File spoon-archives/marxism-thaxis.archive/marxism-thaxis_1998/marxism-thaxis.9801, message 179


Date: Sun, 11 Jan 1998 00:48:22 +0100
From: Hugh Rodwell <m-14970-AT-mailbox.swipnet.se>
Subject: M-TH: Re:  Mandel's critique of Mattick


Jurri quotes Mandel against Mattick:

>"Yet it is tempting to see the tendency of the average rate of profit to
>fall as Marx's main contribution to an explanation of crises of
>overproduction... Is this correct ? etc.

Now I don't know Mattick well enough to be certain in my reaction here,
more's the pity, because the quotes I've seen from his stuff seem among the
closest to Marx I've read. I think Mandel is equivocating in his critique,
however, by claiming that the falling rate of profit is a simplistic causal
explanation for crises, involving insufficient surplus-value production.

Now it's obvious to anyone who's read Capital that the overproduction
involved in overproduction crises is the overproduction of capital, not of
goods. So Mattick, who seems (as I said, I can't be wholly sure of this
till I've read him) to be a good close reader of Marx, can't have missed
this. So what could he have meant by saying:

> "The accumulation of capital thus does
>not depend upon the realisation of surplus-value, but the realisation of
>surplus-value depends on the accumulation of capital" and p. 115: "When
>surplus-value is not sufficient to continue the accumulation process in a
>profitable way, it can also not be rrealised through accumulation; it
>becomes unrealised surplus-value or over-production".

This seems to hinge on what is meant by unrealized surplus value. The only
sensible interpretation of this would seem to be that it's surplus value
that can't be invested at a sufficient profit, ie that will not realize a
sufficient profit in the accumulation process, and hence is surplus to the
capacity of the system to absorb it and churn out the accustomed rate of
profit.

Now Mattick doesn't express himself clearly enough here, and Mandel takes
the opportunity to obfuscate. For instance, I would need a lot of argument
to be persuaded that the following statement by Mandel is correct as an
interpretation of what Mattick says:

>First over-accumulation is posited [by Mattick] in an absolute way: there
>is not
>enough surplus-value to valorise all accumulated capital.

No Marxist worth their salt would draw this conclusion from what Marx
argues about the overproduction of capital. Capital is valorized by the
realized sale of commodities at normal price and wage levels, from this
comes surplus value which is divvied up among the various capitals
proportionately to their invested capital (and their monopoly grip on
various much-demanded products or services, etc). The previously
accumulated capital is thus valorized while all is running smoothly. But if
too much surplus value is produced to be *accumulated* at the necessary
rate of profit, things start going wrong. So I think Mattick probably meant
something like "there is not enough surplus value to accumulate further on
the basis of the previously accumulated capital at the rate of profit
hitherto considered kosher". Here we must remember that capital must expand
or die, even if (as in the imperialist period) much of its expansion is at
the cost of cannibalizing other capitals -- imperialist cannibalism.

Then Mandel claims Mattick shifts his ground to a relative position: "there
is still additional surplus-value, but it does not become accumulated,
because it would give additional capital zero percent profit."

I think Mandel is probably the shifty one here...

Mandel constructs an easier target to attack than Mattick's text seems to
warrant. What use does he make of this opportunity he prepares for himself?
He emphasized the fall of market prices and glut conditions -- that is, he
focuses on the overproduction of goods rather than capital.

Then he starts making analogies:

>The explanations main
>weakness is its concentration on the sphere of production alone, which, in
>the last analysis, is founded on a confusion about the very nature of the
>commodity and of commodity production. In the same way as Jean Baptiste
>Say's famous loi des debouches, it assumes tacitly that there is no
>specific problem of value realisation, only one of surplus-value
>production.  This in turn assumes that what we have under capitalism is
>production for barter, not production for sale; and that somehow, at least
>at a macro-economic level, all value produced is automatically realised.

