1. It is a tremendous research effort. Michael P is correct the description of the Japanese model is tight and illuminating. I think an interesting comparison could be made to Cosas Lapitivas' analysis of the same in a Capital and Class article from last year.
2. Jim D is correct that Brenner's excellent historical account of the early defeats of US class struggles unequivocally demonstrates that the Golden Age, putatively made so by Keynesianism, was no such thing. Very illuminating. Brenner's thesis that the intensification of American class struggle was brought on by Japanese and German competition following upon the globalization of trade is controversial though. Moreover, I wonder whether we could disaggregate American mfgs to see if certain industrial sectors were rocked more by international competition than others; Galbraith's evidence of the strength of certain knowledge intensive capital goods industries suggest that there may be something here. If this is so, then the key to renewed profitability may not be the elimination of high cost enterprises but whole uncompetitive branches of mfg--leading to a structural transformation of the industrial landscape.
3. Brenner does make the distinction later between the real ouput-capital ratio and the nominal output capital labor ratio in order to save his overproduction argument. The falling rate of profit argument of course refers to the latter but Brenner did not make that clear in the beginning of his argument. That's what threw me off.
4. I was wrong to suggest that Brenner did not examine Marx's central contradiction between exchange value and use value. There is confusion in his conceptualization of the output capital ratio based on a failure to make that distinction--rising use value outputs in inverse movement with falling unit values. But his whole crisis theory is based on the dual character of fixed capital--as use values which have lost their exchange value due to the introduction of cost cutting technical change.
5. I was also wrong to suggest that Brenner's argument is similar to Makoto Itoh's. The latter argues that profitability is brought down as capital-widening accumulation begins to absorb the reserve army of labor and induce a wage squeeze; Itoh then argues that after fixed capital is devalued in crises, firms then introduce cost-cutting, capital intensive technical change which though compounding the unemployment problem at the moment of crisis does serve to restore profitability. Brenner does cite Itoh, and both agree that scrapping can reinvigorate profitability but for Brenner profitability is not brought down by Itoh's overaccumulation vis a vis the existing labor supply but by what he theorizes as overproduction (cost cutting technical change bringing unit values down to the point where the high cost producers can no longer make an average rate of profit at prevailing prices--which in some ways is only how the falling rate of argument appears if we descend to look at many capitals in the realm of comeptition, Brenner may be more of a fundamentalist than he realizes).
At any rate, both theories are different than Mattick's overaccumulation theory (the overaccumulation of constant to variable captial from which sufficient surplus value cannot be extorted for further profitable expansion) and Sweezy's overinvestment theory based on underconsumptionism. I still think Mattick is right and suggesting the argument is fundamentalist while dismissing it incomprehensibly as Malthusian and then edging towards it anyways does not help the debate.
6. Just as Schumpeter thought of depressions as douches by which the capitalist system cleaned itself out for renewed health and prosperity, Brenner locates the absence of a douche as the central problem. He writes:
But while the growth of debt...was helping to stave off depression, it was also slowing down that recovery of profitability which was the fundamental condition for economic revitalization. What the advanced capitalist countries needed to found a new boom was a rollbackof that redundant mfg capacity and output which had resulted from the intensification of international competition and which had been made all the greater by debt creation--specifically the elimination of that great ledge of high cost, low profit means of produciton which stood in the way of the recovery of the aggregate rate of profit in mfg. The series of severe recessions that occured form the end of the 1960s through the early 1990s constituted the world economy's main instrument for accomplishing this task, and they certainly did something to wipe out redundant productive capacity. But the increased demand created by rising debt tended to cut short the processes of estruction unleashed by recission, and more generally to soften the impact of comeptition. Higher cost/lower profit firms were thus able to long occupy economic positions that could, in the abstract, eventually have been assumed by more productive, higher profit, and more dynamic enterprises. But allowing the less productive, less profitable firms to go out of business by letting the business cycle take as a natural course would very likely have turned thelong downturn, whith its relatively serious but nonetheless limited recessions, into outright depression. Simply put, the preconditions for restoring the system to health was a debt-deflation, leading to what Marx called a "slaughtering of capital values.' But since the only systematic way to achieve this was through depression, the only real alternative was continuining debt expansion , which contributed to both stagnation and financial instability." (152)
Great stuff on the centrality of public and private debt in forestalling scrapping. Michael Perelman has long made this central to his dynamics.
Now I have more than quibbles with Brenner's interpretation here.
1. Brenner makes it seem that if a depression (if politically tolerable) would finally induce enterprises to scrap their oldest vintage, high cost plants and bring on new low capacity. But the key to depressions is that they destroy rival enterprises altogether--that is, they induce the centralization of capital. For all his emphasis on competition, Brenner slides into the neoclassical world here. The profitability of stronger enterprises is boosted by the cheapend capital assets they pick up and the higher rate of exploitation workers are willing to accept; the market share they win then induces them to undertake the large scale investments by which unit costs can be reduced and profitability restored (see Mattick, Moseley, Carchedi). Which is to say that any renewed accumulation begins with a more centralized capital on a WORLD scale and therefore with a larger reserve army of labor on a WORLD scale.. Capital is not capable of generating general prosperity on a WORLD scale even if it overcomes the falling rate of profit; the system will generate absolute misery on a WORLD scale at ever higher levels, no matter whether the rate of profit or accumulation, be high or low. The system must be destabilized and overthrown. But Brenner can't get himself to say that. Too bad. That's why I read Mattick--he was one fearless, Marxian thinker.
2. Compounding the problem of unemployment within the US is that the new low cost capacity will tend to be set up more and more abroad, though profits of course will be repatriated. Galbraith shows this to be in the case of the consumer good branches of mfg.
3. Brenner does not explain here why ever more severe recessions are needed to induce scrapping. Why must they take on the proportions of depressions? There is no theoretical clarity here on exactly why the theory of ever widening and deepening crises is indeed true. John Weeks from whom Brenner draws does provide some foundation but it desperately needs to be elaborated.
best, rakesh