From: Gerald_A_Levy@MSN.COM
Date: Mon Dec 20 2004 - 13:36:24 EST
> Winternitz is arguing that in the boom demand may be strong enough > both to effect continously technical change as embodied in > accumulated capital goods and to keep running equipment that will > become outdated in the recessionary phase. Rakesh, Why will the constant fixed capital become outdated in the recessionary phase but not the expansionary phase of the cycle? Even assuming that firms are producing at full capacity, why does continuous technical change not also normally imply moral depreciation during the upswing? > On empirical grounds I am skeptical of the claim that booms are > usually brought to an end by the physical constraint of labor > shortage and wage pressure from extensive capital accumulation. As > the potential supply of labor has been increased manifold through the > incorporation of India, China and Eastern Europe, one would have to > subscribe to an end of the business cycle thesis. Let us not forget that: a) there can be a surplus of labor power in one or more capitalist social formations at the same time as there is a shortage of labor power in other capitalist social formations; b) there is limited mobility of labor power (and, sometimes, constant capital) across nations; c) there are nation states, and; d) there is uneven development which means that a crisis typically develops in one nation before it spreads to other nations and becomes generalized. a-d together may mean that a crisis can develop in a major capitalist social formation (e.g. Japan) if there is a labor power shortage. Given controls on the migration of workers and contingencies related to the class struggle, there is no guarantee that this crisis will be readily overcome within that social formation. And, there is no guarantee that enough money capital from the social formation in crisis will be invested in other parts of the world economy in which there isn't a labor power shortage. And, because of the linkages that exist among different capitalist economies, a downturn in a major capitalist economy can trigger a crisis in its trading partners *even though the conditions are different*. In other words, there doesn't have to be a global shortage of labor power for an international crisis to be triggered by the shortage of labor power in one or more major capitalist social formations. In solidarity, Jerry
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