replies to Rakesh, Wojtek, Charles, Chris Anarchism / Marxism debates

Rakesh Bhandari bhandari at phoenix.Princeton.EDU
Sat Aug 21 10:25:52 PDT 1999



>We'll have a better idea in
>the next recession, if we ever have one of those! You doubt the
>profitability upswing, underway since 1982 or so?

Don't deny it at all. The interesting question is the methods by which it has been accomplished.

*Centralisation--the reorganization of existing capital assets (at record

heights in recent years). *Intensification--reduced downtime, speed ups, better surveillance (inc. in

relocated, outsourced factories) *Unequal terms of trade with commodity producers (collapse of the NIEO project) *Interest rate reductions in recent years due to capital inflows (as you have

underlined several times) *artifical demand stimulus from an unsustainable extension of consumer credit *Restructuring--in particular, the reorganization of the US mfg structure

such that it has been streamlined, albeit with a higher content of knowlege-

intensive capital goods (esp. as a percentage of exports); though such capital

goods business is quite unstable (see the work of James Galbraith).

In the last case profitability has been restored at the expense of exposing the industrial structure more fully to a deep cyclical global downturn (if capital good orders are indeed hit the hardest and first in a deep downturn). The first three are classic reactions to a falling rate of profit (see Grossmann) and the third is a conjunctural advantage the US economy has enjoyed at the expense of the world. The fourth will prove to be as damaging on the downside as it has been helpful on the upside--again as you have argued.

Yours, Rakesh



More information about the lbo-talk mailing list