From: Dogan Goecmen (Dogangoecmen@AOL.COM)
Date: Wed Nov 29 2006 - 06:11:42 EST
In einer eMail vom 28.11.2006 14:42:22 Westeuropäische Normalzeit schreibt Gerald_A_Levy@MSN.COM: Hi Dogan: The belief that capitalism is inefficient and irrational is implied by mainstream economic theory. Consider a production possibilities curve for the macroeconomy. Label the axes 'guns' and 'butter' if you like. On the production possibilities curve, all resources (land, labor, capital) are being fully and efficiently utilized. If there is unemployment, however, then it necessarily follows (within the context of the PPC graph) that the economy is not on the curve itself (rather, it is to the left of the curve) and is therefore *not* fully and efficiciently utilizing all available resources because it is not fully and efficiently utilizing all *labor* resources. To the extent that one could claim that there is a structural association between periodic unemployment and capitalism, one can conclude -- *using only mainstream theory!* -- that capitalism has an element of inefficiency and irrationality to its operation. This is a point which is often overlooked by mainstream economists themselves. (The more important point here, though, is not that capitalism is inefficient but rather that the concepts associated with mainstream theory -- in this case, opportunity costs, scarcity, choice -- are not capable of fully grasping the dynamic of capitalism.) Jerry, thank you for pointing that out. But I think that mainstream economic theory does not explain why the system works inefficiently and irrationally. It ignores the very structural problems behind it. The point I am trying to make is this: capitalism cannot work otherwise than it works. So the correction of the dirction of production is not a matter of individual and subjective decission making, and minor changes in the direction of the ends of production under capitalist conditions. This is an old dilemma. Lets take for example Keynes. In his General Theory, he explicitly says that the fact there is unemployment does not suggest that the direction of production is wrong. I think any mainsteram solution to the problem of unemployment does not go beyond this assertion of Keynes'. Classical political economy goes much beyond this, It points to structrual problems. Especially Smith championed the idea that the work should be distributed among all people able to work. This implies cutting work hours and distributing it eqaully. This is why classical political economy deserves to be called scientific in Marxian words. In reply to Martin, you wrote: > From the entrepreneurs point of view it does not matter whether > there is unemployment. I strongly disagree: whether there is unemployment or not has huge consequences for individual capitalists. Putting aside the issue for now of demand-effects, if there is unemployment then capitalists will be in a stronger bargaining position to get wage-workers to work for lower wages and benefits, increase the length of the working day, increase the intensity of labor, etc. I agree with everything you say here. Anybody who read something on the role of reserve armee by Marx should know that. The point that I was trying to make is this: individual entrepreneur is above all concerned about using its full capacity of production as much as possible with as less work force as possible. Individual entrepreneur does not say 'now I am going to produce so and so many' unemployed people. He is by force of competion merely concerned about the ration of constant capital to variable capital. Unemployment is not his/her conscious intention. Rather it is an outcome of the functioning of the overall structure of the production in capitalist society. In solidarity, Jerry
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