>Another book, not by me but by Sid Coontz, Unproductive Labor and Effective
>Demand, is an underground classic and well-worth a radical economist's time
>and effort. It presents convincingly a disproportionality theory of the
>gathering crisis of the 1920s-1933. Too much value producing capacity
>relative to demand appeared, Coontz argues, not because of overproduction
>per se but because capital intensive Dept I increased faster then
>(relatively) labor intensive Dept II. I note that this book is not on Jim
>Devine's otherwise very helpful bibliography (in his "Causes of the 1929-33
>Great Collapse).
I don't really follow this argument at all (I have tried to follow Coontz's argument as well as your reference to and James F Becker's defense of Coontz in JB's Marxian Political Economy--an outline). I don't doubt the soundness of what seems to be the general idea: it is not enough for the money total of current demand to equal the price value of current output; it is also necessary that the direction of the various 'sectors' of demand and supply coincide, so that there can be trouble if the pattern of outlay and patern of production do match even if aggregate money totals are the same. I see that Coontz wants to correct aggregate thinking.
In particular, he wants to argue that the deflationary Great Depression was set off by greater investment expenditures in the consumer goods sector than there enterpreneurial and worker consumption expenditures in department one--is that different than what you understand? It seems to me that Coontz wants to underline that stagnation in the capital goods industry was the principal problem (the best evidence seems to be Louis Corey's). But I don't follow his explanation for this sectoral stagnation, nor his critique of Keynesian remedies for it.
I should understand Coontz's argument better since he seems to be a fan of Grossmann and my other hero William J Blake wrote the intro to the book. And it has been years since I first gave it a crack, but maybe I would understand it now.
For example, what is Coontz getting at here: "P/O=1-(C/O +L/O), where P/O is the share of profits in output (income), and C/O and L/O are the capital-output and labout-output ratios, respectively. Now Kuznets' data shown a fall in the capital-output ratio and a rise in the capital-labor ratios, respectively
for the 1919-1929 period. Thus dO/O>dC/C>dL/L, therefore both the capital-output and labor output ratios, fell, hence the rise in P/O." (p.153)
But, as Mark Blaug noted in his review, it seems that this is in different dimensions. As I suspect there is in Brenner's anti "Malthusian" critique of the orthodox FROP argument, the value and technical dimensions are being confused here. That is, P/O refers to the share of money profits in the value of output, whereas C/O and L/O are defined as technical input coefficients and Kuznet's data refer to both C/O and L/O in real terms where C and O are measured in *constant* prices and L is the *volume* of employment. Moreover, a declining rate of profit to the extent that it induces the centralization rather than the accumulation of capital, i.e., the reorganization of existing assets, will boost the profitability of the surviving capitals and therewith the P/O ratio, But a rising P/O ratio does not mean that the rate of profit on total capital in value terms has not fallen, right? The empirical confirmation of the latter would be the actual stagnation in accumulation, no?
But my head just spins on the the relation between the value and real dimensions of the accumulation process.
>As some of you folks know, I'm of the school that rejects "economic"
>categories when and if they don't do double-duty as sociological
>categories. That is, theoretical categories must be both
>quantitative/economic and qualitative/sociological. This is why S/V is the
>central category in Marxist thought. It is a quantitative measure of the
>potential (or not) of the system to suffer a realization crisis; it's also
>a qualitative measure of capital's power over labor. The greater the latter
>(e.g., since late 1970s in the US), the higher will be S/V hence the
>greater the problem of realizing value (solved in the 1980s by military
>spending and hyper-consumerism and in the 1990s by hyper-consumerism (even
>more than the 1980s) and exports (mainly).
I don't think there is much evidence that the working class has been on a consumption binge, though the turbo charged installment buying of credit card debt has enabled a continuation of past standards of consumption. Plus, as Moseley shows, the rising S/V must not only offset upward pressure on the OCC but the incline in the unproductive/productive labor ratio.
But yes, a rising S/V or rate of exploitation is both an objective counter tendency in quantitative terms to the falling rate of profit (that's how it appears in capitalist terms) and the condition and real premise of the class struggle, i.e., of the clash at the political and subjective level. If you understand the S/V in terms of a realization crisis and the breakdown therefrom then you are left with a mechanical theory of collapse at the moment you run out of export markets. This fatalism was Luxemburg's problem though it is often attributed to Grossmann who drew out the implications of a rising S/V in terms of the constitution of the class struggle within the abode of production.
And now for a general reading note to anyone interested:
This dual nature of the categories of Marx's *Capital* has been brilliantly explored by Lucio Colletti, The Theory of The Crash, Telos, no 13, Fall 1972. (too bad it was not included in his From Rousseau to Lenin. MOnthly Review. 1972; this essay contains a brilliant critique of the Hilferding/Dobb/Sweezy misinterpretation of the law of value as an equilibrium mechanism, later developed by Moishe Postone; and what Colletti has to say about the reduction of value to a mental generalization by Sombart and Bernstein speaks to the deepest and most profound questions in Marxian theory).
yours, rakesh