An Anglo-Saxon marxist, William J Blake concluded a mid-1960s unpublished
mss with eleven questions for future Marxist theoretical and empirical
work. Last week Jerry reposted the first five questions [OPE-L:2998]
which I had submitted to another line a year ago and requested that I post
the remaining questions. I apologize for the delay.
Rakesh Bhandari
Grad Student
UC Berkeley
These six questions take up the following topics:
VI government spending and taxation ;
VII fictitious capital, luxury spending, stock market panics
VIII FROP, speculation and stock market panics
IX. ground rent, real estate booms
X. implications of automation
XI. implications of resource depletion on FROP, depreciation and capital export
VI. The 20th Century has been characterized by a rise in government
spending as a proportion of national income that has no parallel even in
Napoleonic Wars relative to the then production. It is no so much a matter
of the National Debt that weighed as heavily on Britain at Waterloo as it
does now. But taxation is today so much greater than in 1900 as to be of a
different quality. If it basically comes out of surplus value, is this an
aggratvationof the tendential fall in the rate of profit, an
intensification of a basic trend? If it comes partly out of the cost of
labor power, as in consumer goods, does that further act as a pressure on
surplus value. But does it really mean largely a transfer from one class
of capitalists to another? In so far as military expenditure requires
production production, there are more profits to be made by capitalists
involved in armanents and their like; an ddoes this profit mean that the
average rate of profit is not diminished by taxation, but is simply
redistributed between sections of capitalists? And does the demand for
commodities by the workers who are engaged in these pursuits (those who
produce neither production goods nor consumption goods), act as a stimulus
to the production of consumer goods, thus increasing employment in these
fields? The last suggestion is fraught with difficulties and
contradictions; the query still remains, in Marxist terms, what is the
maning of taxation as it affects the accumulation of capital, whether as
rate, mass or distribution? What is the effect on the two departments of
production? In the case of constant capital, does it affect the proportions
of fixed and circulating capital? That is, what is the effect of the vast
expenditure in armaments factories on the demand for machinery and raw
materials?
VII. Although stock exchange prices are a consequence and not a cause of
industrial profits, the fact is that these fictitious forms of capital have
a temporary effect on demand. Tourists from the United States, for example,
spend their paper profits in Europe in exchange for real goods and
services. The overspill of speculative pfotis for a time, as Marx pointed
out, leads to a demand for luxuries. The investment in luxury
installations is characteristic of such epochs. The demand for expensive
consumer durables is typical. A great part of this demand does not
originate in profits in real production, or even in distribution, or in
compensation for services; but almost literally out of thin air. To what
extent, then, does the expenditure of the sums, either based on sales of
stock at a profit, to another speculator, or on loans based on the hopes
that there will be such a profit, contribute ultimately to the sharpening
of a crisis?
VIII. In Marxist terms, the tendential fall in the rate of profit must
bring with a tendency of interest rates to decline; since interest is a
portion of profit. Yet in periods of speculation, interest rates tend to
rise, although the increase of profits is relatively modest. This can only
mean that the reward of money-capital increases a tthe cost of productive
profit. Does this temporary rise in the return on money as a ratio to
profit, act as an indicator that capital finding its reward in production
insufficient in the case of new capital advanced, turns to speculation? For
example, if a compnay pays a profit of 100n its investment, it still may
be true that further does of capital may yield almost nothing. Is it
possible then that the less the possible rate of return on new capital in
industry, the more it seeks profit possibilities in conjecturing that the
profits will rise, that is pays more shares of stock, although its own
behaviour clearly shows that the outlets for more profitability are not
there? Is this contradiction between the profits possibilities in industry,
which are limited, and those in speculation, which is hectic, the
underlying cause of stock market panics? In that case, whatever the outward
show, the real basis is what Marx says it is, the lesser rate of profit in
that basis of everything, the production of commodities.
IX. To what extent does ground rent act as a brake on accumulation of
industrial and commercial capital? Since it is a pure deduction, in plain
words, an appropriation, its economic effect on accumulation is always
serious. But when there is feverish demand for factory sites and for
commercial use off space, and space for administrative use, as in the
skyscrapers devoted to the auxiliarly forms of economic activity, in such
things as advertising and other parasitic employments, what is the effect
of high ground rent? If the advertising compnay is a drain on surplus value
to begin, is anyting lost to the productive capitalists by its further
division by the advertiser with the ground landlord? Is it then the effect
of ground rent on the primary obtaining of surplus value in production that
alone has an effect on accumulation since the producers part with the rest
of the sur;us value to non-producers any way? Further, does ground rent,
which when capitalized leads to a real estate boom, and iis itslef a source
of bank credits and speculative issues, accentuate financial difficulties
when primary production ceases to be profitable. This thesis of such
economists as Henry George deserves examination not in its own terms, which
are naive and mistaken, but within the framework of the marxist analysis of
absolute and differential rent.
X. Automation is an extension of machinery of a different nature from teh
concrete analysis given by marx in his specific studies of motor-driven
machinery and tis relation to labor process. But as Marx dervies his theory
of value from teh mass of commodities resulting from social labor, the
query arises whether the new type of mahicnes, with a new quality, might
not require an analysis on their own. Are they simply intensifications of
the need to increase the ration between constant capital and variable; and
hence striking evidence that Marx had been vindicated beyond his own
dreams? Or do they economize living labor in the production process to such
an extent that the number of workers in production, compared ot those in
derivative employments, will so greatly diminish as to change the nature of
class distribution? Also, if automation is extended to the clerical class,
who constitute along with those in retailing the bulk of persons not in
production itself, the the increased production due to automation at the
source would not require a comparable increase in those engaged in
distribution or in finance employments. Would this increase mass
unemployment that could find no relief in any economic activity, thus
creating a permanent industrial reserve army, far exceeding anything in
present Marxian analysis? Would this be so great compared to productive
labor that its pressure on wages would be incomparable with the present
function of such an army? In a sense all these queries vindicate Marx as
never before; but their character and have not been sufficiently analyzed
in pure economic theory. Mosts discussions have been rhetorical or
sociological.
XI. What is the effect of the erosion of soil, the destruction of timber,
the exhaustation of mineral ores and the like on the nature of profits?
Apart form the social production in which profits are made out of the
current employment of labor, there are profits that arise out of the
depletion of assets. These are carried on books as a genuine profit,
though they really represent a loss of capital They are not a source of
surplus value, since that arises out the employment of owrkers engaged in
chaing the shpare of these raw materials. To what extent then, have the
real profits of industrial cpaitalists been less than they appear to be? If
the loss in assets is reckoned in, is Marx's thesis of a tendetnial fall in
the rate of profit intensified? Does the investment in sources of raw
materials abroad, to compensate for losses at home, indicate that the
export of captial is not always a result of insufficient surplus value, but
a net deduction from capital assets? It is true that the most companies
allows for depletion in their accoutns, sespeically since this helps with
taxation; but depletion in accounting and in economic analysis are not
always congruent. At any rate, the query as to to the export capital and
its nature remains. What part of its inot a net export of profit but a
compensation for depletion?