Re: [OPE] capital's roads to recovery?

GERALD LEVY wrote:
>
> There is much debate in the inner circles of capital and the state about
> possible ways to get out of the economic crisis. But, what do Marxists
> - from different theoretical perspectives - have to say in reply to
> that question?
> [...]
>
> Can what has been successful in the past again be successful for
> capital today?
> Or, is there something about the current crisis which suggests that
> the old routes
> to recovery will be obstructed and impassable? If so, can these
> bottlenecks
> be broken and, if so, how?
>
> So, what do you think? What are the possible ways in which capital _can_
> recover?
>

My understanding is that the issues for the advanced capitalist
countries are:

   1. Short-term, raising adequate demand.
   2. Long-term, raising productivity growth so as to compensate the
      effects of a stagnating workforce on the domestic product, and in
      the case of the US also to narrow the trade deficit.
   3. Long-term for the world economy, weaken the central role that the
      US economy plays in initiating global growth in favour of
      economies with a stable or growing productive sector.

I think (1) can be addressed in several ways: Lowering the debt burden
of the agents in the economy; full or partial nationalizations of banks
and large firms saddled with debt; public borrowing and spending in
through social transfers and public works. The capacity of nation states
to do so will also depend on the effects of global flows of financial
capital. Under the threat of capital flight, will states be able to take
coordinated action to contain it?

(2) is much more unpredictable because it rests on technical change and
application of innovations. This would require that a greater share of
profits are retained and reinvested rather than being confiscated
through interests and dividends. The effects of increased productivity
growth on the distribution of profit rates will also depend on how much
the investment share of profit rises. Alternatively, the advanced
countries could permit massive labour migration from the developing
countries provided it is employed in capitalist firms. The US could of
course also narrow its trade deficit by lowering its imports instead,
i.e. by lowering the material standard of living. But I'm not sure if
that would be viable.

If these issues are addressed I think capitalist firms and capital
accumulation can recover on a world scale. Moreover, there is still a
large pool of potentially cheap labour-power to be exploited and
therefore to rejuvenate capital for some time to come.

//Dave Z
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Received on Wed Jan 21 15:00:25 2009