[OPE-L] Mavroundeas, Ioannides, Trigg and me

From: Jurriaan Bendien (adsl675281@TISCALI.NL)
Date: Sat Aug 26 2006 - 08:52:32 EDT

As regards the substantive issue, I think E. Mandel made a useful point:

"The question of determining whether according to Marx, a crisis of
overproduction is first of all a crisis of overproduction of commodities or
a crisis of overproduction of capital is really meaningless in the framework
of Marx's economic analysis. The mass of commodities is but one specific
form of capital, commodity capital. Under capitalism, which is generalised
commodity production, no overproduction is possible which is not
simultaneously overproduction of commodities and overproduction of capital
(overaccumulation). Likewise, the question to know whether the crisis
'centres' on the sphere of production or the sphere of circulation is
largely meaningless. The crisis is a disturbance (interruption) of the
process of enlarged reproduction; and according to Marx, the process of
reproduction is precisely a (contradictory) unity of production and
circulation. For capitalists, both individually (as separate firms) and as
the sum total of firms it is irrelevant whether more surplus-value has
actually been produced in the process of production, if that surplus-value
cannot be totally realised in the process of circulation. Contrary to many
economists, academic and marxist alike, Marx explicitly rejected any
Say-like illusion that production more or less automatically finds is own
market. It is correct that in the last analysis, capitalist crises of
overproduction result from a downslide of the average rate of profit. But
this does not represent a variant of the 'monocausal' explanation of crises.
It means that, under capitalism, the fluctuations of the average rate of
profit are in a sense the seismograph of what happens in the system as a
whole. So that formula just refers back to the sum-total of partially
independent variables, whose interplay causes the fluctuations of the
average rate of profit."

Source: http://www.ernestmandel.org/en/works/txt/karlmarx/9.htm

That is, no specific, necessary crisis sequence that must inevitably recur
in reality can be inferred from the reproduction schemes themselves - at
most these schemes can identify some preconditions for balanced growth, and
various possibilities of critical disproportions emerging in an economic
system lacking the means for a completely smooth or perfect mutual
adjustment of production, circulation and consumption. Equilibrium between
them exists only in theory, in reality there is only a calibration process
through various system shocks, ex post adjustments and market fluctuations.

In fact, H. Grossmann gets close to saying so himself:

"Marx's reproduction scheme represents the average line of accumulation,
that is the ideal normal trajectory in which accumulation occurs
proportionally in both departments. In reality there are deviations from
this average line -Marx himself repeatedly draws attention to the elastic
power of capital -but these deviations are only explicable in terms of the
average line. Luxemburg's mistake is that a model that represents only the
ideal trajectory in a range of possibilities is taken for an exact
description of the actual trajectory of capital. The same is true of Bauer.
He imagines that the magnitudes of his production scheme are the only
possible form in which the process of production can advance without
breaks... proportional accumulation is a purely ideal case; a fiction that
could actually prevail only accidentally. As a rule the actual process of
accumulation is quite unequal in the various branches"


"The circumstances through which the crises can be overcome vary enormously.
Ultimately however, they are all reducible to the fact that they either
reduce the value of the constant capital or increase the rate of surplus
value. In both cases the valorisation of capital is enhanced - the rate of
profit rises. Such circumstances lie both within production and in the
sphere of circulation, and pertain both to the inner mechanism of capital as
well as to its external relations to the world market."


Grossman's own main thesis is that "If the capitalist system inevitably
breaks down due to the relative decline in the mass of profit we can
understand why Marx ascribed such enormous importance to the tendential fall
in the rate of profit, which is simply the expression of this breakdown. It
is also clear what it means to say: 'The real barrier of capitalist
production is capital itself. It is that capital and its self expansion
appear as the starting and closing point, the motive and purpose of
production' (Marx, 1959, p. 250)." (ibid.)

However as soon as we inquire into why there is a "relative decline in the
mass of profit" it is clear that there could logically and in reality be a
number of different causes for this, the nature of which have to be verified
empirically. It is logically possible e.g. for a "profit-squeeze" situation
of the Crotty/Sutcliff/Glyn/Itoh type to occur, and this cannot be
theoretically ruled out. Whether in fact it does occur (e.g. in a situation
of near-zero unemployment) is of course difficult to prove conclusively, at
best we can empirically corroborate that.


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