Re: [OPE] "lies, damned lies, and underconsumptionist statistics"

You have to bw vey carefully to avoid double counting with financial assets. If you include both residential property and mortgage loans then that would surely be double counting.

--- original message ---
From: "Jurriaan Bendien" <adsl675281@telfort.nl>
Subject: [OPE] "lies, damned lies, and underconsumptionist statistics"
Date: 25th September 2010
Time: 11:28:11 am

The funny part about the Marxist-Humanist anti-underconsumptionism is where
it says "The Persistent Fall in Profitability Underlying the Current Crisis
by Andrew Kliman, BUY NOW" :-)

As for myself, I wouldn't deny that there is a longterm tendency of the
average rate of industrial profit to decline, which leads directly to
economic concentration. However, as I've argued on OPE-L many times, if, as
is the case in the US, the capital assets tied up in non-residential plant
and equipment plus inventories (production capital) represent at most only
about a quarter of the total physical capital value in the US economy, and
perhaps 10% of the total capital assets (physical +financial assets), any
explanation of economic crises which bases itself exclusively on trends in
physical production capital is simply myopic.

The "classical" theories of capitalist crises developed in the first three
decades of the 20th century were all based on the idea that the imbalanced,
spasmodic development of capitalist production creates disproportions in the
economic reproduction process which at some point become unsurmountable. The
disputes then concerned which disproportions were of critical importance.
Possibly the most interesting idea was Henryk Grossman's theory of a capital
reproduction process which leads inevitably to an aggregate rising OCC and
an aggregate falling rate of profit.

But as Roman Rosdolsky pointed out, the reproduction schemes were never
intended by Marx as the basis of a theory of crises, other than the
description that crises signify a disturbance or interruption of the normal
economic reproduction process. At best they state the minimal preconditions
for economic reproduction by means of capital accumulation; depending on
what numbers we assign in models to capital compositions and sectoral
proportions, we can compute all kinds of results.

Ernest Mandel also pointed out that you cannot have underconsumption without
overproduction or excess capacity, and you cannot have overproduction of
commodities without overaccumulation of production capital; all these
factors are related, and the challenge is to show how they are related. You
have to distinguish between the "triggers" of the crisis, its observable
manifestations, and the deeper causes.

My own contribution to that debate, which I've stated numerous times on
OPE-L, is to point out empirically and theoretically - also, actually,
following Marx's own text - that the accumulation of physical industrial
capital does not equate to total capital accumulation: it is, in developed
capitalist countries, only the minor part of total capital accumulation. And
therefore I think all the classical Marxist theories are flawed, because
they all focus only on one part of the circuits of capital, rather than the
total circuits. In other words, economic reproduction by means of capital
accumulation does not concern only the enlarged reproduction of productively
invested capital, but also the enlarged reproduction of non-productive
capital assets, and the relationship between the two.

The Marxist theoretical myopia reaches its culmination in the Brenner
thesis. As Anwar Shaikh puts it: "Central to Brenner's thesis is the claim
that the fortunes of US manufacturing in the period from 1965-73 determined
the subsequent economic health of the whole advanced world. But, in those
times, US manufacturing accounted for about 25 percent of US Gross Domestic
Product (GDP), and a mere 12 percent of the advanced world's GDP. Yet,
according to Brenner, this one sector was the lever which moved the world.
The central theoretical question, of course, is how this could possibly be
so?"
http://homepage.newschool.edu/~AShaikh/Explaining%20the%20Global%20Economic%20Crisis.pdf

Jurriaan

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Received on Sat Sep 25 06:51:45 2010