>
> ...Defeating the Law. Faced with this historical tendency toward
> ever falling profitability of the social capital, painfully manifest
> in every period of crisis, each capitalist ruling class attempts to
> reverse it in various ways. These ways go outside the bounds of the
> closed-system model used to derive the Law. Marx outlines five such
> "counteracting causes": raising the intensity of exploitation;
> cheapening the elements of constant capital; depressing wages below
> their value; relative overpopulation; foreign trade. Since the
> tendency to be counteracted expresses at any time given rates of
> exploitation and organic composition, the counteracting causes
> (which are not independent of each other) must take effect through
> raising the former or diminishing the latter.
>
> --raising the intensity of exploitation. This is conceptually
> distinct from the systemic economic tendency for increasing organic
> composition to produce relative surplus-value. Exploitation is also
> increased by extraction of absolute surplus-value, through
> intensification of the labor-process itself by forcing laborers to
> work harder and faster for the same wage. The intensity of work,
> which the working class always tries to minimize and the capitalist
> class to maximize, is itself on average the resultant of the balance
> of class forces. To raise it, thus, requires capital to win a
> battle in the class struggle. For that advantage to be durable, not
> to be reversed by the working class when the next prosperity-phase
> restores its bargaining power, means that a new social norm of
> intensified work would have been established. Thus even were the
> total amount of surplus-value, and hence the rate of profit, to be
> durably increased, that would constitute only a one-time gain.
> Starting with the next cyclical upswing all the forces tending to
> reduce profitability would return to full operation.
>
> --cheapening the elements of constant capital. As shown above, this
> cannot by itself have any tendential effect on organic composition.
> What is involved is circulating, rather than fixed, capital. Such
> cheapening works to reduce the value of the inventory component of
> the capital stock, and to that extent it lowers organic composition
> and raises profitability. But unless they express increasing average
> productivity of labor (in which case it would, as has been shown,
> merely reflect increasing organic composition) such instances of
> cheapening are merely one-off gains that do not effect the long-run
> tendency of profitability to fall.
>
> --depressing wages below their value. The value of the real wage
> signifies the cost of reproduction of labor-power. This value
> declines tendentially with growth in labor productivity, even though
> real wages have tended to increase over the long course of
> capitalist development (a tendency that Lenin called a "law of
> increasing requirements"). To depress wages below their value, at
> any given time, means to depress the real wage below its historic
> social norm--to depress the standard of life of the working class.
> Economically, the only barrier to this is the level at which
> immiseration directly impacts labor productivity, and presently in
> advanced countries there seems to remain a considerable margin
> before that point is reached. The real obstacle is always the power
> of the working class to resist immiseration, for popular unrest is
> always at its most explosive when living standards are under
> attack. It is this point which gives Marx's Law its most pointed
> political relevance, especially in the present context of systematic
> attack on popular living standards throughout the Western capitalist
> systems.
>
> --relative overpopulation. Long-term increase in the industrial
> reserve army, through recruitment of workers from low-productivity
> or noncapitalist lines of production (like subsistence farming),
> both depresses real wages and provides labor-power for lines of
> production with low organic composition. This is perhaps the most
> visible of all the counteracting factors, in the form of mass
> immigration from colonial or semi-colonial societies (Latin America,
> Africa, Eastern Europe) into the advanced Western economies or, in
> China, India, Brazil, etc., from an impoverished peasant hinterland
> into mushrooming industrial cities. Though this process can persist
> long-term there also are definite limits: demographic (decrease of
> potential recruits), economic (local industrialization), and social
> (popular resistance to the disruptive effects of large-scale
> migration). Moreover, as migrants assimilate they become a full part
> of the working class and so disappear as an independent
> counteracting factor.
>
> --foreign trade. This sustains profitability in two ways: the
> Ricardian mechanism of specialization in high relative productivity
> industries; and the availability of cheap consumer goods and raw
> materials. These are basically instances of raising relative
> surplus value, either by raising average physical productivity or
> through lowering the value of the real wage and of material
> inventories. But they are short-term factors. Trade among
> capitalist systems can never negate the long-term tendencies at work
> in every one of those systems. Even a totally globalized, frontier-
> free, capitalist system would merely combine each system's own law
> of the falling tendency of the rate of profit into a law of the
> whole world system.
