Re: [OPE-L] Falling Rate of Profit as Science Fiction?

From: Jerry Levy (Gerald_A_Levy@MSN.COM)
Date: Fri Mar 10 2006 - 11:04:33 EST

Hi Jurriaan,

I just wrote a reply from my other address but I lost it (when I hit
the send button there was a message which said that I should go
back to the login page!) so this will be brief.  If there are some
additional points which you want me to respond to then just
sing out.

JL wrote:
> For instance (to take one example),  Makoto accepts the analytical
> importance not only of profitability but also of the rate of profit as
> understood by Marx.  But, he attributes a fall in the general rate of
> profit to a periodic  slackening of the demand for labor-power rather
> than to an increasing OCC.  So, there are theories of a falling rate of
> profit which are _not_ based on the TRPF.
JB replied:
> I'd be a bit careful what you say here, because Prof. Makoto Itoh does
> distinguish between the "pure" theory, the "stages" theory and the
> specifics of economic conditions for a country in a given time and place.
> Itoh for example accepted there is evidence for a "profit squeeze" in
> Britain in the later 1960s or early 1970s.

In _Value and Crisis_ he  addresses crisis both in terms of basic theory
and in terms of stages theory (in that book, more on the former than the
latter).  Regarding basic theory , while he advances an excess capital
theory of crisis, it is differentiated from both a rising OCC theory and
profit  squeeze approaches.  More specifically, while he agrees that there
is  empirical evidence of a profit squeeze, he does not offer the same
_theoretical_ explanation as Glyn-Sutcliffe et. al.  That is, the labor
power shortage theory which he (following Uno) advances is
substantively different from profit-squeeze theory (this is explained
briefly in the following: "... the recent contributions emphasize the role
of class struggle rather than changes in the labor market in the process
of capital accumulation as the cause of a rise in wages, and also tend to
concentrate on the secular rather than the cyclical character of crisis.",
p. 126).     His perspective on crisis is explained in greater detail in
_The Basic Theory of Capitalism: The Forms and Substance of the
Capitalist Economy_;  his book _The World Economic Crisis and
Japanese Capitalism_, OTOH,  could be considered to be an
application of stages theory.

{minor side-note:
> Well I have more regard for Gordon as econometrist than Mandel.
For many years, David taught the required econometric courses at
the New School and campaigned hard within the department for
more rigorous econometric requirements for students. This was
a subject he felt very strongly about.}

> In general, the term "crisis" is an overused word, and a loaded term.

That's the concern that I have which sparked this thread.  If capitalism
is said to be always in crisis then a) crisis ceases to have any
meaning, and 2) we don't recognize the significance of booms when they
do occur.  In any event, those who say that capitalism is in crisis
should have some empirical way of demonstrating rather than merely
asserting it _and_ a way of determining when a crisis ends.

>  Ever since the first World War, Marxists have typically been
> doomsayers, on the look-out for signs of the impending collapse of the
> capitalist system.

Yes, I think this might be related from a history of thought perspective
to an erroneous understanding of  Lenin's conception of  imperialism --
especially a mis-reading  of  the title of his popular pamphlet. I.e.
a belief that imperialism is the "last" rather than the "latest" phase of
capitalism (the latter, I have been told, is a more accurate translation).

>  They usually believe that Marxism is about (1)
> propagating Marxist ideology, and about (2) casting skepsis on the
> potentials of capitalism.

Yes,  I think that's all too frequently the case.  The ideology gets in
the way of perceiving social realities: a case of 'red-colored glasses'
so to speak.  How does one respond, for instance, to someone
who asserts that "the course of events massively confirms" the
predictions of catastrophist breakdown theorists?

In solidarity, Jerry

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