From: Rakesh Bhandari (rakeshb@STANFORD.EDU)
Date: Thu May 29 2003 - 19:33:28 EDT
Paul C, I'm not quite clear what you are saying here stagnant population=>rising OCC=>falling rate of profit=>overaccumulation of capital=>intensified international competition to secure foreign investment outlets If so, do note Grossmann's argument that capital would be overaccumulated not because of a rising OCC but in spite of it and even if population did not remain stagnant. You write: >The neo-liberal opening >of world capital markets was designed to offset >the stagnant labour forces by allowing capital to >move to labour. But this does not suffice to >prevent chronic recessions in highly capitalised >economies such as Japan. Well one reason for this failure would be that the repatriation of profit which results from this export of capital only compounds the problem of overaccumulation which led to the export in the first place. Yours, Rakesh > >The general condition for a falling rate of profit, s/v being constant is that >capital stock grows faster than the employed population. > >To investigate this further we need theores of the determinants >of aggregate accumulation and of the determinants of the growth >of the employed population. > >Marx deals with a special case where no assumptions are >made about population growth and technological determinats >drive the accumulation of a larger capital stock. This is >not a general treatment of the problem, and is unconvincing >on its own grounds, since it does not explain why technical >change should raise the organic composition rather than >lowering it. > >If we make the parsimonious assumption that a non-zero >percent of profit is accumulated, then if the working population >is stagnant - once the country has undergone demographic >conversion for example - we will get a falling rate of profit. >This makes no assumptions about technology. > >If the above assumption fails, then this implies either zero >or negative accumulation. This in turn implies strong >recesssionary tendancies unless >a) the capitalists spend their profits unproductively on > servants and luxuries as they did in the UK 1870-1900. > b) state expenditure realises the surplus, financing it > with bond sales, or taxes on profit. >Option a) is only sustainable if there is no serious competition >on the world market. (b) is the condition to which capitalist >economies tend. > >It implies serious and sustained deflationary tendencies, >in capitalist economies. These were very evident in the >mid 20th century. In what Hobsbawn terms the golden >age - from 1950 - 1970, the operation of option b) allowed >continued growth in the presence of declining profit >rates. The rates became critically low in the oldest >capitalist economies after that. The neo-liberal opening >of world capital markets was designed to offset >the stagnant labour forces by allowing capital to >move to labour. But this does not suffice to >prevent chronic recessions in highly capitalised >economies such as Japan. > >The stability pact impairs the current ability of >European economies to maintain full capacity by >state expenditure, thus blocking one of >the historic avenues out of the problem. > >> >>C. Does the substitution of means of production for direct labour >>replenish the reserve army of labour? >> >Not necessarily, if the rate of accumulation exceeds the rate of substitution. > >> >>D. Does the rise in the organic composition of capital have >>anything to do with the rate of surplus value? >> >In the limiting case of no surplus value there would be no accumulation >and so no rise in organic composition. > >> >> >> I think these relations are necessary to specify before >>concluding, as Paul has, that a rising organic composition leads to >>inadequate production of surplus value and a strengthening of the >>working class. >> >> in solidarity, >> Michael L >> ---------------------Michael A. LebowitzProfessor >>EmeritusEconomics DepartmentSimon Fraser UniversityBurnaby, B.C., >>Canada V5A 1S6Currently based in Cuba. Can be reached via:Michael >>Lebowitzc/o MEPLACalle 13 No. 504 ent. D y E, Vedado, La Habana, >>CubaCodigo Postal 10 4000(537) 33 30 75 or 832 21 54telefax (at >>night): (537) 33 30 75 >> >-- >Paul Cockshott >Dept Computing Science >University of Glasgow > > > >0141 330 3125 >
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