[OPE-L] Grossmann and world trade

From: Jurriaan Bendien (adsl675281@TISCALI.NL)
Date: Sat Aug 12 2006 - 08:32:47 EDT


Yes, I have read H. Grossmann, in fact before I even read H. Grossman (when
I was 25) I had developed a theory very similar to H. Grossmann. I have also
met Jairus Banaji who translated H. Grossmann's text into English (he said
he intends to translate the remainder of the book as well). I thought it was
amazing H. Grossmann published this in 1929. However in some ways L. Corey
(aka Louis Fraina)'s book "The Decline of American Capitalism" is superior.

The trouble though with fundamentalist Marxism is, that it believes economic
life exists only of production relations. Distribution, circulation and
consumption do not exist. This leads to warped theories of economic

There is plenty Marxist rhetoric about "over-accumulation crisis", but most
of these people don't know what they are talking about.

In Grossmann and Mattick, sometimes the argument is that the
overaccumulation consists of not sufficient new surplus value being produced
to valorise all (production) capital assets, at other times sufficient new
surplus value is produced, but it can no longer be reinvested profitably, or
in any case not at, or above, the previously ruling rate of profit.
Sometimes overaccumulation applies to all capital assets, sometimes only to
production capital, and sometimes only to the newly produced capital assets
that are an addition to the existing physical capital stock. In their haste
to demolish underconsumptionist theories of crisis, the problem of the
realisation of surplus value is simply deleted, it doesn't exist.

You asked rhetorically:

"do you think Grossman denies the importance of profiteering through
stock market speculation, real estate speculation, betting on the futures
market, etc? Again please reconsult the text."

No I don't, but that is a side issue - what I referred to is the false
concept of valorisation involved. Contrary to what fundamentalists say, the
economy consists of more than the circuit of M-C...P...C'-M' depicted in GDP
statistics, and commercial trade consists of more than "stock market
speculation, real estate speculation, betting on the futures market, etc".
The concepts of the production of surplus value and the realisation of
surplus-value have to be correctly defined.

Cf. K. Marx:

"As soon as all the surplus-labour it was possible to squeeze out has been
embodied in commodities, surplus-value has been produced. But this
production of surplus-value completes but the first act of the capitalist
process of production - the direct production process. Capital has absorbed
so and so much unpaid labour. With the development of the process, which
expresses itself in a drop in the rate of profit, the mass of surplus-value
thus produced swells to immense dimensions. Now comes the second act of the
process. The entire mass of commodities, i.e. , the total product, including
the portion which replaces the constant and variable capital, and that
representing surplus-value, must be sold. If this is not done, or done only
in part, or only at prices below the prices of production, the labourer has
been indeed exploited, but his exploitation is not realised as such for the
capitalist, and this can be bound up with a total or partial failure to
realise the surplus-value pressed out of him, indeed even with the partial
or total loss of the capital. The conditions of direct exploitation, and
those of realising it, are not identical. They diverge not only in place and
time, but also logically. The first are only limited by the productive power
of society, the latter by the proportional relation of the various branches
of production and the consumer power of society. But this last-named is not
determined either by the absolute productive power, or by the absolute
consumer power, but by the consumer power based on antagonistic conditions
of distribution, which reduce the consumption of the bulk of society to a
minimum varying within more or less narrow limits. It is furthermore
restricted by the tendency to accumulate, the drive to expand capital and
produce surplus-value on an extended scale. This is law for capitalist
production, imposed by incessant revolutions in the methods of production
themselves, by the depreciation of existing capital always bound up with
them, by the general competitive struggle and the need to improve production
and expand its scale merely as a means of self-preservation and under
penalty of ruin. The market must, therefore, be continually extended, so
that its interrelations and the conditions regulating them assume more and
more the form of a natural law working independently of the producer, and
become ever more uncontrollable. This internal contradiction seeks to
resolve itself through expansion of the outlying field of production. But
the more productiveness develops, the more it finds itself at variance with
the narrow basis on which the conditions of consumption rest. It is no
contradiction at all on this self-contradictory basis that there should be
an excess of capital simultaneously with a growing surplus of population.
For while a combination of these two would, indeed, increase the mass of
produced surplus-value, it would at the same time intensify the
contradiction between the conditions under which this surplus-value is
produced and those under which it is realised."

