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" and: "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." Source: http://marxists.architexturez.net/archive/grossman/1929/breakdown/ch02.htm 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. Jurriaan
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