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

From: Jurriaan Bendien (adsl675281@TISCALI.NL)
Date: Mon Aug 28 2006 - 16:14:23 EDT


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

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


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