Date: Fri, 26 Aug 1994 14:58:59 +0700 From: djones-AT-uclink.berkeley.edu (donna jones) Subject: Re: schumpeter help Doug Henwood posted the following: > If an emphasis on speculative investment leads to under-investment in >real capital goods, the source of surplus value will be starved, and the >physical, social, and economic reproduction of society will be threatened. >From a marxian pt of view, I believe that Doug has mistaken symptoms for causes (see my previous post on Keynes and psychology). I believe the marxian argument would follow thusly 1. The law of the tendency for profit rates to fall. "As Mattick showe in numerous essays, most Marxist theories...share with bourgeois economics a focus on the circulation of commodities and the realization of surplus value. Marx, in contrast, focuses on the production of surplus value, to argue that the very process by exploitation is enhanced leads over time to a decline in the rate of profit over total capital." (Quoted in Robt A Gorman, 1985, p.288) In his last book, Carchedi has rigorously pursued the argument; or at least as rigorously as possible without much math. The footnotes indicate supporting articles, including Moseley. 2. The effect of tendential fall on production and speculation "...if there is an underlying bias toward a reduction of the rate of profit, what are its effects on a society which is conditioned socially for its increase? It certainly checks the formation of new capitals. It threatens the growth of capitalist production by its very excess of productive equipment. It brings about overproduction in the endeavor of each capitalist to increase his means of profit by selling as much as he can. It promotes speculation, for as profits become more difficult to make in industry, the defected moeny and passion for gain must take another outlet. Since the money cannot be made out of labor, the capitalists strive to outguess each other on the stock exchange and in real estate and in commodity futures. They try to plunder each other, for that is all there is left to do. The frequency of crises is greater, their depth greater, surplus capital abounds, surplus workers are enormous, until a painful rectification occurs, but one more unstable at the base. "Since the tendential fall in the rate of profit does not diminish the rate of exploitation of workers, nor necessarily diminish the number of exploited (it may, but it does not always succeed in doing so), capital seeks to counter that tendency by employing cheaper labor in the noncapitalist lands, or in the backward areas; it is thus able to increase the rate and mass of profits for several years at at time." William J Blake, Marxian Economic Theory, 1939, p.308 This argument had been advanced ten years earlier by Henryk Grossmann (1929), based on his study of the section Surplus Capital and Surplus People in Vol III. 3. What are the implications of understanding speculation both in subjectivist terms and as the independent variable? Not good. It seems to me that it transmutes the basic conflict in production relations between workers and industrial capital (which even the millionare capitalist Ricardo recognized beginning with his revision of his chapter On Machinery) into a false conflict between a putatively unified productive unit of productive capitalists and productive workers (that would be a surprise to the IWW) against only a growing fragment of "a formerly great class"--the speculators or previously autonomous banking capital. Both Franz Neumann and Sydney Coontz have traced such a politics back to Proudhon and fascism--false splits within the capitalist class. Such a critique also figures prominently in Rosa Luxemburg's critique of revisionism. Moreover, we know whose capital it is that is flowing into speculation, at least profitably--the surplus capital of industrial conglomerations. The struggle remains the expropriation of the owners and controllers of the means of production, not utopian policy attempts to make capital take on real investments. For with whatever regulation that will put on speculative capital, such attempts will always involve greater domestication of the working class--the very precondition for continued accumulation remains a higher rate of surplus value (even if this is possible with a stable real wage). In Gramscian words, industrial capital will remain hegemonic within a so-called productive bloc to "make America work again" or any other such petty bourgeois ideal. marxism always comes down to the revolutionary class consciousness of the industrial working class. The alternative to that has historically been genocidal scapegoating. Bibliograpy Henryk Grossmann, 1929. The Law of Accumulation Paul Mattick. all books Guglielmo Carchedi. 1991. Frontiers of Political Economy Sydney Coontz, 1966. Productive Labor and Effective Demand William J Blake, 1939. marxian economic theory Franz Neumann.1942. Behemoth Fred Moseley. 1992. The falling rate of profit in the US Rosa Luxemburg. Anti-critique d jones ------------------
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