From: Jurriaan Bendien (adsl675281@TISCALI.NL)
Date: Wed Aug 16 2006 - 18:06:02 EDT
Rakesh wrote:
Overaccumulation results when in the course of accumulation
the mass of surplus value remains the same or declines in an absolute
sense.
Comment:
That's another interpretation. But, mathematically in this sense it is
unnecessary for "the mass of surplus value to remain the same or decline",
all that is required is that this mass doesn't grow sufficiently fast
anymore, relative to capital assets, total output and the profit rate.
If your definition is taken at face value, a profit squeeze (or anything for
that matter that erodes the mass of profit) could cause overaccumulation.
The basic Grossman thesis which Anwars Shaikh (like Louis Fraina/Lewis Corey
back in the 1930s) tries to prove empirically ("The Falling Rate of Profit
as the Cause of Long Waves: Theory and Empirical Evidence (1992), in: New
Findings in Long Wave Research, Alfred Kleinknecht, Ernest Mandel, and
Immanuel Wallerstein (eds.), Macmillan Press, London.) is that the increase
of the total mass of profit is eventually eclipsed by the falling average
rate of profit, i.e. at some point the effect of the rising OCC becomes
critical for capital returns and chokes off economic growth.
Rakesh asked:
when is the surplus value produced sufficient?
Comment:
The argument here is that the new surplus-value produced is sufficient to
valorise the previously existing stock of capital, but that whichever part
of this new surplus value that is reinvested, cannot be reinvested at the
previously obtained yield.
Specifically, Grossman writes: "At the moment of crisis capital - in the
form of the portions of surplus value previously destined for accumulation -
are excluded from the process of production. Absolute overproduction begins
as unsold stocks accumulate. Money capital in search of investment can no
longer be applied profitably in production and turns to the stock exchange."
http://www.marxists.org/archive/grossman/1929/breakdown/ch02.htm
His argument, though plausible, is inadequate: at one point, he says first
the crisis consists in insufficient surplus value being produced to valorise
the stock of production capital, but then he says that part of the newly
produced surplus value is effectively surplus capital, implying it is in
excess of valorization requirements. This aspect of his exposition is
inadequate, as E. Mandel pointed out, because it conflates the impossibility
of valorizing the net new additions to capital with the impossibility of
valorizing all the previously invested capital. Also, Grossman does not
trace out how the valorisation crisis leads to the restructuring of capital.
General comment:
Grossman's theorem about overaccumulation applies to the total stock of
privately owned productive capital assets only, and not to total capital
assets, of which - statistical information attests - privately owned
productive capital assets are only the minor subset. Consequently, it is not
an adequate theory of total social capital.
Looking at the current global situation, the general picture is one of
'surplus capital', contributing to low interest rates. Firms and
corporations in the USA, Japan and Western Europe are now, on average, 'net
savers' who are using earnings and reserves to pay off debts and speculate
in equities and securities, rather than borrowing extra capital in capital
markets to expand production. This combines with near-zero household savings
rates. The net decline in the demand for loan capital by firms is estimated
at 250 billion euro a year for the USA, 160 billion euro for Japan. (see
e.g. J. Meesters, "Bedrijfsleven belangrijke veroorzaker van lage
kapitaalmarktrente", Economisch Statistische Berichten (ESB), 11 August
2006, pp. 370-372 http://esbonline.sdu.nl/esb/).
Jurriaan
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