German original:

Sobald das auspreßbare Quantum Mehrarbeit in Waren vergegenständlicht ist,
ist der Mehrwert produziert. Aber mit dieser Produktion des Mehrwerts ist
nur der erste Akt des kapitalistischen Produktionsprozesses, der
unmittelbare Produktionsprozeß beendet. Das Kapital hat soundsoviel
unbezahlte Arbeit eingesaugt. Mit der Entwicklung des Prozesses, der sich im
Fall der Profitrate ausdrückt, schwillt die Masse des so produzierten
Mehrwerts ins Ungeheure. Nun kommt der zweite Akt des Prozesses. Die gesamte
Warenmasse, das Gesamtprodukt, sowohl der Teil, der das konstante und
variable Kapital ersetzt, wie der den Mehrwert darstellt, muß verkauft
werden. Geschieht das nicht oder nur zum Teil oder nur zu Preisen, die unter
den Produktionspreisen stehn, so ist der Arbeiter zwar exploitiert, aber
seine Exploitation realisiert sich nicht als solche für den Kapitalisten,
kann mit gar keiner oder nur teilweiser Realisation des abgepreßten
Mehrwerts, ja mit teilweisem oder ganzem Verlust seines Kapitals verbunden
sein. Die Bedingungen der unmittelbaren Exploitation und die ihrer
Realisation sind nicht identisch. Sie fallen nicht nur nach Zeit und Ort,
sondern auch begrifflich auseinander. Die einen sind nur beschränkt durch
die Produktivkraft der Gesellschaft, die andren durch die Proportionalität
der verschiednen Produktionszweige und durch die Konsumtionskraft der
Gesellschaft. Diese letztre ist aber bestimmt weder durch die absolute
Produktionskraft noch durch die absolute Konsumtionskraft; sondern durch die
Konsumtionskraft auf Basis antagonistischer Distributionsverhältnisse,
welche die Konsumtion der großen Masse der Gesellschaft auf ein nur
innerhalb mehr oder minder enger Grenzen veränderliches Minimum reduziert.
Sie ist ferner beschränkt durch den Akkumulationstrieb, den Trieb nach
Vergrößerung des Kapitals und nach Produktion von Mehrwert auf erweiterter
Stufenleiter. Dies ist Gesetz für die kapitalistische Produktion, gegeben
durch die beständigen Revolutionen in den Produktionsmethoden selbst, die
damit beständig verknüpfte Entwertung von vorhandnem Kapital, <255> den
allgemeinen Konkurrenzkampf und die Notwendigkeit, die Produktion zu
verbessern und ihre Stufenleiter auszudehnen, bloß als Erhaltungsmittel und
bei Strafe des Untergangs. Der Markt muß daher beständig ausgedehnt werden,
so daß seine Zusammenhänge und die sie regelnden Bedingungen immer mehr die
Gestalt eines von den Produzenten unabhängigen Naturgesetzes annehmen, immer
unkontrollierbarer werden. Der innere Widerspruch sucht sich auszugleichen
durch Ausdehnung des äußern Feldes der Produktion. Je mehr sich aber die
Produktivkraft entwickelt, um so mehr gerät sie in Widerstreit mit der engen
Basis, worauf die Konsumtionsverhältnisse beruhen. Es ist auf dieser
widerspruchsvollen Basis durchaus kein Widerspruch, daß Übermaß von Kapital
verbunden ist mit wachsendem Übermaß von Bevölkerung; denn obgleich, beide
zusammengebracht, die Masse des produzierten Mehrwerts sich steigern würde,
steigert sich eben damit der Widerspruch zwischen den Bedingungen, worin
dieser Mehrwert produziert, und den Bedingungen, worin er realisiert wird.

You asked also:

"why important to relax those assumptions in addition to the many
assumptions that he did relax in the course of study of counter-tendencies?"

Basically because of the nature of capitalist economic growth. As E. Mandel
(who based his Phd Thesis largely on Grossmann) noted, in the boom phase as
well as the recessive phase of capitalist development, an unequal
development will ocur, with regard to investment in Department I and
Department II, and unequal growth rates will occur. Dept I industries are
intrinsically less flexible in adapting to demand fluctuations than Dept II
industries. This is also reflected in the differential growth rates of S/V
and C/V. Generally C/V is higher in Dept I than in Dept II.


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