Re: [OPE] defining 'recession'

Thanks, Jurriaan. The two paragraphs copied (below) from your email are, roughly, my current interpretation also. A more precise empirical picture, though, requires a valid definition of 'means of production', therefore of 'production', etc - an issue that seems to follow me around.

Just one small but perhaps significant point. The term 'finance capitalism', in the classical literature on imperialism, was used in a narrower sense, more closely linked to material production. Hilferding's definition was 'finance capital is capital controlled by the banks and employed by industrialists'. But today a far greater share of the capital controlled by the banks is employed in anything but industry - perhaps a sign of the further expansion of capital external to production.

Paula
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Jurriaan wrote:

"This result is, among other things, that a mass of capital assets is created which exists external to capitalist production, and is indeed - in the developed capitalist countries - larger in value than the mass of capital applied in production. This means that we then have to deal with an enormous capitalisation of assets which do not consist of means of production, which begins to strongly influence average yields, since the yield from property begins to compete with the yield from production investment. In New Zealand, for example (as I mentioned) half the housing is now rented. Now obviously somebody owns that housing and makes a profit from it, that's capital accumulation but it has little to do with production other than house repairs.

That is basically the foundation of modern "rentier capitalism" or "finance capitalism" (whatever you might like to call it). If you analyse this, you obtain different results and predictions than Mandel does in his book "Late Capitalism" and in this sense I'm closer to Michael Hudson's interpretation. Had Mandel thought his own theory of surplus-profit (extra-Mehrwert) to its conclusion, he would have written quite a different sort of book. As it stands, he mentions "three main sources of surplus-profit" without even specifying clearly what they are - the concept of surplus-profit relates precisely to the endogenous and exogenous "barriers" to capital accumulation at issue, which favour some capitalists at the expense of others. There are three holes in that sort of analysis. But I don't think David Harvey fills them either.

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Received on Thu Dec 4 18:55:17 2008