-------- Original Message -------- Subject: Re: [Debate] [lbo-talk] Crisis of overaccumulation Date: Sun, 07 Feb 2010 07:01:28 +0200 From: Patrick Bond <pbond at mail.ngo.za> Reply-To: pbond at mail.ngo.za, Debate is a listserve that attempts to promote information and analyses of interest to the independent left in South and Southern Africa <debate-list at fahamu.org> To: lbo-talk at lbo-talk.org CC: Activists and scholars in Marxist tradition <marxism at lists.econ.utah.edu>, DEBATE <debate-list at fahamu.org> References: <4239FCC86F1049AC9C07F51E40EC944F at JamesPC>
Thanks comrade James, and I'll cc two other lists your article was posted...
James Heartfield wrote:
> Patrick, you are very kind about Grossman (I only did some proofing on the manuscript). I am grateful that you take the time to reand the article, but sometimes it seems to me that there is such a din of ideas in your head that it is hard to know where to start. Your approach is not scientific, but just heaps up evidence that 'capitalism is bad' as if that was a question that could be demonstrated on paper rather than in fact.
>
Not 'bad' (ok, yeah, bad), but *crisis-prone* in its underlying laws of motion (not merely because of investor psychology, but because of signals sent to investors from inventory control about overaccumulation, and from marketing about likely effective demand given unemployment, wage stagnation and the limits to credit expansion). That's the big difference in the upside-down dialectics you and your comrades have adopted, since the old RCP days when at least Grossmann and Mattick kept you focused on crisis theory.
> You say you want to keep your thinking within those parameters that Marx set out (albeit with some fishy sounding 'corrections'
'Fishy'? Well it's true, Kapital needs updating. There wasn't a huge state apparatus in Marx's day - or even the 1930s - that could be invoked to pick up the Keynesian slack or bail out bankers or even shift the overaccumulation problem around. This doesn't mean the theory he generated about crisis-formation isn't correct, it just means that to the standard Marxist canon about countervailing tendencies (relative and absolute s.v. extraction), we should add shifting, stalling and stealing as crisis-management techniques. How can you object to that?
> - saving the evidence like those epicycles the Ptolemaics introduced into the geocentric universe model) but not why. Marx's theoretical approach is more robust than that - it can accomodate new conditions; his theoretical reconstruction of capital accumulation is not the last word.
>
I simply want to retain the proposition that excess investment in increasingly capital-intensive systems of extracting surplus value is the core contradiction within accumulation (alongside class struggle). You don't.
> What you refuse to confront is that the current economic difficulties are preceded by a massive increase in the capitalist labour force.
I have no problem conceding that the search for absolute surplus value entails the generation of a vast reserve army of labour and that this increase in the labour force has had the effect of lowering wages in the core value-producing industries of the West, if that's what you're getting at. But that labour force can rise and fall. Inequality can ebb and flow. Social resistance and class struggles can begin and end. But the dynamic behind crisis formation and displacement is much more durable, and its source is overaccumulation.
> It does not really help to argue that Soviet and Chinese state-owned concerns employed more, because this was not a capitalist labour force.
Right then, a state-capitalist labour force? (Where's Chris Harman when we need him.)
> Nor can you write off the growth in employment in the developed world as not being surplus value producing, as if capitalists employed workers out of generosity.
>
Of course employers employ out of the search for profit. But the search for profit and the ability to realise surplus value are very very different, surely? And isn't that the heart of the problem they face? How closely does the work of tens of thousands of Goldman Sachs staff correlate to surplus value, which should be the systemic basis for profits? You should start by admitting the flaw in your efforts to pronounce Marxist crisis theory dead using a category - unproductive labour - that doesn't tell us much about the underlying problem in the capitalist economy, the tendency to overaccumulate.
> You cannot avoid the problem by shuffling the time scale,
Don't blame the messenger. It's capitalist management that does that, by using credit - allowing people and firms to pay for goods now and repay later, so the system postpones the problems, stalling them across time.
> nor by taking refuge in oxymoronic propositions like "slow-motion crisis".
What better phrase is there for the displacement techniques capitalist management has used so well these last four decades?
> You say that capitalism has been in crisis since the late 1960s. But if that were true, the word 'crisis' would have no meaning.
The meaning is simple: if a system's reproduction is normally self-sustained, but endogenous processes drive the system into a state where it cannot reproduce, it needs an exogenous process to re-establish the equilibrium (even temporarily). If capital's logic is accumulation and if stagnation sets in due to overaccumulation, then an exogenous process of devalorisation is required before the economic deadwood is cleared away so that accumulation can resume. Right?
