>Re Allin's [6667] and Rakesh's [6668]: > >>From [6667]: >> The notion that Hayek has a valuable contribution to make on this (let >> alone, more valuable than Keynes's) seems to me fashionable nonsense. > >>From [6668]: > > Allin, did you make >> any use of John Strachey's The Nature of Capitalist Crisis, which >> seems to include the first Marxist critique of Hayek's cycle theory? > >Interesting. The "fashionable nonsense" reaction seems to be >Rosdolsky's evaluation of Strachley (_The Making of Marx's >Capital_, pp. 304-305). As I'm sure Rakesh is aware of, >Blake's evaluation of Strachley is mixed: on the one hand 2 of >his works [_Nature of Capitalist Crisis_ and _Theory and >Practice of Socialism_] are said to be "helpful" but on the >other hand they are damned: "They lack philosophical content, >and in this they are not much superior to such documents as >Leontiev" [reference to Leontiev's _Political Economy_] (Blake, >p. 675). > >In solidarity, Jerry Jerry, I had in mind Blake's extremely sharp comments on pp.548-553. In this post, I include some interesting quotations from Shaikh and Strachey. Like Howard and King, Blake dismisses as strange Strachey's idea that wages rise too slowly, relatively, during a boom, so that there is a glut, and yet too high absolutely, so that there is diminished accumulation. Blake finds the source of Strachey's later revisionism--that is, his promulgation of purchasing power expedients--in this incoherent formulation. Blake however applauds Strachey's critique of the Austrians and the revisionists--the book does read to me in last chapters as an incediary, rhetorical masterpiece (Mattick Sr reviewed it in 1935 in the journal Modern Monthly that I cannot find). At any rate, Strachey's argument does not reduce to his failed balancing act of falling rate of profit and underconsumption theories, though this is all Howard and King have to say about his book. As for Hayek, what is interesting (I believe) is his critique of underconsumptionism and of consumption as the driving force of accumulation; also interesting in light of Bush's recent tax cuts is Hayek's promulgation of tax cuts for the wealthy and social service reductions as a way of shoring up savings as the forcing of savings proves unsustainable in the course of an inflationary boom. It also seems to me that Hayek's idea of the narrowing of the consumption base of his triangle echoes Tugan's theory of accumulation--has this possible connection been noted before? Let me make one more point about realization difficulties. Let me first quote Shaikh's critique of Luxemburg (in which Paul Z may be interested): "What Marx's examples shows is that if capitalists did undertake the appropirate amount of investment, they they would indeed be able to seel their products and *make the anticipated profits.* If this success spurs them to reinvest once again in anticipation of yet more profits, they would be rewarded once again, and so on. All the while consumption would expand due to the growing employment of workers and the growing wealth of the capitalists. but the expansion of consumption would be a consequence, not a cause...[Y]et...what force, if any, make expanded reproduction possible in reality." An Intro to the Theory of crises, p. 229. Now Strachey thought that capitalists would be forced to undertake the appropriate level of investment because of the force of the falling rate of profit. Let me quote him here: "Marx supplies a formula for this necessary minimum rate of accumulation which must be attained unless the amount of profit is to decline and the system to stall: "'In order that the mass of profit made at a declining rate of profit may remain the same as before, the multiplier indicating the growth of the total capital must be equal to the divisor indicating the fall of the rate of profit'... "But Marx writes accumulation must be just a little faster than this. It must be at least fast enough to make the amount of profit not only stay the same, but a grow a little from year to year, in spite of the fall in the rate of profit. For otherwise there will be no incentive for the capitalists in the whole business of accumulation. "This is the formula of the minimum rate of accumulation necessary to capitalism. If ever, and wherever, the rate of accumulation falls below this level, the system must, and does, jamb. For it becomes more profitable for the capitalists to restrict than to expand production. ANd unless it pays the capitalists better to use more capital and give more employment, they will use less capital and give less employment... "We have established the fact that there exists for any capitalist economy a certain minimum rate of accumulation, a certain minimum speed, that is to say, wat which its total capital msut grow if the system is to function. And we have estab lished the fact this minimum rate of accumulation is determined by the speed at which v/c is falling; by the speed , that is to say, of technical progress. "This is a conclusion of the utmost importance. For it, and it alone, enables us to understand why it is that it is impossible to sovle the fundamental difficulty, the basis and ever recurrent crisis of capitalism in the simple way advocated by all reformers... The essence of every crisis is, very visibly a glut...Why then, say the reformers, cannot this glut be cured by the simple obvious expedient of 'distributing purhcasing power'? How can it be maintained that a policy of high wages combined, if necessary, with the institution of social services, would not sovle the problem by giving everybody the money to buy the available goods, and so end the glut? At length we can say clearly why this policy cannot be adopted. It cannot be adopted because to raise wages, or to increase taxation in order to pay for social services, would at once begin to diminish the rate of accumulation: it would make it impossible for the capitalists to augment their total capital at a pace sufficient to offset the fall in v/c and so achieve that indispensable purpose, some growth in the absolute magnitude of v. "It is clear, moreover, that it is just precisely today, when technical progress is proceeding at an unequlled rate, when the bottom is dropping out of v/c, that every available penny must be devoted to accumulation. And this why, as we have already seen, the capitalists in actual practice, far from trying to cure the recurrent gluts of the system by increasing the non capitalists purchasing power, apply th paradoxical remedy of reducing everyone's purchasing power either by cutting wages or raising prices. (Indeed, we saw that the whole dispute between the different schools of capitalist economics turned out to be concerned exclusively with the question of which of these methods of reducing purchasing power should be adopted." p. 252-3 Of course to the extent that profitability is not restored by cuts in purchasing power within the nation-state, the national capital must redouble its efforts to restore the rentability of the system by purchasing raw materials at prices ever lower than their values and selling the output of its technological monopolies at prices exceeding their prices of production. As Strachey and David Y have argued, the availability of imperialist counter-tendencies may dull the sharpness of class contradictions within the imperialist nation state and lead intellectuals to lose focus on the nature and violence of capitalist contradictions. Rakesh
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