Date: Mon, 25 Jul 1994 01:23:27 +0700
From: djones-AT-uclink.berkeley.edu (donna jones)
Subject: Surplus value and catastrophism


Re: the fall in the average rate of profit

1. Marx attached great, if not central, importance to it
    

2. Some more interesting texts on the law of the tendency of rate of profit
to fall. (Note this is a list of marxist texts: they draw from Marx's value
theory and the conceptual apparatus of Capital).
   a. Henryk Grossmann, 1929. "Law of Accumulation" finally translated, but
       in excessively abridged form. A work of great erudition that set off a   
       storm of controversy--up to this day. Grossmann's other writings can
       be found in Journal of Political Economy 10 & 12/43, Economic History 
       Review, vol18, Capital and Class, 1977 (here the fall in the rate of 
       profit, as well as dynamics esp. in the production process, is
connected to the dual nature of labor--what Marx called the pivot of the
critical conception).     
   b.  William J Blake, 1939. Marxian Economic Theory.  
       it has been my introduction to marxism (Capital has not been taught
in an official course here at Berkeley in my five years of graduate study);
the profit rate receives its own chapter, and is discussed in the chapter
on accumulation.  The bibiography in this book is mind-boggling.
   c. Bernice Shoul "Similarities in...Mill and...Marx" in Science and
Society of Summer 1965. Interesting comparison in terms of the profit rate.
   d.  see books by Sydney Coontz, 1957 and 1966.  The first includes a
critique of Sweezy and a discussion of declining fertility rates, sometimes
invoked as an alternative explanation to a secular decline in the profit
rate.  The second contains an explosive section on anti-classical
resolutions to crisis.  This is not catastrophism but barbarism.
    e.  All books by Paul Mattick.
To say the least, his argument about Keynesianism seems confirmed. Also see
his 1959 contribution to Science and Society; many articles that year about
the profit rate in response to Gillman's work.  Not only is Mattick's the
best, it develops the concept of capital in general--the level at which the
profit rate has a tendency to decline.  
     f. articles by David Yaffe and Mario Cogoy in the 1970's.  I know that
Howard and King criticize most of the above authors in their two volume
history of marxian economics.  But I believe that the positions are
defensible.  Cogoy's work was translated and published in the international
journal of political economy in 1987.
     g. Geoffrey Pilling, Crisis of Keynesianism.
Contains a very useful discussion of Keynes on the rate of profit.  Pilling
writes of dialectic resolutions, i.e., the taking of internal
contradictions to a higher level.  I believe that this is a key point,
which proves that Marx's law of the tendency does not resemble the secular
decline of a Hansen or Keynes. 
I really liked this book.
      h.  John Weeks, Capital and Exploitation 
      i. Guglielmo Carchedi, Frontiers of Political Economy
This is quite an introduction to  many topics in the marxian critique of
political economy.  It is an important reading, I believe, because while
rigourously defending a certain position based on the basic concepts of
capital, it allows the reader to become aware of contending positions on
many major issues.  Carcehdi criticizes many other marxian interpretations
of crisis. I found his argument on crisis convincing, as well as his
demonstration of the international implications of the capitalist price
mechanism, as a redistributor of value. His short discussion on the dollar
has proven prescient.     
      j. Fred Moseley, The falling rate of profit in the postwar US economy.
Moseley introduces a new ratio to the discussion.  He has had a very
interesting discussion with Laibman in Science and Society.
      k. Anwar Shaikh in the Imperiled Economy
      l.  there has also been some very interesting philosophical work on
the status of laws of tendency.  There was a piece by Ruben in Parkinson,
ed.; also see Kevin Brien and Daniel Little who both address what Marx was
attempting to demonstrate.
       m. Goeffrey Kay, Political Economy of the Working Class.  This is an
excellent introduction to the basic concepts of capital; it is deceptively
simple, and the discussion of the falling rate of profit brilliantly brings
out the class humanist dimensions of this law.

I am aware of how controversial these so-called fundamentalist
interpretations are.  I also believe that Grossmann's demonstration of the
importance of imperialism to a late capitalism has been unduly downplayed
by his later supporters and sympathetic critics.  For example, his
discussion of labor conditions in Africa and the third world was cut down
to a minimum in the translation (see also the 1933 Labor Conditions in
Colonial Africa by Albert Nzula).  But here is proof enough of the
catastrophism of which an advanced capitalism is capable. The current
capitalist crisis of course finds Africa in a different position--no less
catastrophic howevever. The old works of Franz Neumann and Rajani Palme
Dutt also connect the catastrophe of fascism and crisis. And from the
deportations of 500,000 Mexicanos to eviction of sharecroppers later to be
hoarded into ghettos (so as to help keep up agricultual prices), the New
Deal in this country was pretty catastrophic.

I think Trotter is correct to call attention to the relation between the
falling profit rate and speculation. There may be a connection between
feeble capital formation, class pressures on the government to take up the
slack, consequent inflationary pressures which then fuel the search for
quick speculative profits.  But what starts off the whole chain is not the
government, but  feeble capital formation due to the declining average rate
of profit. However, if the connections hold out, then proletarian politics
will have to move beyond radical Keynesianism.

 Grossmann discusses stock market and real estate speculation (as does
Blake).  Of course he doesn't delve into M-M-M'--the currency speculation
about which Harvard Business Review Editor Joel Kurtzman complains in his
recent book The Death of Money, hoping in that grand petty bourgeois
tradition that it will be possible to eliminate some of the more unsightly
features of capitalism, while keeping it intact (see Pilling for a
discussion of this). 

P.S.Paul Mattick discusses speculation in art values in Art Magazine in May
1991.



d jones