> To the extent the warfare state devalorises (Iraq!) it is
>not such an intervention, because devalorisation is the opposite of the
>logic of accumulation. To the extent the welfare state does Keynesian
>pump-priming, it is consistent with ongoing valorisation.
Patrick, as I understand it...
As war allows for running down and outright destruction of excess capacity, it allows capital more scope for investment (eventually in Iraq most of all as at present there is using up of the capital stock without simultaneous reproduction) and the possibility of resuming accumulation on more favorable terms, i.e., on the basis of a more a technologically advanced capital stock. Far from bringing about economic catastrophe, the war in and eventual control of Iraq will have created breathing space for American capitalism. This is generally true of war; it comes as a relief for capitalism.
The question is also at what point pump-priming becomes inconsistent with or at least not helpful for on-going valorization. The rational expectations revolution--while ideological and fanciful in its reasoning--reflects an awareness that there are indeed objective limits to pump priming.
On the question of general crisis and collapse, it is important to remember the groundwork laid by Marx. The possibility inheres in the commodity itself. While other economic thinkers derive money from either the tax based needs of the state (chartalism) or the difficulties of barter (e.g. double coincide of wants), Marx derived money from the contradiction latent in the commodity itself. This fundamental point has been lost on almost all exegetes since Jindrich Zeleny underlined it.
Money and commodity are not a simple unity but a contradictory unity. Oversimply: One cannot buy commodities without parting with the qualities monopolized by money. This creates the possibility of what the classical economists denied--general crisis.
Contradiction is the central category in Marx's social science and Marx's social science alone, I think. I am working on this right now.
*The commodity is contradictory,
*the logic of accumulation is contradictory (to realize surplus value capitalists have to reduce unit values by substituting dead labor for live labor but such substitution tends to reduce the mass of surplus produced relative to the capital invested, and you can't realize what you haven't produced even if there is no difficulty in sales),
* the law of the tendency for the rate of profit expresses internal contradiction (the very technical progress which exerts upward pressure on the organic composition of capital tends to cheapen capital goods)
*and (as Bohm Bawerk did not realize) the law of value is in real contradiction to the tendency for the rate of profit to equalize.
**and there is not real structural contradiction alone (to which I have not added the most obvious one of all, the nature of the class based relation itself) but also contradiction in class based perception. This is what I tried to establish in the debate on justice. Marx thought that there were two contradictory but self consistent ways of looking at the wage transaction which the transaction would not allow us to resolve. objectively. That is, the classes' perception are contradictory. And as James underlined when right meets right or one self consistent perspective meets another on the same objective terrain, only force can decide.
But since Doug is back, let me state briefly how the understanding of real structural contradiction allows us to understand the transformation problem....
If the social relations of production are mediated by commodities, then their respective exchange values have to be at least tendentially proportional to their respective values if society is to allocate the labor time available to it such that it can reproduce itself, engage in self-constraining production, production constrained to ensure that it can be carried out again.
In other words, it is exactly through dis-proportionality between exchange value or price and value that society informs itself of how its labor time has to be reallocated, depending on people to react in their atomistic state to price and value disproportionalities to correct allocational imbalances.
The law of value is thus demanded for the successful working of capitalism. Indeed it could be argued that it is only actually effective under the capitalist mode of production as there is no such thing as simple commodity production as a mode of production.
But the problem as I have been trying to emphasize is that capitalism is structured by inner contradiction, meaning here something like "two demands, both necessary for the successful working of the same system, but mutually incompatible." (Andrew Collier) In other words, general commodity production does have inner contradictions, at the most abtract level between social production and private appropriation, and those inner contradictions do not yield just annulment but generate new phenomena.
Because the social relations of production are organized through commodity relations, prices must be governed by values for a society to achieve the proportional deployment of labor needed for its reproduction.
But general commodity production is also capitalist or private production, the production of commodities by means of wage labor for profit. This latter systemic feature motivates capitalists to search for the highest profit, leading tendentially to an averaging of the rate of profit.
But behind everyone's back the averaging of the rate of profit contradicts the law of value. Yet they are both inherent to the structure. They are not simply externally or indifferently opposed tendencies as they both inhere in one and the same system.
Marx in fact emphasized this contradiction; he thought Ricardo had glossed it over. The question then becomes what is the dialectical consequence of this real contradiction: it is of course the emergence of prices of production, which are modified values and through which the raising of the class struggle to a social level is expressed (Pilling).
Marx's derivation of the category of price of production is thus dialectical though this has not been argued in the same way as I have here; the point is that Marx's derivation of the category of the price of production results from studying the consequence of the mutually incompatible demands of one and the same system. Dialectics is the key.
Marx does not contradict himself. Capitalism contradicts itself. Bohm Bawerk blamed Marx for the real contradictions of captialism. Samuelson's eraser theorem is nothing other than an admission of his inability to understand that a system can be contradictory, that is, that the law of value is not erased but in real contradiction with other systematic tendencies. Marx's opponents simply cannot think real contradiction.
Key texts are Zeleny's Logic of Marx, Sean Sayers' debate with Richard Norman on the dialectic, Andrew Collier's essay on contradiction, Lawrence Wilde's essay on contradiction.
Rakesh