[lbo-talk] advertising and marxism

[Wojtek S]

I understand that.  My point was somewhat different.  Due to
overproduction capitalists encounter difficulty in realizing profits
from their investment (a line of argument recently proposed by
Brenner.)  Since they not in a position to maintain profits by
raising prices (or perhaps "hedonically value" the products) due to
overproduction, their only option is to reduce labor cost, either
through raising productivity or by lowering wages (or both).  The
problem with that is that in a long run it decreases aggregate demand
(or perhaps dos not keep it up with increases in aggregate supply)
which poses a threat to profits.  To avert that, at least for a while,
they expand consumer credit to maintain a necessary level of aggregate
demand.

Of course, at certain point the whole system is going to crash anyway
when the ability to borrow inevitably evaporates, but this does not
make things any worse than "raw" capitalism experiencing business
cycles.  However, it creates an illusion that "the market works"
either in a 'raw' form in with Keynesian macro-management, and the
crash was just an 'accident" that could have been avoided.  As the
results, the marks that have been cheated out of their money tighten
their belts and start playing the game again, hoping that this time it
will work.

This is like trying to make a perpetual motion machine work because of
expectations of enormous benefits this will generate.  Paradoxically,
this belief is what keeps the perpetual motion machine in perpetual
motion that the laws of thermodynamics say is impossible.

Wojtek

On Mon, Mar 26, 2012 at 2:20 PM, James Heartfield
<Heartfield at blueyonder.co.uk> wrote:
> ... mind you Lenin’s answer to Charles’ problem ‘wage laborers are only paid so much, and it is always less than enough to buy all the consumer commodities which they produce’ was that workers are not the only consumers. Capitalists consume, both privately consuming luxuries, and as corporations, consuming those intermediate goods and machines that go to make up consumer goods. The total demand, therefore is greater than the demand of the working class. Lenin explains in Capitalism in Russia, which he bases on Marx’s second volume of capital.
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-- 
Wojtek
http://wsokol.blogspot.com/