Hi Milton,
> Environmental problems can be said to increase costs--say because
>pollution needs to be cleaned up, or resources become more difficult to
>extract.
Yes, but those costs are ultimately paid to labour or capital (not to nature) and re-
enter the economic circuit. Thus, as long as no barriers to increased use of labour
and capital are encountered (full employment, interest rates hikes by the central
bank, etc.), production should not be affected and overproduction should continue.
And if a barrier is encountered, the economic system can react in several ways.
See lower.
>The "first contradiction of capital" involves inadequate
>demand (or excess capacity), which in Marxist terms is overproduction or
>underconsumption.
Yes, but don't forget that the true cause of this overproduction is increased
productivity.
> I've been thinking lately that the first and second contradictions
>of capital have been countervailing each other: one tends to decrease
>prices, while the other tends to increase them.
I'm not sure this is a good way to think of the issue. Let's focus on something else
than market prices...
I'd rather say that the contradictions countervail each other because the first
contradiction increases productivity while the second one decreases it. When it is
expressed in those terms, it becomes obvious that the contradictions do not
counterveil each other totally because for the first to counterveil the second,
increased capital intensity is needed. And increased capital intensity without an
increase in productivity means lower wages and/or lower profits.
At this point of the analysis, it becomes clear that the effect of the second
contradiction on overproduction depends on the outcome of class struggle. In other
words, the second contradiction raises prices and counterveils the first only as long
as profits are lowered in response to higher costs of exploitation of nature. If
profits
are maintained, overproduction will be perpetuated even if prices don't fall
because wages will fall, production will diminish, and ultimately part of the market
value of capital will be destroyed resulting in an even more acute deflationary
crisis.
If that analysis is worth anything, it means that any attempt to stabilize price in an
environment of scarcier resources and/or stricter ecological regulations is actually
an attempt to lower wages relative to profits (short-term) as well as an attempt to
create or worsen a deflationary crisis (longer term). All hail inflation! Down with
sadomonetarism!
>The price of oil
>reflects, in part, the fact that petroleum is a non-renewable
>resource
Can you tell us what makes you think that? It rather looks like the price reflects in
part that it's scarce. Even if it was renewable, supply limitations would still drive
prices up.
Julien
_______________________________________________
Crashlist resources: http://website.lineone.net/~resource_base
To change your options or unsubscribe go to:
http://lists.wwpublish.com/mailman/listinfo/crashlist
