Valorizing China [was RE: WSJ on A16]

Rakesh Bhandari bhandari at Princeton.EDU
Tue Apr 11 08:07:27 PDT 2000


Ian, my point is that even if rate of exploitation of employed proletarians is rising, surplus value production still confronts a limit in absolute size of population available for valorization. This of course seems absurd in the face of such a large global reserve army of labor (and huge pockets of unemployment in this country, often hidden in the prison system). But as you noted, what counts is a population that is actually available for exploitation.

More importantly, the population base has to be considered not simply in terms of itself but in terms of the enormous productive capacity in the capital goods sector. Since fixed capital is slow in its turnover while capital goods are yet built up for an expanding market, there is always the looming threat of overproduction here relative to the available valorization base. Greenspan is merely expressing this dread of underpopulation.

Of course if capitalization of surplus value is hindered due to lack of surplus value vis a vis accumulation requirements or insufficiency of the valorization base, this insufficiency or underproduction of surplus value turns into an excess of surplus value that may now be speculated in the stock market, arbitrage, or real estate.

So my explanation for the excess of surplus value is the opposite of John Bellamy Foster's--it follows not from the excess but from the insufficiency of surplus value. But I am a student of Grossmann, he of Sweezy. In fact Foster wrote a whole book critiquing my "school", though there may be a compromise position in the work of Sydney Coontz...

I argue that the excess of surplus value drives capital to raise even further rate of exploitation and expand valorization base through expansion in space. Of course foreign direct investment carried out by multinational corporations which then import otherwise excess capital goods is a key strategy to expand the population base available for exploitation. It's a secondary question whether the surplus value thereby produced will be realized within China or in foreign markets--though I think there is much greater interest in the domestic market than generally recognized.

The need to expand into China to secure population base to avoid overproduction of capital goods runs into the capitalist class' ideological and security concerns which are not served by integration of China into world market. As always, I think labor has to forge a strategy clearly independent of these two factions within the capitalist class.

Yours, Rakesh



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