More Grossmania

Rakesh Bhandari bhandari at phoenix.Princeton.EDU
Sat Oct 31 23:54:59 PST 1998


With all due respect, Patrick, your characterization of Grossmann's theory as an example of a "monocentric" understanding of the accumulation process is nonsense.

Now, if by the displacement of crisis you mean the counter tendencies to the fall in the rate of profit--the big idea Marx took over from John Stuart Mill for whom the export (or displacement) of capital was perhaps the most important form--then I shall reiterate again that no thinker has gone to the trouble of enumerating and analyzing more counter-tendencies than Grossmann. One could argue that Schumpeter analyzed them under the rubric of Innovation, however.

What you are calling displacement here Grossmann analyzes in over 300 pages. Moving the crisis around through imperialism in particular makes up over 100 of those pages! However, Grossmann emphasized that the theory of credit is what Marx had not lived to complete. Tugan Baranowsky had already built credit into his crisis theory and throughout his magnum opus Grossmann emphasizes that credit accelerates the development of the productive forces and exacerbates the severity of the crisis cycle.

At the same time, Grossmann carries out a polemic against Hilferding who sought to replace the workers' direct struggle for control over the means of production with the struggle to wrest control of the means of credit through the nationalization of banks via a patient and gradual parliamentary-legal struggle in a growing (sic) economy; moreover, Grossmann attempted to show the limits cheap credit money faces in stimulating accumulation.

As for speculation, that is built into the core of Grossmann's profit shortage theory and given its place in his outline of the stages of the crisis cycle.

Of course by no means did Grossmann analyze comprehensively the debt structures of firms in the course of accumulation (the Minsky problem), much less the effects of government deficits/debt on capital formation and the stabilization of the crisis cycle (the Keynesian challenge). In the US today, the post keynesian crowd remains convinced that the fiscal card can still be played in the next deep recession/depression (see Michael Meeropol, Surrender. U Michigan Press, 1988), though interest payments have remained at 14% of the budget this decade despite our being in a business cycle upturn while budget surpluses have required for their realization savage cuts in spending; the govt debt only stopped increasing as a percentage of GDP in 1995 (Max will confirm), and the next downturn will enable the resumption of that upward incline.

Nonetheless, the left keynesians remain convinced that the debt loaded govt can still spend, spend and spend its way out of crisis without encroaching upon private investment and surplus value and without run away inflation. The belief that that there is a govt panacea waiting to be taken if we can only elect the good doctors necessary through good citizen electoral means is quite psychologically comforting; indeed it provides the same psychological comfort that Hilferding's catastrophically wrong advocacy for a peaceful electoral struggle to legally nationalize the banks through parliamentary majority gave to those haunted by the specter of direct workers' struggles over control at the point of production in violation of the sacred laws of property.

But in history it was the Otto Bauers and Rudolf Hilferdings who won out, not the council communists (Korsch, Pannekoek, Holst Roland, and Gorter), the left Austro Marxists like Max Adler and the Henryk Grossmanns. The Marxism that has survived in the academy and the bookstores walks in the footsteps of those who led the working class movement to annihilation.

I haven't yet read Leo Panitch's End of Parliamentary Socialism, but that's a nice title, no?

Why the post keynesians think they'll be able to get their fingers on the purse strings (or the fed) is actually a psychological riddle. At least Hilferding was the finance minister; leftish keynesians--Galbraith, Palley, hell even Blinder was put to the side--haven't been anywhere near power for at least 20 years. But they still hope and want us to hope with them that they will inherit the state and implement stabilization and justice. Frankly, it's a bizarre faith, and it's simply absurd to witness the revival of social democratic ideology in the academy and in The Nation without even a working class movement.

At any rate, I agree that Grossmann did not analyze govt debt, but of course Mattick did.

Marcuse's relationship to Grossmann is difficult to understand On the one hand, he approves of Horkheimer's criticism of Grossmann's orthodox Marxism (Horkheimer also refused to publish Grossmann' book on dynamics and Mattick's study of unemployment in the US); on the other hand, he lauds Grossmann's big book in his own Reason and Revolution a few years later as the most important interpretation of Marx's theory of accumulation and crisis. And then on the one hand, Marcuse praises the critique by Paul Mattick, Grossmann's student; on the other hand, neither he nor his disciples respond to it.

good nite, rakesh


>neither really getting to the point made a moment ago (by Tom?, can't
>remember) about the ability of global economic managers to *move the
>crisis around* through space and time (and psychological bluster).
>The latter phenomenon -- space-time displacement of capitalist
>crisis, only to find overaccumulation/financial speculation bubbling
>up somewhere else -- is, for me, at least, the late 20th century
>innovation that both H and G should have been capable of reading out
>of deep Marxist theory, but didn't. Both had monocentric
>understandings of the accumulation process, in rather different ways.
>No?



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