From: Jurriaan Bendien (adsl675281@TISCALI.NL)
Date: Tue Aug 29 2006 - 17:56:42 EDT
While I think of it, I should perhaps add that E. Mandel considered H. Grossman as "multicausalist" crisis theorist as well. In the text I mentioned, Mandel writes: "'Non-monocausal' ones try to elaborate Marx's own dictum according to which all basic contradictions of the capitalist mode of production come into play in the process leading to a capitalist crises (Grossman, Mandel)." I suppose the reason for that interpretation was, that Grossman distinguished between a basic tendency towards overinvestment in production capital expressing itself in a falling rate of profit, and a raft of "modifying countertendencies" to that trend, which he itemises. By the time you have elaborated the effects or dynamics of all these tendencies, you have basically covered just about all the main economic contradictions intrinsic to the capitalist mode of production. Mandel was rather hesistant about accepting the thesis that the average rate of profit could fall as a secular trend, be it more slowly and with fluctuations, also *during* the long boom (how could a capitalist economy boom, without a rising profit rate?), while the mass of profit increased, and he was also keenly aware that the growth of the mass of profit was itself conditional on *market expansion* (both domestically and through foreign trade - there is an obvious link here to the successes and failures of imperialist policies). Consequently, a drop in aggregate demand (whether through bottlenecks, saturated markets, wage cuts, monetary policy or wars etc.) had immediate repercussions for the growth rate of the mass of profit. He basically thought - basing himself on sparse statistical evidence, e.g. Joseph Gillman - that during the long boom, or at least in the early years of it, average rates of profit must have massively increased (which he explains partly through technological revolutions, partly through repression of labour unions, partly through transfers of resources by state policy, and partly through a surge in aggregate demand). This contrasts with e.g. Anwar Shaikh's interpretation, where the average profit rate declines even *during* the boom, although the mass of profit rises. Mandel's sprawling and rather unsystematic Phd thesis "Late Capitalism" is nevertheless "Grossmanite" insofar as it is mainly concerned precisely with the "modifying countertendencies" that provided the capitalist system with a new lease of life after world war II. Grossman had set up a kind of theoretical model, and Mandel sought to verify how that worked out in historical reality. Mandel was accused by CSE economists of not just being unsystematic but also for being eclectic, ignoring the centrality of the tendency of the rate of profit to fall for the "law of accumulation". But this criticism is rather weak - he tried precisely to identify the main causes for why profitability was sustained or even increased through the long boom, and why it would fall nevertheless, so really he was centrally concerned with the profitability issue. The main problem with his expose is that, having identified a raft of "modifying countertendencies" and circumstances influencing profitability, these variables could be mutually related in all sorts of different ways, as he himself admits. This raises the objection that a theory should definitely specify how the variables are (causally and quantitatively) related, and then test empirically if this is true. But really he was in no position to test this, both because he lacked the time for substantive empirical research, and because it would take more research than a person could do in a lifetime to test all of that in a scientifically acceptable manner. This invites the accusation that the theory is metaphysical, it explains everything and nothing - at best, it stated hypotheses about what "could" explain the dynamics of global capitalist development, but it was more an interpretation, than a scientifically satisfactory explanation, and this rich and fertile interpretation could always invoke yet another aspect that "could" explain the dynamics, for every nuance another nuance was possible. Whether it really did explain them, remained uncertain, and there is a sense in which it might describe more than explain (in the sense that the Armstrong/Glyn/Harrison book is to a large extent descriptive). Well, the German original of Mandel's Phd thesis was subtitled rather modestly "Versuch einer Erklarung", i.e. an attempt at an explanation, which is saying more "this is how you could explain it", i.e. providing a heuristic theory as a journalist, aware of the complexities of life, might create from his experience. In this respect it was quite successful actually, insofar as it inspired many scholars, and put the discussion on a higher plane, like the works of Arghiri Emmanuel, Klaus Busch, Pierre Salama, Elmar Alvater and Samir Amin (whatever their faults) did. Maybe that is all you can achieve in the field of theory. A theory which pretends to explain "everything" (i.e. is over-extended beyond its proper aegis) explains nothing. Personally I don't really think that capitalism functions quite the way that Mandel says it does - though if you write so much you have to be correct at least on some points - but that's another story. I think much more attention should be paid to how a theory is formed in the first instance. The main thing I am trying to convey here is that Mandel actually tried to apply Grossman's idea to historical reality, though he dissented from mathematical "proofs" of capitalist breakdown. This point was missed by most people I've discussed with on the topic, or that I've read. Marx one time had this idea that a crisis theory should identify an ideal movement or sequence of events that would repeat itself more or less at every level (sectorally, economy-wide, globally) - I'm not quite sure what he had in mind, but Mandel did attempt to sketch such a thing in his "Introduction to Capital Vol. 3" (Pelican edition), pp. 48-51. No doubt an Unoist would argue such an idealised picture could apply only at the level of a "purely capitalist society"... Meanwhile, economists are still debating about what exactly caused the Great Depression of the 1930s, so there you go. Even half a century or a century afterwards, people might still have good reason to scientifically disagree about the causes of events that really happened. So maybe there is just not a lot of meat in "crisis theories". Jurriaan
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