>
> Aggravating factors. Over the century-and-a-half since Marx
> formulated his Law, three tendencies far more important than all the
> counteracting causes put together have manifested to intensify the
> consequences of the Law. They are the ecological crisis of the
> planet (especially global warming), the depletion of essential
> natural resources (fisheries, land, fresh water, and minerals), and
> the bureaucratization and financialization of the capitalist
> economy. This is not the place to detail their vast scope. Suffice
> it to state that they impose enormous and unaccounted costs from
> natural disasters and cleaning up (or, worse, not cleaning up)
> pollution; multiply natural-resource rents to parasites like the
> Russian ex-nomenklatura, the Gulf monarchs, or the Koch brothers;
> and divert resources on the largest scale to unproductive activities
> and unproductive capital. As surplus-value is swept into rents and
> interest and executive loot the amount left for profit-of-
> enterprise, the source and motive of new productive investment, is
> constantly diminished while the real (environmental) cost of
> production is forced ever higher. Even as technology increases the
> gross productivity of labor, its net productivity comes under
> always-increasing pressure. The peau de chagrin continues ever to
> tighten.
>
>
> [footnote one]
>
> Heinrich is very insistent, and rightly so, that Marx's abstract
> model presents capitalism in its "ideal average."
>
>
> [footnote two]
>
> In vol. 1 Marx says that "The organic composition of capital is the
> value composition of capital insofar as it reflects the technical
> composition of capital." The value composition is defined as the
> ratio C/v. It is the technical, not the value, composition that
> determines the development of the Organic Composition. Over
> historical time all these compositions necessarily increase. The
> "value composition," C/v, ceases to reflect organic/technical
> composition because v represents only the paid portion of the
> performed productive-labor-hours, and it is fundamental for Marx
> that the continual creation of "relative surplus value" tends over
> time to reduce the paid portion of working time. Accordingly, "V,"
> the stock of circulating capital represented by the portion of
> consumer-goods inventories destined for productive workers,
> constitutes a constantly diminishing portion of the social capital
> stock. This justifies our simplifying the definition of the overall
> rate of profit as (s'v)/C rather than as s'v/(C+V). The only
> distortion involved in abstracting from V would be a very slight
> underestimate of the actual decline in the rate of profit.
>
> [footnote three]
>
> It should be noted that, insofar as a piece of capital equipment is
> significantly innovative and therefore unique, the very concept of
> "labor productivity" in its manufacture is problematic. What sense
> does it make to say that the labor involved in manufacture of a
> Boeing Dreamliner is more or less productive than that in a Boeing
> 727? At any rate, market price cannot be used as an indicator of
> "real" output because that can be done only for commodities of
> comparable use-value to the various purchasers. Capital equipment
> is purchased only for its utility as a means of producing surplus-
> value in the specific economic context of another producer, not for
> its utility to a final consumer. The US central bank, correctly,
> does not use capital-goods prices in its estimates of inflation but
> relies only on the personal consumption expenditure (PCE) deflator.
>
>
> [footnote four]
>
> The perpetually rising tendency of the technical composition of
> capital is central to the materialist conception of history, which
> underlies everything in Marx's thought. In Capital Marx cites the
> phrase of Benjamin Franklin: "man is the tool-making animal." But
> historical materialism goes much deeper (other animals have been
> shown to make tools): man is not only a tool-making animal; man is a
> *tool-made* animal! Man's "tools," his material means of
> production, are his material technology, the objectification of his
> ideas (compare Hegel: "reasonableness manifests as such" in the fact
> that "the plow is more honorable than the immediate enjoyments that
> are procured through it and serve as ends. The instrument is
> preserved, while the immediate enjoyments pass away and are
> forgotten. In his tools man possesses power over external nature,
> although as regards his ends he frequently is subjected to it.")
> Because of their persistence, those external
> idea-embodying material forms, the means of social production, are
> the basis for continual and reciprocal improvement of both ideas and
> tools (intellectual and material technology), and hence the basis of
> human social evolution and corresponding material evolution (the
> Darwinian mechanisms, natural and sexual selection, giving
> reproductive advantage to types of human beings better fitted to
> function as productive members of the given human social group--an
> advantage that becomes cumulative through selection among groups).
>
>
> Shane Mage
>
>
> This cosmos did none of gods or men make, but it
> always was and is and shall be: an everlasting fire,
> kindling in measures and going out in measures.
>
> Herakleitos of Ephesos
>
>
>
>
>