This all varies at the various stages of the cycle. In the period preceding
a slump, ie the peak of the boom, there are no apparent limits to either
production or realization, especially giving the miraculous powers of
credit. Every capitalist produces like mad, and buys and sells like mad on
credit, and there's no end to the fun. Except when the credit is called in
and Old Nick stops playing his fiddle, there's a mad scramble like musical
chairs, and the ones without seats get thrown down the pit. So the crisis
hits precisely at a time when there have in fact been no apparent problems
of realization or compounded accumulation. I don't think Mandel's objection
here is accurate.

The quote from Marx about the interaction of use value and exchange value
at the level of aggregate social production is relevant to a lot of things,
but pretty useless to use against Mattick (as I speculatively understand
him -- correct me with quotes if you think I'm wrong).

There's a reflection on the role of wages in all this, in which Mandel
again repeats the view that Mattick (etc) hold a view that the falling rate
of profit argument is based on the production of too little surplus value.
He says that this would encourage capitalists to seek to increase surplus
value by cutting real wages. But I think he's missed the dialectics of the
overproduction of capital -- even if there is a glut of capital such that
it can't be invested profitably enough in the existing setup, there will
never be enough capital to allow the capitalists to devalue all their
existing capital and just invest in some huge new superplant that outdoes
all their competitors at once. Too much and too little at the same time, in
other words. Anyhow, when did employers ever need excuses to cut wages?

Mandel finishes off:

>This critique of the mechanical and
>one-sided explanation of crises of overproduction by the falling rate of
>profit alone can be extended, in a more general way, into a critique of any
>mono-causal explanation of crises.

Perhaps, but I think Mandel's using it to escape from the implications of
the central role of the falling rate of profit for capitalist behaviour and
the tasks it imposes on the working class answer. His apparent answer here
is mere economism -- fight for better wages. That's not enough.


>In the framework of Marxist economic
>theory, crises of overproduction are simultaneously crises of
>overaccumulation of capital, and crises of overproduction of commodities.
>The former can not be explained without pointing to the latter; the latter
>cannot be understood without referring to the former.

They surely coexist, but they are not of equal significance, as Marx is at
pains to point out. It's the behaviour of the value in the economy that
counts, not the behaviour of the commodities, except in so far as these are
a necessary bearer for the value in question (which means, as I mentioned
above, and Rosdolsky deals with so clearly in The Making of Capital, that
there can also be big problems as a result of use value contradictions at
the aggregate level of social production).

>This means the
>crisis can be overcome only if there occurs simultaneously a rise in the
>rate of profit and an expansion of the market, a fact which disarms both
>the employers' and the reformists' arguments."

I can't see how this disarms anybody except the revolutionary working class.

It's an impossibly optimistic and anodyne account. What really happens is
that a rise in the rate of profit comes with the massive devaluation of all
previous capital, both material and moral (as I mentioned in an earlier
post -- war, bankruptcy, accelerated obsolescence). Expansion of the market
also appears dialectically if the catastrophically contracted market of the
crisis period merely starts moving again.

What's happening today is that tensions are growing very fast because the
hoped for expansion of markets with the imperialist capture of the
ex-Soviet bloc (thanks to the capitulation of the Soviet bureaucracy) and
the class-collaborationist policies of the Chinese Stalinists has not
materialized.

Time for cannibalization. But who will eat who, and in what conditions?

