Valorizing China [was RE: WSJ on A16]

[Rakesh Bhandari]

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