From: Jurriaan Bendien (adsl675281@TISCALI.NL)
Date: Mon Aug 28 2006 - 16:14:23 EDT
Rakesh, Well just quikcly I think Grossman suggests the root cause of crises (or the ultimate breakdown) is insufficient surplus-labour performed that can valorise the growing mass of production capital. But as I've argued before, production capital is not the only kind of physical or financial capital asset there is. I think Mandel means it is the realised volume of surplus-value (the mass of profit actually realised) that is critical, and that depends not just on what happens in production but also on the circulation of commodities, including aggregate demand. In reality, the realised volume of surplus value could vary positively or negatively from the produced volume of surplus value (though Marx, and Mandel, generally assumed at a certain level of abstraction that realised profit cannot be more that surplus value produced - but if you factor in unequal exchanges, the secondary circuits of capital, and foreign trade, profits could be larger than total surplus value produced). Overproduction of commodities (or serious overcapacity) is simultaneously overaccumulation of capital (overinvestment). The general idea that Grossman and Mandel both have, is that the main tendency towards breakdown (principally the rising OCC) will ultimately prevail over the counter-tendencies or modifying influences, in the long term, but that is I think not something that can be logically proved in a theoretical model, you'd have to look at the facts, i.e. how the different variables interrelate in reality. At best the theory can specify what the main factors likely to be involved are, and the possible limits of their variability. Commercially, it is rather academic how much value is added by human labour, if that added value is not realised as profit income on invested capital. Of course, firms are almost always interested in improving their productivity, and thus their value-adding capacity, since the larger the difference between their unit-costs and the ruling output prices in the market, the more income is generated. In that sense you must be correct. The "monocausal" theorists say there is one fundamental cause for all crises, and that crises accordingly occur and recur in a specific pattern or sequence - either the system inevitably generates overaccumulation, or it generates underconsumption, or it generates sectoral disproportionalities, and so on. The idea is, that the system tends towards one specific critical kind of disequilibrium or imbalance, that is recurrently responsible for the decline in investment, output and employment. Yet overaccumulation and overproduction also imply underconsumption (given the reality that products cannot be sold), you could have all these happening at the same time. The "multicausal" theorists say that whereas the crisis (the drop in output, investment and employment) usually means that profitability is insufficient, the exact causes for this could empirically vary greatly, simply because profitability is influenced by a large number of possible circumstances. You don't have to explain that crises occur, it is empirically obvious they occur - all that the Marxian position really commits you to is that they are system-immanent, because capitalist development is structurally incapable of sustaining balanced growth long-term (as against comforting bourgeois theories that markets tend automatically towards economic harmony and equilibrium, and that crises can be caused only by extra-economic factors preventing the market from equilibrating, as it would spontaneously). In other words, a situation of increasing profitability and expanding demand cannot be indefinitely maintained, as long as you have capitalism. So you have these booms and busts because you have the institutions of capitalism (well, you can flesh it out a bit by distinguishing between the possibility of crises, their necessity, their recurrence, their root causes and triggers, their historical specificity etc.). What you then have to explain is why specific crises occur, but in that case you have to explain why the general drop in profitability occurs - and whereas your theory might identify the main factors involved, as a generalisation, these factors might interrelate in different ways at different times and places. Therefore, there is not only one kind of imbalance that is necessarily always responsible for the crises that occur, and there is not necessarily one sequence of events that invariably recurs. One of the problems with extrapolating the reproduction schemes in the very long term I think is that within the space of one generation, a large part of the inputs and outputs are no longer the same, i.e. within one generation (say 25 years) you have a drastically change in cost-structure and demand-structure of products, and consequently a different relationship between economic sectors. So if you just focused abstractly on the proportions of a consumer products sector,a producer goods sector and a luxury/arms sector, you might miss important things going on. Personally, I don't think that a specific political position necessarily follows from a particular crisis analysis. If, for example, you argued that the crisis was due to insufficient surplus-value produced, it could be inferred from this that if wages were cut, surplus-value (profits) would be increased, and the crisis solved. It is usually more the other way around: a specific political position (a specific class interest) tends to generate a particular crisis analysis. But objectively or scientifically, I think the main difference is between those (mainly the Left) who argue that crises are system-immanent (endogenous) and those who think that crises are caused by extra-economic factors impeding the efficient operation of markets (mainly the Right). But even then, it could be that leftists and rightists fully agreed on the main causes of a crisis, yet have very different prescriptions for how to get out of it. Generally, E. Mandel distinguished between four sorts of crises - conjunctural crises related to the trade cycle (at intervals of about 7-10 years), systemic crises (at intervals of about 25 years, at the end of a long wave of expansion), the historic crisis of bourgeois civilisation in the broad sweep of history (beginning approximately in 1905) and the ultimate disintegration or collapse of capitalism. When Marx talked about "commercial crises", I think Marx had mainly in mind the first type mentioned. Jurriaan
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