Jim D. says:
>[was: Re: [PEN-L:9306] Re: Re: Japan]
>
>I'm familiar with the quotes below, which lean toward an
>"underconsumptionist" interpretation of Marx's crisis theory. I
>think that it represents only one part of his theory, which
>unfortunately was never finished or made into a coherent whole. (See
>Simon Clarke's 1993 book, MARX'S THEORY OF CRISIS, published by
>Macmillan.) The way I interpret the role of underconsumption (in
>_my_ theory, not Marx's) is that it has two possible roles:
>
>(1) in an economic boom, accumulation can go "too far" relative to
>consumer spending, due to wages stagnating relative to labor
>productivity, so that the boom becomes increasingly unstable (since
>investment spending and credit-based spending, especially on
>luxuries, are more unstable than consumption of necessities not
>bought on credit, and because investment creates new capacity that
>must be utilized). This theory makes sense in a "labor abundant"
>epoch, as with the current "race to the bottom."
>
>(2) after the boom collapses, the economy may fall into what I call
>an "underconsumption trap," where individual capitalists strive to
>deal with realization problems by cutting wages and speeding up (or
>stretching out) production, which simply makes underconsumption
>problems worse on the aggregate level. Accumulation might be
>encouraged, but is blocked by unused capacity, excessive corporate
>debt, and the resulting pessimism about future profitability. (These
>three interact and reinforce each other.) This is likely to be
>combined with what Irving Fisher called a debt-deflation depression.
>
>The real world is more complicated than in the model, especially
>when you bring in international economic and political relations,
>but see my article at
>http://bellarmine.lmu.edu/~JDevine/depr/D0.html. In "labor scarce"
>situations, theory #1 doesn't apply, by the way. Something more like
>Marx's original falling rate of profit theory applies.
So, in the case of Japan, it's the theory of the falling rate of
profit, not that of under-consumption, that can account for the
fundamental problem better?
Yoshie
