o'connor on crisis theory, etc.

Barbara Laurence cns at cats.ucsc.edu
Mon Nov 30 14:36:14 PST 1998


Rakesh:

Thank you for your thoughtful comments.

Here are a few replies.

1. Disproportionality doesn't have to do only with the anarchism of the market, but also with the exploitative character of the production relations. When Dept I with its relatively high C/V expands faster than Dept II (as during for example a bout of "accumulation through crisis"), more relative surplus value is produced (whether it's realized or not). Cet. par. this increases the danger of capital overproduction. This is true by definition and has nothing to do with FROP. And it is caused by capitalist production relations.

2. We mustn't confuse what Marx meant by "crisis" phenomena that we care to call "crisis," e.g., world economy today may be in general crisis, maybe not; certainly there is a terrible regional crisis in Asia. What does Marx have to say about spatial manifestations, etc., of crisis?

3. I fully agree that consumption (C) is the passive variable in any Marx-type model. I.e., that C=C(a'), where a' is the rate of accumulation. But modern csr credit, mortgage credit, etc., can make C into a more active variable, as it has been with the huge rise in stock prices which have apparently pushed the propensity to consume to one and even more.

3A. In orthodoxy, it's certainly true that the absence of accumulation produces an insufficient effective demand, not the insufficiency of demand that causes a decline in accumulation. This formulation is a great leap forward against bourgeois economics in which "production is for consumption" and all that. But it is one-sided. Insufficient demand caused by a rise in C/V (assuming the unit value of both C and V = k) is quite possible without a FROP (which presupposes that the unit value of C falls faster than that of V, which may or may not be empirically true).

Generally I learn from Marx that the problem of capitalism is the contradictory unity of production and circulation, which means in sociological terms that capitalist production relations favor capital in the workplace while they favor labor in the supermarket (where each capital tempts and begs the worker to buy back his own product). It is known among social psychologists that this (and other such contradictions) produce stress, cognitive dissonance, etc.

4. I don't believe that I ever said or wrote anything to the effect that "orthodox Marxists ignore realization difficulties." So you must be talking about someone else.

5. You think there hasn't been a consumption binge. Look at consumer/mortgage credit and debt; look at personal bankruptcy; look at data on savings ratios and the propensity to consume. Of course c. 1/3 workers consume less and get into more debt; 1/3 consume a bit more and get into debt; 1/3 consumer a lot more, and also get into debt.

6. I fear you don't get my point re: Marx's categories being economic and sociological, quantitative and qualitative. A rise in S/V is not the condition and real premise of class struggle. A/V as such is. A rise in S/V is a sign that labor has lost! A fall in S/V may be associated with more class struggle than a rise in S/V, if workers are winning. A rise in S/V tends to counter FROP, as you say; in which case there is no contradiction between capitalist politics and economics. But a fall in S/V can (late 1960s, 1970s) mess up capital pretty good, just as can a rise in the costs of the elements of C and V (oil prices, the sociological side of which is the unity, temporary as it was, between the oil producing countries against the oil monopolies and "rich consumers" of the West). I refer you to the whole cost push lit of the 1970s, the Fiscal Crisis of the State, Accumulation Crisis, etc., etc. Real wages did rise faster than productivity for a while in some places. Workers struggle did make LP less variable capital. Etc. Clearly all crises must be seen as conjunctural, historical, the result in small or large part of the solutions applied to earlier crises, etc. No quoting Mattick Jr. and other Oracles not even Marx helps here.

Final note: I believe that the economic and the sociological sides of things articulate in complex ways to produce "change." Autonomous worker struggle, a sociological fact, can change S/V and all that, an economic fact. Vice versa is also possible. But one can't go from economics to sociology to get a theory of change; nor the reverse. I firmly believe we have but poor theories of change because economists tend to read off change from their equations while sociologists of the class struggle school tend to do the opposite. Neither alone makes sense to me. There's no way to say anything sensible about "reality" at the level of abstraction on which crisis theory is usually discussed. Accumulation Crisis goes into these problems, at times crudely, I admit. Best wishes, Jim O'Connor



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