the sooner a new crisis will loom on the horizon.
It is clear that the bunched replacement of fixed capital requires a considerable growth in the rate of the production of fixed assets, but after a few years the need for such replacement will decline rapidly.
This means that for the boom to continue it would be necessary to undertake capacity increasing investment and that is, increase the stock of fixed capital. It is at this point that the system is heading for a new crisis.
The first possibility is that such an increase in productive capacity is not undertaken. Perhaps the capitalists in Dept.
II are satisfied with the level of profits they are currently obtaining and do not therefore increase production. Obviously, because of the previous excessive growth in the sectors of Dept.

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