Now by contradictory unity, I only meant to raise in a windbaggish way the question of how is it that a larger mass of commodities is saleable after the crisis in which there was an inability to sell all the commodities that had been produced. Meant only to suggest that in one theory Marx was able to explain not only this apparent contradiction but also its necessary recurrence in capitalist development. It may be the only theory we have that still does both.
I think Schumpeter would have agreed with Hayek on the dangers of inflating the prices of consumer goods through the injection of mass consuming power. But Schumpeter's explanations for the Great Depression were pretty irrational. He tended to blame the whole descent from recession to depression on the New Deal (he claimed to hate anything that smacked of planned economy, only to later embrace monopoly control of the economy), though he forgot that Depression had taken hold of European states where public spending was even less aggressive (Switzerland?).
Moseley gives precise evidence on a partial restoration of profitability levels which are nonetheless still below Golden Age levels. Brenner cites such stats as well.
>4. Do crises really provide the ground for the centralization of capital?
>Honestly, I think capital is dramatically centralized even in periods of
>prosperity. Look at all of the mergers that are going on right now. Even
>if crises did serve this function, why would that function make the crisis
>necessary? Seems a bit circular to me. Maybe, I have misunderstood you...
Not at all. We still have not explored the reasons for this mind boggling centralisation of capital, the significance of the deals being mostly in stocks, and the effects we can expect. It seems that the American author to study is Frederic Scherer, author of the leading textbook on industrial structure.
In Brenner's framework, we could argue that a deep depression is still required to liquidate that profit rate-reducing excess capacity that bigger firms are simply gobbling up through these stock deals, instead of making real investments in low cost capacity that would raise the anemic, albeit still inflated, productivity growth rate. So crises may still be required to clean the system out, and that may require the actual bankruptcy of firms whose profile is top heavy with old vintage capacity. Here we may want to look at the work of Michael Perelman and Makoto Itoh on scrapping.
Brenner is indeed quite interesting. It seems to me that he is saying that the trajectory capitalist competition imparts is simply the most maximal and rapid development of the productive forces. Then how could the relations fetter the forces and all that?
His answer is ingenious if I understand him: exactly because of the unplanned nature of this rapid and maximal development, quite a bit of excess capacity builds up that then puts bourgeois society on the horns of a dilemma: if it is not liquidated, it comes to depress the profit rate and undermine growth but its liquidation can only be enforced in a profound depression in which there would be serious fetters on the productive forces, i.e., an idling of the factors of production and unemployment generally.
In GA Cohen's language, he seems to grant capitalism the ability to *develop* the productive forces but charges bourgeois society with a serious and recurrent *use fettering* for prolonged periods in order to resume its unplanned, albeit maximal and rapid, development of the productive forces.
Schumpeter may have preferred a society that is dynamically efficient over the long term but perhaps never in full employment equilibrium and even far out of it at times. But Brenner's argument is that Schumpeter underestimates how deep and devastating the unemployment bourgeois society must inflict in phases of liquidation to resume a dynamic and maximal growth path once it builds up excess capacity in its furious foreward movement.
Brenner argues that the planners of the capitalist system themselves find the depression douche much too cold of a shower. Consequently, there has been no clean break from stagnation.
I am not convinced by Brenner's framework; indeed working on a criticism of it. But it does have power and coherence.
>The theories you sketched are illuminating but they seem to discount the
>role of institutions and regimes in "correcting" these market failures. I
>am wary of economic theories that view the market as a force akin to nature
>or a mechanical equilibrium model. (Maybe I just have a prejudice against
>the Physiocrats and their descendants).
Equilbrium?! In neither the Marshallian nor the Walrasian sense is Mattick a theorist of equilbrium!
>I think of the international political economy as the reflection of the
>political power and purpose of the major state and market actors. Perhaps
>our views on capitalism are not mutually exclusive of one another.
>Nevertheless, I believe that an important avenue for disadvantaged groups to
>improve their situation is to politicize the economic institutions and
>networks that regulate international political economy (e.g., The Paris
>Club, The Basle Committee, The IMF, The World Bank, etc.).
As the Cato institute says, abolish the IMF!
>As a side note, it might be interesting to compare Schumpeter's position on
>douches and Bataille's argument in the Accursed Share about the relationship
>between capitalism and war.
I shall be learning more about Bataille from the prof after work; she has been quite interested in him. I note that Bataille is discussed in Maurice Godelier's latest book The Enigma of the Gift. So is Charles Brown's old teacher Marshall Sahlins.
yours, rakesh