Yoshie Furuhashi:
>
>
> >[Is capitalism suffering from over-production, as some argue, or
> is there a
> >capital shortage bordering on famine, at the heart of the world
> crisis and
> >an indicator that capitalism has entered a historical impasse, as Louis
> >Proyect and I argue?
> >
> >Larry Elliott in today's Guardian says yes, there is a New Economy. He
> >argues there may be a long wave of growth beginning and that we are at
> >the start of a Kondratiev upwave. In future postings I will show why such
> >optimism is misplaced, and why the present world crisis is
> >qualitatively different and much more serious than earlier capitalist
> >crises.
> >Mark Jones]
>
> Several questions. Do K-waves actually exist? If they do as
> observable phenomena, can they be really thought of as underlying
> mechanisms that cause changes within capitalism & therefore useful
> for an attempt at explanation? Why do you think that we have to be
> "at the start of a Kondratiev upwave" if the ensemble of capitalist
> social relations is to reproduce itself? And what do you exactly
> mean by "capital shortage," if not what is meant by business
> propaganda of the 70s, Rakesh Bhandari's theory, etc.?
Yoshie, I clearly intimate above that I don't agree with Elliot. I do not
agree with Anwar Shaikh either: we are not at the start of a new upwave. As
for K-waves in general, Trotsky's criticism of Kondratiev was right (altho
clearly there are some periodicities involved with infrastructure investment
for example, as I mentioned earlier in connection with Kuznets). Trotsky
said:
>>One can reject in advance the attempts by Professor Kondratiev to assign
to the epochs that he calls long cycles the same �strict rhythm� that is
observed in short [business] cycles. This attempt is a clearly mistaken
generalization based on a formal analogy. The periodicity of short cycles is
conditioned by the internal dynamic of capitalist forces, which manifests
itself whenever and wherever there is a market. As for these long
(fifty-year) intervals that Professor Kondratiev hastily proposes also to
call cycles, their character and duration is determined not by the internal
play of capitalist forces, but by the external conditions in which
capitalist development occurs. The absorption by capitalism of new countries
and continents, the discovery of new natural resources, and, in addition,
significant factors of a �superstructural� order, such as wars and
revolutions, determine the character and alteration of expansive,
stagnating, or declining epochs in capitalist development.<<
[Leon Trotsky, �O Krivoi Kapitalisticheskovo Razvitiya� (�The Curve of
capitalist Development�), Vestnik Sotsialisticheskoi Akademii No. 4.
(April-July 1923) ]
I don't know what is meant by "Rakesh Bhandari's theory". As for what I mean
by capital shortage, I'm referring to the absolute shortage of capital which
is the defining characteristic of this period. This is so despite the
appearance of symptoms of over-production. I already mentioned that, even
before considering this capital shortage from the point of view of
value-theory, it is possible to recognise it empirically and even
anecdotally. There is a huge underinvestment in infrastructure renewal, for
example, in many OECD countries, and even when, as notoriously in the UK
right now, the money is available and the political will to spend it,
combined with insistent popular pressure for spending on public sector and
transport projects: despite all this, government find it extremely difficult
to actually spend the money. In the US soem of it is simply being handed
back to taxpayers. This political frailty (in Blair's case) and/or fiscal
impropriety in Bush's, has underlying causes and is not just the result of
inertia or middle class greed.
The same urgent need for renewal is apparent for example in the world energy
system, which I mentioned before: Matt Simmons, admittedly a partial
observer because he is an oil patch invetsment banker, speaks of the need
for a new Marshall Plan for energy, and of the 'perfect energy storm' which
will lay waste to capitalist economies if trillions of dollars are not
invested urgently. Now the oil companies even have some at least of the
money; but they seem unable to spend it, or not enough of it. In Russia,
too, a huge balance of payments surplus of up to $50bn has been accumulated
and hundreds of billions of dollars are being exported, and meanwhile the
Russian industrial, social and energy infrastructure is beginning to
implode. Russian oil and gas production continues to stagnate.
The reasons in the Russian case are usually said to be corruption,
bureaucracy, the lack of a proper regulatory regime, laws on property,
protection of investments etc. But they are more fundamental. There is
considerable surplus capital in the world system, but not enough to mobilise
to overcome the profits crisis. This a classic realisation crisis, but it is
more than that. This relative capital surplus can only be mobilised thru a
crisis which liquidates much of existing constant capital while at the same
time creating room for the wholesale replenishment of fixed assets and
infrastructure on an entirely new technological basis which can raise the
rate of relative surplus value sufficient to valorise the mass of new
capital thrown into circulation. There are almost no signs of this
happening.
Incidentally Russia is becoming a test case of the neoliberal New Economy,
because many of the elements needed for take-off are now in place. The level
of regulatory competence and corruption for example is not worse than in
Syngman Rhee's Korea, where a post-Korean War strategy of import substition
lead to huge growth in what was originally a chaotic and devastated society,
and Rhee engineered the eventual incorporation of S Korea into the world
market not as a primary commodities producer but as an export-platform.
Syngman Rhee, altho a US stooge, nonetheless was able to block US attempts
at privatising state assets and at liberalising the foreign trade regime.
His puppet regime was still able to hold S Korean independence to a
considerable degree while overseeing growth and transformation. If Putin
cannot manage something similar in Russia, than this is further confirmation
that the world has changed radically for the worse since 1952 in terms of
accumulation prospects. For Russia ought to be better placed than Korea was.
Mark Jones