Cheers,

Hugh







There can be no doubt about the fact
>that, within the framework of the industrial cycle, the ups and downs of
>the rate of profit are closely correlated with the ups and downs of
>production.  But this statement, in and of itself, is not sufficient to
>provide a causal explanation of the crisis.  It can be (and has been)
>misunderstood in the mechanical sense that crises are 'caused' by
>insufficient surplus-value production... [Thus Paul Mattick writes in]
>Krisen und Krisentheorien, p. 111: "The accumulation of capital thus does
>not depend upon the realisation of surplus-value, but the realisation of
>surplus-value depends on the accumulation of capital" and p. 115: "When
>surplus-value is not sufficient to continue the accumulation process in a
>profitable way, it can also not be rrealised through accumulation; it
>becomes unrealised surplus-value or over-production".  First
>over-accumulation is posited [by Mattick] in an absolute way: there is not
>enough surplus-value to valorise all accumulated capital.  Then the
>argument shifts to a relative one: there is still additional surplus-value,
>but it does not become accumulated, because it would give additional
>capital zero percent profit.  But how is this to be seen independently of
>market prices of the additionally produced commodities ? Does a fall of
>market prices leading to zero percent profit not reflect a previously
>existing glut, i.e. overproduction besides the over-accumulation of capital
>? [...] In this vulgar sense, explanation of overproduction crises by the
>decline of the rate of profit alone is both wrong and dangerous.  It is
>wrong, because it confuses the impossibility of valorising additionally
>accumulated capital with the impossibility of valorising all previously
>invested capital; because it identifies fluctuations in investment
>decisions of capitalist firms with the flcutuations of current
>surplus-value production.  The former, however, may continue to grow when
>the latter is already declining, and vice versa. The explanations main
>weakness is its concentration on the sphere of production alone, which, in
>the last analysis, is founded on a confusion about the very nature of the
>commodity and of commodity production. In the same way as Jean Baptiste
>Say's famous loi des debouches, it assumes tacitly that there is no
>specific problem of value realisation, only one of surplus-value
>production.  This in turn assumes that what we have under capitalism is
>production for barter, not production for sale; and that somehow, at least
>at a macro-economic level, all value produced is automatically realised.
>Marx himself explicitly refuted any such assumption. "[...] The conditions
>for immediate exploitation and for the realisation of that exploitation are
>not identical.  Not only are they seperate in time and space, they are also
>separate in theory.  The former is restricted only by the society's
>productive forces, the latter by the proportionality between the different
>branches of production, and by the society's power of consumption. And this
>is determined neither by the absolute power of production nor by the
>absolute power of consumption, but rather by the power of consumption
>within a given framework of anatagonistic relations of distribution, which
>reduce the consumption of the vast majority of society to a minimum level,
>only capable of varying within more or less narrow limits. [...]"  .
>Furthermore, this vulgar theory of crises as caused by 'insufficient
>production of surplus-value' is obviously dangerous, from the point of view
>of defending the working class against the capitalist onslaught which
>always coincides with a crisis of overproduction. For the conclusion which
>might be drawn from such an explanation is that the crisis could be
>overcome and employment rise again, if only real wages were to be cut and
>surplus-value (profits) thereby automatically increased. [...] Many extreme
>proponents of the decline-in-the-rate-of-profit explanation for capitalist
>crisis will answer indignantly that their analysis contains a built-in
>reply to employers' arguments: the decline of the rate of profit is a
>function of the rising organic composition of capital, which leads to
>overaccumulation, and not of a decline in the rate of surplus-value [...].
>They forget, however, that the rate of profit is a function both of the
>organic composition of capital and of the rate of surplus-value; that,
>except in the case of starvation wages... a cut in real wages always
>implies a rise in surplus-value produced, hence a higher rate of profit
>than existed before the cut.   This critique of the mechanical and
>one-sided explanation of crises of overproduction by the falling rate of
>profit alone can be extended, in a more general way, into a critique of any
>mono-causal explanation of crises.  In the framework of Marxist economic
>theory, crises of overproduction are simultaneously crises of
>overaccumulation of capital, and crises of overproduction of commodities.
>The former can not be explained without pointing to the latter; the latter
>cannot be understood without referring to the former.  This means the
>crisis can be overcome only if there occurs simultaneously a rise in the
>rate of profit and an expansion of the market, a fact which disarms both
>the employers' and the reformists' arguments."
>
>Source: E. Mandel, "Introduction" in K. Marx, Capital Volume 3, Penguin
>ed., p. 38-42.
>
>
>
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