> As Marx said, 'there are no permanent crises'.
This is not a satisfactory rebuttal. You're being a rascal, James. I found this full context quote here, in a 1949 article by Winternitz, stressing cyclical processes... and so what you've picked up is 'underproduction' in Western deindustrialising capitalism since the 1980s, not sustained overaccumulation in the system as a whole: http://www.marxists.org/subject/economy/authors/winternitz/1949/marxisttheoryofcrisis.htm
"If Smith explains the fall of the rate of profit by superabundance
of capital, accumulation of capital, then this is regarded as a
permanent effect, and this is wrong. However, transitory
superabundance of capital, overproduction, crisis, this is another
matter. There are no permanent crises."^ This is not in
contradiction to what Marx says in another context: "Overproduction
produces & /permanent/ fall of profit, but it [i.e. overproduction -
J.W.] is permanently /periodical/. It is followed by
underproduction, etc. Overproduction follows from the fact that the
average mass of the people can never consume more than the average
mass of means of consumption, that their consumption does not grow
correspondingly with the productivity of labour."
So this is the work you really should be doing, comrade: investigating the cyclical character of accumulation, and especially checking on how the overproduction of goods cannot be offset in consumption, especially with more productive labour, even with credit cards in your postbox and subprime mortgages in your 'hood. The stalling displacement is merely displacement; the credit system bites back.
> You seem to ignore the singular and remarkable annexation of the Stalinist world to capitalism in the 1990s, as if that was not an expansion.
It's a good point. I don't ignore it, I am just ignorant about the devalorisation of half the East Bloc, having never researched it and only visited briefly a couple of times. Simon Clarke makes this a fairly central piece of his argument on crisis displacement, by the way.
> You write about gluts. I see the opposite, shortages.
Of course, comrade, that's why it's important to get some better glasses, to read stories about overaccumulation in the business press (47% capital/GDP investment in China last year is a figure causing world panic), and to track the huge increase in the global financial bubble thanks to the fake-Keynesian stimulus last year (http://www.wsws.org/articles/2010/feb2010/mark-f06.shtml), and, of course, to follow unemployment trends (the worsening glut of jobless workers is something a genuine Marxist like yourself will welcome as an organising opportunity), so that you don't end up writing more upside-down articles with the title you chose ... ;-) ... try these, for example: http://www.breakbulk.com/content/?p=1056 , http://www.calculatedriskblog.com/2009/02/overcapacity-everywhere.html , http://eurodialogue.org/osce/Davos-New-ways-of-global-co-operation ,
An example from the steel industry: http://www.zacks.com/stock/news/27253/Steel+Industry
U.S. domestic production capacity utilization has fallen
dramatically since August 2008. Capacity utilization peaked in
February 2008 at a level of 91.6%. In May 2009, estimated capacity
utilization was 44.3%, less than half of its level six months ago.
Capacity utilization reached its lowest point, 40.9%, in December
2008, though it has increased again since May 2009. Overcapacity in
the global steel industry could increase the level of steel imports
and result in downward pressure on steel prices. Overcapacity in
China has the potential to result in a further increase in imports
of low-priced, unfairly traded steel and steel products to the U.S.
In recent years, capacity growth in China has significantly exceeded
the growth in Chinese market demand.
> In energy production, South Africa, like Britain and California, has failed to invest in the infrastructure to meet demand.
Phew, that's such a misreading of South Africa, I don't know where to start. SA's overinvestment in energy during the 1980s was part of its overaccumulation crisis, and the subsequent shortages in 2008 were mainly a function of the commodities bubble (not genuine 'demand' as we soon found out but mainly a speculative price surge) which got our ridiculous smelters working overtime and burned out the coal-fired power plants. Those smelters get the cheapest electricity in the world, and we have quite a ferocious campaign underway to reverse that and give cheap power to the masses cross-subsidised by higher prices to the smelters. But the mid-2008 crash of minerals and metals solved the load-shedding problem. It's a long story, one that is at the heart of SA's resurgent class struggle right now. More on this topic another day.
> World food prices rose in 2005 because of a failure to keep pace with demand.
Again, plug in speculation (including the real estate bubble) and you're much closer to the truth.
> These are real questions that need to be investigated, not subordinated to a ready-made theory. 'Here is the truth, kneel here,' - that is not an attitude that Marx would endorse.
Agree to agree on that.
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