[lbo-talk] Fwd: S&S Call for Papers

Ted Winslow egwinslow at rogers.com
Sat Jan 31 09:22:43 PST 2009


SA wrote:


> All that stuff about securitization, leverage, the shadow banking
> system - that stuff really did cause the crisis, at least in a
> proximate sense. Yet I don't think there are any specifically
> Marxist conceptions of capitalist dynamics that would have anything
> significant to say about any of that.

Marx's conception of capitalist dynamics incorporates Hegel's idea of the "passions".

He makes the dominant capitalist "passions", in this sense, "avarice, and desire to get rich". He claims this was particularly obvious at "the historical dawn of capitalist production". He claims recognition of these as the dominant motives as an insight of the early forms of capitalist "political economy" - the "monetary system" and "mercantilism". He also claims this insight is missing from the "classical political economy" of Smith and Ricardo. The role of these passions in capitalist motivation also becomes less obvious as this motivation develops. It's continuing importance is shown, however, by "monetary crises".

"At the historical dawn of capitalist production, — and every capitalist upstart has personally to go through this historical stage — avarice, and desire to get rich, are the ruling passions. But the progress of capitalist production not only creates a world of delights; it lays open, in speculation and the credit system, a thousand sources of sudden enrichment. When a certain stage of development has been reached, a conventional degree of prodigality, which is also an exhibition of wealth, and consequently a source of credit, becomes a business necessity to the “unfortunate” capitalist. Luxury enters into capital’s expenses of representation. Moreover, the capitalist gets rich, not like the miser, in proportion to his personal labour and restricted consumption, but at the same rate as he squeezes out the labour-power of others, and enforces on the labourer abstinence from all life’s enjoyments. Although, therefore, the prodigality of the capitalist never possesses the bonâ-fide character of the open-handed feudal lord’s prodigality, but, on the contrary, has always lurking behind it the most sordid avarice and the most anxious calculation, yet his expenditure grows with his accumulation, without the one necessarily restricting the other. But along with this growth, there is at the same time developed in his breast, a Faustian conflict between the passion for accumulation, and the desire for enjoyment." <http://www.marxists.org/archive/marx/works/1867-c1/ch24.htm>

"Just as in the sixteenth and seventeenth centuries, when modern bourgeois society was in its infancy, nations and princes were driven by a general desire for money to embark on crusades to distant lands in quest of the golden grail, so the first interpreters of the modern world, the originators of the Monetary System -- the Mercantile System is merely a variant of it -- declared that gold and silver, i.e., money, alone constitutes wealth. They quite correctly stated that the vocation of bourgeois society was the making of money, and hence, from the standpoint of simple commodity production, the formation of permanent hoards which neither moths nor rust could destroy. It is no refutation of the Monetary System to point out that a ton of iron whose price is £3 has the same value as £3 in gold. The point at issue is not the magnitude of the exchange-value, but its adequate form. With regard to the special attention paid by the Monetary and Mercantile systems to international trade and to individual branches of national labour that lead directly to international trade, which are regarded by them as the only real source of wealth or of money, one has to remember that in those times national production was for the most part still carried on within the framework of feudal forms and served as the immediate source of subsistence for the producers themselves. Most products did not become commodities; they were accordingly neither converted into money nor entered at all into the general process of the social metabolism; hence they did not appear as materialisation of universal abstract labour and did not indeed constitute bourgeois wealth. Money as the end and object of circulation represents exchange-value or abstract wealth, not any physical element of wealth, as the determining purpose and driving motive of production. It was consistent with the rudimentary stage of bourgeois production that those misunderstood prophets should have clung to the solid, palpable and glittering form of exchange-value, to exchange-value in the form of the universal commodity as distinct from all particular commodities. The sphere of commodity circulation was the strictly bourgeois economic sphere at that time. They therefore analysed the whole complex process of bourgeois production from the standpoint of that basic sphere and confused money with capital. The unceasing fight of modern economists against the Monetary and Mercantile systems is mainly provoked by the fact that the secret of bourgeois production, i.e., that it is dominated by exchange-value, is divulged in a naively brutal way by these systems. Although drawing the wrong conclusions from it, Ricardo observes somewhere that, even during a famine, corn is imported because the corn-merchant thereby makes money, and not because the nation is starving. Political economy errs in its critique of the Monetary and Mercantile systems when it assails them as mere illusions, as utterly wrong theories, and fails to notice that they contain in a primitive form its own basic presuppositions. These systems, moreover, remain not only historically valid but retain their full validity within certain spheres of the modern economy. At every stage of the bourgeois process of production when wealth assumes the elementary form of commodities, exchange-value assumes the elementary form of money, and in all phases of the productive process wealth for an instant reverts again to the universal elementary form of commodities. The functions of gold and silver as money, in contradistinction to their functions as means of circulation and in contrast with all other commodities, are not abolished even in the most advanced bourgeois economy, but merely restricted; the Monetary and Mercantile systems accordingly remain valid. The catholic fact that gold and silver as the direct embodiment of social labour, and therefore as the expression of abstract wealth, confront other profane commodities, has of course violated the protestant code of honour of bourgeois economists, and from fear of the prejudices of the Monetary System, they lost for some time any sense of discrimination towards the phenomena of money circulation, as the following account will show." <http://www.marxists.org/archive/marx/works/1859/critique-pol-economy/ch02c.htm

>

"Under conditions of advanced bourgeois production, when the commodity- owner has long since become a capitalist, knows his Adam Smith and smiles superciliously at the superstition that only gold and silver constitute money or that money is after all the absolute commodity as distinct from other commodities -- money then suddenly appears not as the medium of circulation but once more as the only adequate form of exchange-value, as a unique form of wealth just as it is regarded by the hoarder. The fact that money is the sole incarnation of wealth manifests itself in the actual devaluation and worthlessness of all physical wealth, and not in purely imaginary devaluation as for instance in the Monetary System. This particular phase of world market crises is known as monetary crisis. The summum bonum, the sole form of wealth for which people clamour at such times, is money, hard cash, and compared with it all other commodities -- just because they are use-values -- appear to be useless, mere baubles and toys, or as our Doctor Martin Luther says, mere ornament and gluttony. This sudden transformation of the credit system into a monetary system adds theoretical dismay to the actually existing panic, and the agents of the circulation process are overawed by the impenetrable mystery surrounding their own relations." <http://www.marxists.org/archive/marx/works/1859/critique-pol-economy/ch02_3b.htm

>

All this has much in common with Keynes's account of a "liquidity crisis".

Like Marx, he claimed that "the essential characteristic of capitalism" was "the dependence upon an intense appeal to the money- making and money-loving instincts of individuals as the main motive force of the economic machine", "instincts" he treated as psychopathological in the sense of Freud and as "passions" in the sense of Hegel.

He explained the increased "propensity to hoard" to which Marx points, in explanation of a "monetary crisis", as "regression" in Freud's sense, as the return to dominance in motivation of an "instinctive or conventional" "feeling about money" that "operates at a deeper level of out motivation" and "takes charge at the moments when the higher, more precarious conventions have weakened".

This aspect of Marx is missing from most "Marxist" treatments of crisis. The capitalist is instead treated as a demonic genius and the only form of crisis recognized is that alleged to follow from a mathematically demonstrated necessity of a falling rate of profit "in the long run" when "we are all dead".

Ted



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