In the early part of this century a debate erupted among Russian and German economists. It was started by Rosa Luxemburg’s Accumulation of Capital, which asked the question: how can capitalism reproduce itself? It was continued by many, including Nikolai Bukharin, whose reply, seven years after her death and widely considered definitive, sums up the modern approach to this question. In essence, he asserted an equilibrium growth condition which the equations would have to satisfy in order for capitalism to exist on the basis of Marx’s equations for simple and for expanded reproduction. If one confines oneself to the constant proportions of inputs, it is however impossible to represent the most fundamental phenomenon of capitalism, namely technical change as the driving force of accumulation. The effect of technical progress is not only to increase the output achieved by a given mix of inputs but also to change the mix. The difficulty is hence that we cannot reproduce, within the confines of expansion in constant proportions, one of the most central features of the way capitalism actually accumulates and expands. This article expands and generalises the discussion by combining ‘reproduction’ with Marx’s category of relative surplus value – in essence, the investment of accumulated surplus to raise the productivity of capital. It does so in a temporal, rather than an equilibrium framework and hence does not presuppose a seamless and costless transition from one technology to another, but asks to the contrary how the actual transition takes place. It provides a detailed numerical example which combines technical change with growth, applying the toolbox of analytical constructs which Marx constructed in the early 1860s to study technical change – relative surplus value, the release and tie-up of capital, and moral depreciation – and arrive at a fuller and more general statement of the question.
