From: Jurriaan Bendien (adsl675281@TISCALI.NL)
Date: Mon Oct 02 2006 - 14:24:23 EDT
Rakesh, you wrote: "You think the change of plan controversy has already run its course. I don't think it has even begun". Comment - That is not what I think - what I think is only that there have been many individuals and schools already, which have tried to answer the question of how to develop Marx's analysis further. Among others, - the reproduction schemes (e.g. Hilferding, Bauer, Grossman, Luxemburg, Bukharin) - levels of abstraction (e.g. Kozo Uno, Itoh, Althusser) - partially autonomous variables and long waves (e.g. Mandel) - social structure of accumulation (e.g. Bowles, Gordon) - regulation theory (e.g. Aglietta, Boyer) - unequal exchange theories (e.g. Emmanuel, Amin) - international trade (e.g. Busch, Altvater, Girschner, Siegel, Shaikh) - profit squeeze (e.g. Glyn, Armstrong, Harrison) - systematic dialectics (e.g. Reuten, Smith, Arthur) - the role of the state (e.g. Jessop, Kofler) These approaches have yielded important new insights, but obviously there are other possibilities as well, I would not exclude that. The questions Mandel raised in chapter 1 of his dissertation Late Capitalism is "how can we relate the Marxian laws of motion of capitalism to the real economic history of capitalism?" and "why were the Marxists not very successful in relating these laws of motion to real history" but this obviously permits of many possible answers. Some Marxists argue there are no "laws of motion" but only one law of motion, e.g. the "law of accumulation". When Marx talks about economic reproduction, I think he aims in general to show, using the categories of Cc, Cf, V, and S how the capitalist mode of production can re-create its own initial conditions, and thus perpetuate itself and expand as a distinctive, relatively stable form of production. He attempts to show, among other things, that his categories are validated, because they can apply, at least in the pure case, both at the micro-level of the individual enterprise and the macro-level of many enterprises interacting. For that very reason, however, I think it is doubtful whether a crisis theory can be inferred from a reproduction scheme, the latter which obviously can involve a variety of quantitative and qualitative assumptions, and thus can only show various logical *possibilities* of critical economic disproportions. I do not think that in this analysis Marx himself specifies conditions for "equilibrium" at all. In a dynamic framework, we are dealing only with the fluctuations in relative growth rates of critical variables. Admittedly, Marx does say in TSV "But the crisis is precisely the phase of disturbance and interruption of the process of reproduction."http://www.marxists.org/archive/marx/works/1863/theories-surplus-value/ch17.htm But point is that many different possible (internal and external) factors could possibly interrupt or disturb the normal economic reproduction process. So, as regards "crisis theory", I think it would be helpful to distinguish theoretically more precisely between: (1) Arguments about the possibility of economic crises (2) Arguments about the necessary occurrence of economic crises (3) Arguments about the periodicity or (more or less regular) recurrence of economic crises (4) Arguments about the root causes of economic crises (5) Arguments about the immediate "triggers" of economic crises (6) Arguments about the general character of capitalist crises, versus specific crises (7) Arguments about what is unique about economic crises in capitalism, versus other modes of production (8) Arguments about the political implications of different explanations of economic crises (9) Arguments about different kinds of economic crises - conjunctural/cyclical downturns, recessions, and real economic depressions (10) Arguments about the perception of crises, versus the objective reality of crises As regards Grossman, who doesn't always identify these very clearly, I think he distinguished between the "tendency towards breakdown" which he tries to derive from the reproduction schemes (a tendency towards the overaccumulation of constant capital in production, meaning insufficient surplus value produced to valorise it) and specific crises which result in attempts to restructure capital assets in such a way that expanded reproduction is restored. Grossman's "tendency towards breakdown" is permanent, insofar as, in the long run, increases in labour-productivity must result in lowering the profit rate. Periodically or episodically, this results in crises, bringing into play various factors or changes which restore profitability, without however cancelling the breakdown tendency, which persists and eventually recurs on a larger scale. Point is, that argument can be made without referring to the reproduction schemes at all, simply by looking at how the relationship between core variables (such as rate and mass of surplus value, rate and mass of profit, capital composition, capital turnover, rate of accumulation by sector, relative growth rates of different sectors) actually works out in real economic history. In any case, what I think we cannot deny is that economic growth produces more and more durable assets which exist external to the sphere of production, which can be traded, and thus can be a source of capital accumulation. Thus, I think in considering the capital accumulation process *as a whole*, it would be wrong to focus only on what happens to production. This critique of Grossman's schema is different from Trigg's - it focuses on the asset question, rather than the monetary question. The inimitable Mark Weisbrot suggested a couple years ago that in the US, the hike in real estate prices since the 1980s had created at least 3 trillion dollars worth of extra capital, at least on paper. That is not small money, and a good part of it fuels the import of real wealth that adds to assets which can be traded and accumulated. He suggests that this capital is likely to be wiped out within a few years as the housing boom moves to bust, but most probably I would say it is likely to be a more gradual process (except if some critical event causes a financial panic). Jurriaan
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