Date: Thu, 26 Jun 1997 02:07:20 -0800
From: djones-AT-uclink.berkeley.edu (rakesh bhandari)
Subject: M-I: Corrected: OCC/globalization


I have tried to write this more clearly. Sorry for how garbled the first
attempt was--I shouldn't have rushed it off. Looking forward to any and all
challenges.  All the best, Rakesh

Later we could examine the limits of capital-saving innovations as a
countertendency to falling profitability (there is a superb discussion of
this problem in both Alexander Gourvitch's Survey of Economic Theory on
Technological Change and Employment  and Jim Miller's e-mail paper ) .

 Generalizing from the example of information technology, some bourgeois
optimists have wildly exaggerated the extent of capital-savings
innovations; for example, the production of microprocessors, no matter how
much their declining unit values and increasing power have contributed to
the cheapening of
information technology,  has itself required ever more capital-intensive,
larger scale plants (see numbers quoted from Wm Greider, which I posted
some time
ago).

All in all,  globalization can be understood as a reaction to
upward pressure on the OCC and a resulting shortage of surplus value. Doug
takes globalization to be evidence of capital's strength; I disagree.

 The most basic reason for the globalization of foreign direct investment
(e.g., Japan's auto transplants in the US) is the attempt to escape the
non-tariff trade barriers employed by the respective stagnant OECD
economies (e.g. voluntary export restraints, trigger price mechanisms, and
targeted trade practices--see discussion in Nicolas Spulber, The American
Economy, p. 175). Most FDI remains concentrated in the OECD, and has been
undertaken for two reasons: to circumvent or preempt such hidden, as well
as open, trade barriers or to form joint ventures so as to mobilize the
necessary capital for research, development and construction of ever more
capital intensive plant.

 FDI, undertaken for these reasons, suggests that we are in the  midst of a
global crisis of the shortage of surplus value. First, stagnation, for
which overt and covert protectionism is an attempted remedy which  has
paradoxically called forth the globalization of investment, must itself be
explained: its most basic cause is in the disproportionality in all the
imperialist countries between the mass of surplus value actually produced
and the surplus value required for rapid accumulation (hence slow growth
and in turn low productivity). There may seem to be no such shortage of
surplus value  because of a current bull market and high  profit rate (the
appearance to which Doug is holding fast) though this may well be the
result  of the reorganization of the existing capital structure through
centralization (itself, as Mattick pointed, a response to falling
profitability) and the explosion of fictitious capital (perhaps through the
simple mechanism of the flow of idle capital into the stock market?).

 Global joint ventures also suggest the growing insufficiency of surplus
value in the hands of even the most concentrated national industries, and
thus the need to share ever increasing costs with foreign firms (for
evidence on global joint ventures, see Nathan Rosenberg and David Mowery,
Technology and the Pursuit of Economic Growth).

And of course NIKE is only the most obvious example for Americans of the
desperate attempt to raise the rate of surplus value through "outsourcing".
But it is little commented on that because real improvements in the real
wage and employment security have not been substantial, women have
exercised their agency and sometimes refused such super-exploitation (see
Diane Elson, ed. Male Bias in Development).

While Paul Krugman, the shock-therapist Jeffrey Sachs and running dog Andy
Young prettify the global sweat shops as the first step in the first
worldization of the third world (there are many reasons why this will not
happen: the stagnant OECD can only absorb the output of so many sweatshop
nations; these sweatshops don't require the same kind of supplementary
domestic supplier investments and services as before; the astronomical rate
of exploitation required given how high the OCC is will increasingly
militate against substantial wage increases and thus the growth of a
domestic consumer market which could stimulate further investment;
sweatshops tend to outcompete technically primitive domestic production
without bringing forth sufficient internal complementary accumulation to
absorb the resulting unemployment; substantial wage increases and the
potential exhaustion of the labor force can be circumvented by shifting
elsewhere),  these sweatshops are in truth one of the last desperate
attempts to pump out ever more surplus value in  a worldwide capitalist
system, now on the brink of breakdown due to upward pressure on the organic
composition of capital--a breakdown which will leave in its wake global
chaos, unless a new society is consciously fought for.

Rakesh







     --- from list marxism-international-AT-lists.village.virginia.edu ---