Paul C writes in 6871 > >If one views things sufficiently abstractly all states are class societies, >to say that the whole world is submerged within the social relations >of capital is in anycase not true even at the economic level. >What proportion of the worlds working population are wage labourers? One way of understanding capital as a global relation is to focus on the establishment of prices at production at the level of the world, rather than any national, market. For example, Grossmann wrote in 1929: "In effect price formation on the world market is governed by the same principles that apply under a conceptually isolated capitalism. The latter anyway is merely a theoretical model; the world market, as a unity of specific national economies, is something real and concrete. Today the prices of the most important raw materials and final products are determined internationally, in the world market. We are no longer confronted by a national level of prices but a level determined in the world market. In a conceptually isolated capitalism, entrepreneurs with an above average technology make a surplus profit (a rate of profit above the average) when they well their commodities at socially average prices. Likewise on the world market the technologically advanced countries make a surplus profit at the cost of the technologically less developed ones. Marx repeatedly draws out the international effects of the law of value. For instance, he says, 'most agricultural peoples are forced to sell their product *below* its value whereas in countries with advanced capitalist production the agricultural product rises to its value. " As I understand Cyrus' argument, such a global relation was not in fact fully developed until the 1970s. That is, until about 1970 the price of oil was basically determined by monopoly capital that then enforced that price on a global scale. For Cyrus--as I understand him--both imperialism and monopoly capital break down and the price of oil comes to determined in and through world-wide competition (the OPEC countries as landlord govts also become more effective in seizing rent the magnitude which is determined by the price set in and through global competition, with spot markets playing a leading role). Oil was the first industry to come under the global social relation. I believe that this is what Cyrus is arguing. Without realizing it, Robert Brenner seems to have raised recently the same problems that Cyrus already had. Brenner's argument for example can be read as claiming that prices of production had been formed within regional/national blocs until the late 60s; then as Japanese and German production entered the global market, there was a period of prolonged crisis from which emerged a structure of global prices of production which immediately benefited the higher productivity producer nations (Germany, Japan which had successfully built on a superior technological foundation) at the expense of the lower productivity ones (the US). However, the US competitive responses (currency devaluation, wage repression) prevented the exit of the capital that was inefficient in terms of the new global prices of production, and this insufficient exit then had the effect of bringing the rate of profit down in the system as a whole. Of course there has been a lot of argument that this analysis cannot hold at the micro-logical level, and I have not presented it well either. But if in fact prices of production are established at the global, rather than the national level, then why are we interested in so called national profit rates at all? All the best, Rakesh
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