Dear Rakesh, Just briefly, for now: The Marxian question of the decline in the profit rate is a tendency, which meets its counter-tendencies in the formation of new 'value' over the cycles of production. This is at the heart of Marx's crisis theory. This is totally different from the so-called long-term fall in the rate of profit that is so popularly debated these days. I think the origin of this latter approach is in Smith and Ricardo. See, for instance, Ben Fine, Theories of Capitalist Development. 1981. Best, Cyrus ----- Original Message ----- From: "Rakesh Bhandari" <rakeshb@stanford.edu> To: <ope-l@galaxy.csuchico.edu> Sent: Wednesday, April 03, 2002 11:47 AM Subject: [OPE-L:6875] Re: Re: Re: Re: Re: Iraq > 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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