I don't know why Jerry Levy didn't forward this from pen-l to
ope-l, but here it 'tis. I haven't read all of the ope-l missives
on this subject so I may be repeating what others have said, but
my position (which is only implicit in the forwarded message) is
as follows:
On the macrosocietal level (captured by national income accounts
and even better by Marx's value theory, as Alan notes), interest
income is simply one part of the surplus-value, a redistributed
part of the surplus produced by productive workers. On the
micro-level, on the other hand, individual industrial and
commercial capitalists treat interest as a cost. This represents
a fetishized consciousness that is based (as usual) on real-world
phenomena (rather than being mere false consciousness or
delusion): individuals under capitalism do not view the world
through the lens of value theory, do not see the societal
totality for what it is. Since individuals have fetishized
consciousness, they also act on the basis of what Marx termed
"imaginary" concepts[*] such as the interest rate in their
strivings to individually appropriate surplus-value in the form
of profit. But these actions again and again run into problems
because they run into the constraints created by the generally
unperceived macro-societal capitalist system, i.e., the
socialized nature of the actual production of surplus-value.
This can be summarized by Engels' rubric (in SOCIALISM: UTOPIAN
AND SCIENTIFIC) of the contradiction between individualized
appropriation and socialized production.
[*] If one checks the reference, one discovers that interest is
"imaginary" to Marx only when he's at the high level of
abstraction of vol. I or vol. II of CAPITAL.
______________________________ Forward Header __________________________________
Subject: Re: The general (f)law of capitalist accumulation?
Author: James Devine at lmu-acad1
Date: 10/13/95 10:50 AM
Gil Skillman writes:>>In ... "The General Law of Capitalist
Accumulation," Marx asserts that the primary direct consequence
of the process of capitalist accumulation is to raise the wage rate.
The rest of his ... account is based on this premise: capitalists
respond by increasing the technical composition of capital, leading
contingently to the creation and preservation of an industrial
reserve army and (in Volume III) a tendency for the rate of profit
to fall.<<
Though I don't thing the FROP theory has very strong foundations,
it also is based on Marx's analysis of production (especially K1, ch. 15)
and on the competition amongst capitalists. It's true that authors such
as Maurice Dobb emphasize the role of labor-power scarcity in inducing
a rising technical composition of capital, but there's more to Marx's
story.
BTW, the wage squeeze on profits in K3 leads to a cutback in the
rate of accumulation (as in Richard Goodwin's famous model) in
addition to a rise in the t.c.c.
>>However, from Marx's account ... it is clear that interest capital
also presents itself to industrial capitalists as a cost of production,
in the form of the interest rate ... Then why doesn't the process of
capitalist accumulation cause the demand for interest capital to
increase along with the demand for labor power, leading to an increase
in interest rates and (following Marx's logic), a potential desire
among industrial capitalists to *lower* the technical composition
of capital?<<
Actually, Marx does talk about how when capitalist accumulation is
booming, it raises the demand for loanable money-capital and thus
the interest rate (cf. K3, ch. 22 and elsewhere).
Does this lower the desired technical composition of capital? It
depends on whether the t.c.c. corresponds to a high ratio of
fixed to circulating capital or not: it's possible to have a
high t.c.c. because capital is using a lot of circulating
constant capital rather than fixed constant capital. In other words,
high interest rates discourage fixed investment rather than the
use of dead labor in the form of raw materials produced concurrently.
>>And if there is such a desire, why isn't the general law ofcapitalist
accumulation that capitalist development creates anindustrial reserve
army of finance capital?<<
Marx does talk about how interest rates are really low in the
depression phase of the cycle (K3, ch. 30, p. 488f of Int'l Pub.
ed.)
>> And if such is the case, is there a corresponding tendency for
the real interest rate to fall to zero?<<
If the rate of profit falls to zero (as in the FROP), then the rate
of interest would also (since the former largely constrains the latter).
But in Marx's cycle theory of K3, the slowed accumulation of capital
eventually recreates the conditions for booming accumulation by
purging imbalances from the system (such as high wages), so that
eventually interest rates are pulled up again.
in pen-l solidarity,
Jim Devine jdevine@lmumail.lmu.edu
Econ. Dept., Loyola Marymount Univ., Los Angeles, CA 90045-2699 USA
310/338-2948 (daytime, during workweek); FAX: 310/338-1950
"It takes a busload of faith to get by." -- Lou Reed.