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Henryk Grossman’s ” Law of the
Accumulation of Capital” and the Internet
"...what is the impact of the accumulation of capital on the process of
reproduction? Can the equilibrium which is presupposed be sustained in
the long run or do new moments emerge in the course of accumulation
which have a disruptive effect on it?"
Henryk Grossman "Law of the Accumulation and Breakdown of the Capitalist
System. 1929. P67.
http://www.marxists.org/archive/grossman/1929/breakdown/ch02.htm
Grossman's supposition (following Marx' analysis in Capital Vl 3 Chapter
XV Section 3) asserts that in advanced capitalism a disjunction occurs
when the growth of the constant capital relative to the surplus produced
by it (s/C) leads to a falling rate of profit and an eventual breakdown
of the system as the amount of surplus produced in not sufficient to
meet the investment needs.
Excerpt from Business Week's article "Will Video Kill the Internet,
Too." 12-6-2010. P43-4
http://www.businessweek.com/magazine/content/10_50/b4207043617708.htm
(Curiously, the on-line version is entitled: "Will Netflix Kill the
Internet?")
"AT&T (T
<http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?symbol=T>)
and Comcast (CMCSA
<http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?symbol=CMCSA>)
will see Internet revenues grow by 5 percent a year through 2020.
Meanwhile, traffic will surge by 27 percent annually, and carriers will
need to increase their investments by 20 percent a year to keep up with
demand. By this math, the carriers' business models break down in
2014, when the total investment needed exceeds revenue growth."
In addition, there is this interesting tidbit on the second page
on-oline P44 print):
"Sanford C. Bernstein (AB
<http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?symbol=AB>)
analyst Craig Moffett has studied the issue from the perspective of the
wireless carriers. As traffic soars, he expects the revenue per megabit
to fall from 43 cents today to just 2 cents in 2014.”
http://www.businessweek.com/magazine/content/10_50/b4207043617708_page_2.htm
Here, the curious business propensity (think oil companies) to reckon
profit on the ratio of return from the circulating capital. In this
case, the 'information packages' (i.e. movies, downloads, etc) are seen
effectively as the circulating capital (v). This all akin to a
capitalist commodity merchant reckoning his rate of profit (P') by his
margin on each good sold.
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