Andrew:
>A brief reply to Paul C's ope-l 2528.
>
>Paul argues that, under private-property capitalism, "production for
> production's sake" does not occur. Production "is not an end in itself
> but ... a means to an end, - the appropriation of private profit." I
> suggest that Paul is confusing the motives of individual firms with the
> driving motive of the capitalist system as such. The latter was what I
> was talking about. The former is a superficial form of appearance of
> the latter.
Paul C:
To my mind this is an inversion of the real causality. There is no
'driving motive of the capitalist system itself', except as an idea
in the minds of Marxists, and our ideas have no causal effectivity.
We have to explain the behaviour of the whole system as the result of
the interaction of a mass of unco-ordinated private firms. These firms
are not forms of appearance of any more general idea, unless one is
to adopt a platonist ontology.
>To understand this, ask *why* firms desire the most "private" profit (BTW,
> what does "private" have to do with anything?).
Paul:
I mention private, because capitalism, as generalised commodity production
is characterised by socialised production but private appropriation.
>Is it to meet the
>consumption needs of the shareholders (or managers, etc.)? Or are they
> *forced* by something outside them to seek the highest profit rate in order
> to survive and thus to continue to personify capital? I think it is the
> latter--firms that fail to plugh back enough profit will go under, just as
> much as those that fail to receive it in the first place. So they are
> forced to accumulate.
Paul C:
This is a hypothesis. Where is the evidence?
What was the typical percentage of surplus value devoted to net capital
accumulation
in the US economy over say the last 100 years?
What was the percentage that was consumed unproductively?
If your hypothesis is correct, then one would expect net accumulation to
considerably exceed capitalist consumption.
>But for what reason? To expand consumption? No,
> Marx's schema of expanded reproduction show that accumulation occurs through
> the increase in production in Department I destined for Department I (Ic
> is an increasing share of the value of the total social capital). This is,
> precisely, production for production's sake. Consideration of mechanization
> makes this more true.
Paul:
This was a formal demonstration that expanded reproduction was logically
possible, it was not an investigation of what actually happens, nor, as
far as I am aware does it claim to be that.
>
>Now, of course, Paul is right that production doesn't rise on a smooth
> expontential path. For whatever reasons (and I think reduced expectations
> of profit is less significant than Paul does), they often cut back on
>production. But, first of all, by cutting back on production they are also
> cutting back on profits, so this proves nothing. Second of all, to say that
> the motive force of capitalism is production for production's sake is *not*
> to say that this motive force is not self-contradictory.
Paul C:
I am not happy with the use of the concept 'motive force', it is
a metaphor derived from aristotelean physics whose explanatory power is
unclear when applied to economic relations.
>Precisely because
> the motive is production of *value*, wealth in the *abstract*, not concrete
> products for consumption, capitalist production is self-limiting. Capitals
> are compelled to raise productivity and to mechanize, but this leads to the
> relative decline in new value, from living labor, as against old value,
> embodied in means of production (and gold, etc.). And this leads to crises,
> as I discussed in my recent reply to Duncan.
Paul C:
The mechanism that you describe may, at certain points in time have been
a contributing factor in recessions, but this would have to be established
by historical investigation. I think that Michael has produced some interesting
evidence that something like this may have been a factor in the Railroad crises
of the US in the last century, but an alternative interpretation of his data
would be that there was simply overinvestment in one particular branch of
production.
Paul Cockshott
wpc@cs.strath.ac.uk
http://www.cs.strath.ac.uk/CS/Biog/wpc/index.html