[lbo-talk] Fwd: The next recession

[Rob Hoveman]

Marv, you are right that particular capitalists can both absorb and benefit from higher wages in the competitive struggle against other capitalists at certain times. This is particularly true of certain big capitalists. Even if there is no calculation that higher wages can squeeze their opponents, relative shortages of labour gives a capitalist an incentive to raise wages to attract and retain labour. And higher wages will boost consumer spending as workers tend to spend a higher proportion of their income. 
However there are limits to how high they are prepared to see wages go. The situation will change though in conditions of a general downturn in the economy where suddenly the need for austerity becomes the watchword and wages in general will suffer downward pressure as profits decline. In such circumstances, capitalists more generally will think that marbles have been lost if the government, influenced by enlightened left Keynesians, suggest all will be well if they would just increase wages. 
That is why the inevitability of periodic crises as a phenomenon built into the dynamic of capitalism has been considered so important, at least for some. Apart from the sheer unnecessary waste and destruction both of property and more importantly lives heralded by these crises, they are the objective basis for intensified class conflict and the dispelling of illusions that capitalism is ultimately a benign system. 
This is not to say, rather obviously, that those objective conditions will.automatically lead to the supersession of capitalism. Rather obviously they haven't!

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  On Sun, 31 Jan, 2016 at 1:59 am, Marv Gandall<marvgand2 at gmail.com> wrote:   I’m still trying to fathom what the argument is about. To address Rob’s point, higher wages are in the immediate interests of the working class though, as Marxist theory has it, not in their “historic interests” since it bolsters their confidence that they can improve their living conditions under capitalism without risking a desperate leap into the unknown which is what a social revolution represents. 

On the other side, petty capitalists may be hurt by wage increases, but the large corporations can afford to make wage concessions in an expanding economy, and it is in their interest to do so in order to retain and recruit workers in a tight labour market. Wage hikes also help to secure the cooperation of unions and dampen labour unrest, and, finally, the increases are typically passed on to worker-consumers whose purchasing power has been augmented. 

Is any of this in dispute?


> On Jan 30, 2016, at 2:14 PM, Rob Hoveman <robhoveman at yahoo.co.uk> wrote:
> 
> That's certainly true and only abstract propagandists of the most extreme kind reject the demand for higher wages for workers. The argument would be over whether higher wages would be in the interests of both workers and capitalists and a way of stabilising capitalism.
> 
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> 
>  On Sat, 30 Jan, 2016 at 9:16 pm, JOANNA A.<123hop at comcast.net> wrote:  Well, yes, socialist revo would be great.
> 
> Short of that, getting more money into the hands of workers would be swell and need not necessarily imply the rejection of socialism.
> 
> Joanna
> 
> ----- Original Message ----- 
> Thnx. Good summary. The Keynesians understandably point to lack of purchasing power and demand to justify job creation and income boosting measures in the interest of a capitalist economic recovery. But those who imply underconsumptionists on the Marxist left are harbouring a similar appetite for reform are stretching things quite a bit since the debate crosses tendency lines. If and when we should ever arrive at a point when the question of power is posed, if history is any guide, there will a shakeout on the revolutionary left between those who balk and those who want to advance. But I'm sure in that event it will have everything to do with conflicting perceptions of the balance of forces and tactics and nothing to do with rival interpretations of Marx's theory of crisis, and that you'll find FROP and underconsumptionist adherents in both camps. 
> 
>> On Jan 30, 2016, at 10:21 AM, Rob Hoveman <robhoveman at yahoo.co.uk> wrote: 
>> 
>> In short, different theories of crisis can imply different economic and political solutions. 
>> To oversimplify, if you see crises as a cosequence of a tendency for the rate of profit to fall as living labour, the source of new surplus value, is displaced by investment in constant capital, the product of past or dead labour, which itself is the consequence of the relentless pursuit of higher productivity to give competing capitals competitive advantage, then you will be more sceptical of the possibility of reforming capitalism to make it work better. Crises are built into the heart of capitalism itself. 
>> If instead you believe crises are a product of a lack of consuming power of the working class, or disproportionalities between different sectors of the economy, or the dominance of unregulated finance, then you will be more open to the idea that reforms of various degrees of radicalism may radically improve the situation. 
>> That is one way of looking at the situation. Of course those who reject the Law of the Tendency of the Rate of Profit to Fall (LTRPF) as logically or empirically flawed may still believe that capitalist crises are the product of features that are central to capitalism and it therefore, ultimately, needs to be destroyed as it can't be reformed. The LTRPF theorists are sceptical that other theories of capitalist crisis do that. 
>> Regardless of the political divisions, there is the question of truth, although this tends to get pretty mixed up with the political debate between reform and revolution. Defenders of the LTRPF like Kliman and Roberts argue it is both logically coherent and empirically verified. Critics argue the opposite. These are very difficult issues to resolve. Personally I find many of Andrew Kliman's arguments in Reclaiming Marx's Capital very convincing and Michael Roberts' blog has a continuous wealth of information seeking to back up the LTRPF framework with empirical analysis. 
>> Sent from Yahoo Mail on Android 
>> 
>> On Sat, 30 Jan, 2016 at 4:17 pm, Marv Gandall<marvgand2 at gmail.com> wrote: For example, Charles, here’s a forceful criticism of Roberts, Kliman ( not a Trotskyist), and other FROP theorists by Michel Huddon published by the magazine of the Trotskyist FI. So the political lines all cross on this issue. Frankly, if someone could explain to me the immediate practical implications of these conflicting crisis theories, I’d be grateful. Otherwise, the debate is mainly scholastic. 
>> 
>> http://www.internationalviewpoint.org/spip.php?article1894 
>> 
>> 
>>> Begin forwarded message: 
>>> 
>>> From: Marv Gandall <marvgand2 at gmail.com> 
>>> Subject: Re: [lbo-talk] The next recession 
>>> Date: January 29, 2016 at 7:48:41 PM PST 
>>> To: LBO <lbo-talk at lbo-talk.org> 
>>> 
>>> Is this a Trotskyist-Stalinist thing? First I’ve heard the debate characterized that way. There are differences between Trotskyists over this question and between Marxist economists outside the CP and Trotskyist traditions. 
>>> 
>>> 
>>>> On Jan 29, 2016, at 4:22 PM, Charles Brown <cb31450 at gmail.com> wrote: 
>>>> 
>>>> You know : law of the tendency of the rate of profit to fall causes recessions like Trotskyists say not the restricted consumption of the masses like Stalinists say . So, invest, give the capitalists money , not consumers. 
>>>> 
>>>> Sent from my iPhone 
>>>> 
>>>>> On Jan 29, 2016, at 2:45 PM, "JOANNA A." <123hop at comcast.net> wrote: 
>>>>> 
>>>>> It's investment, not consumption that drives an economy? Really? 
>>>>> 
>>>>> j 
>>>>> 
>>>>> ----- Original Message ----- 
>>>>> Here’s Michael Roberts’ latest, surveying the global economic landscape in light of a stream of data released in recent days and earlier this month by governments, central banks, and international agencies. 
>>>>> 
>>>>> https://thenextrecession.wordpress.com/2016/01/29/the-global-gdp-story/#respond 
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