Date: Mon, 30 Jan 1995 11:15:59 -0500 From: Doug Henwood <dhenwood-AT-panix.com> Subject: Re: Unequal Exchange At 8:14 PM 1/29/95, jones/bhandari cited Mattick to respond to my "Crisis? What Crisis?" post: <quote> But as the accumulation of capital is also a concentration processs and thus plays larger profits into fewer hands, the accumulating capitals were not for some time aware of the decline in profits. And because the centralization process can raise the rate of profit even in the absence of capital concentration, simply by the reorganization and different utilization of the existing capital, a relative stagnation of capital does not at once express itself in lower profits. On the other hand, the hastened concentration and centralization of capital can also be seen as measures forced upon capital to maintain its profitability. Insofar as these measures compensate for a lack of sufficient new investments, they hold down the rising organic composition of capital, thus bolstering the rate of profit at the expense of accumulation. But while the profit rate may be maintained, general economic activity stagnates, for it cannot advance without the production of additional capital. Sooner or later, the stagnation leads to a crisis, which can be overcome throught the resumption of the accumulation process. <endquote> It is utterly incredible that capital not be aware of a decline in profits. It is the most urgently watched measure in capitalist society. Even during the worst crisis in the history of capital, the 1930s, the US corporate sector as a whole lost money only once, in 1932, and the loss was only $1.5 billion (pretax), compared with profits of $10.6b in 1929. Profits rose steadily from 1933 through 1937, when they peaked at $7.5b, falling a bit in 1938 in the policy-driven slump, and then rising to splendid levels during the war. This is a tremendously resilient performance. Of course, from that crisis came a golden age. Doug -- Doug Henwood [dhenwood-AT-panix.com] Left Business Observer 250 W 85 St New York NY 10024-3217 USA 212-874-4020 voice 212-874-3137 fax ------------------
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