I wrote: > > the key issue is whether or not the profit falls due to (1) wages rising > > relative to labor productivity (i.e., a fall in the rate of surplus-value > > due to a rise in the value of labor-power) or (2) a rise in the organic > > composition of capital [the OCC] (i.e., a fall in the value of output > produced > > compared to the value of the means of production) due to excessive > > mechanization. > > > > Some "orthodox" Marxists see #1 as heretical,
Rakesh writes: >No Jim Marxists don't see #1 as heretical but as theoretically suspect and >empirically disconfirmed. No, I didn't say "Marxists": I said <quote> "orthodox" Marxists <unquote>. Also, note the word "some." I was not lambasting "Marxists" or even all self-styled "orthodox" ones. Instead, I was suggesting that both the "orthodoxy" and the "unorthodoxy" present _incomplete theories_. Rakesh, it's best to read what people say _in context_. >Theoretical analysis reveals that accumulation puts upward pressure on the >OCC; This is extremely controversial: raising the "technical composition of capital" (roughly the machine/labor ratio) which should raise the OCC _also_ raises labor productivity, which undermines the rise in the organic composition by lowering the value of machinery and other means of production. What that means is that whether or not the OCC rises is _historically contigent_, not some transhistorical "law" of capitalism. The data suggest that the OCC rose during some periods -- especially the "industrial revolution" phase of now-rich countries like the U.S. -- but then leveled off in the trend. (Of course, one can always re-measure the OCC to make it rise, but I find that kind of study to be doubtful: the best studies emphasize the ratio between the value of fixed means of production and that of net output, because it indicates whether or not any rise in the OCC is significant.) >therefore, the reserve army of labor should not be easily >exhausted. Accumulation should not founder on a shortage of labor and a >consequent rise in money wages. Whether or not the reserve army is exhausted is also historically contingent. During the late 1960s in the US (and maybe Western Europe), it effectively was. It's possible in the future, but not at this point. (Note that I didn't mean to refer to "money wages." Instead I should have made it clear that I meant "real wages." I am sorry that I didn't make this clear.) >Plus, with a continuous depreciation of unit values, even a slow rise in >the money wage implies a higher rate of >exploitation (even as the real wage increases)--I am assuming here a >constant value of money as Marx does in his theory. The value of money is irrelevant in this context. But notice that I referred to (real) "wages rising relative to labor productivity." So I dealt with this point in my (excessively short) discussion. >For such reasons, it is difficult to imagine accumulation being choked by >a rising rate of exploitaiton. I referred to a _falling_ rate of exploitation -- but a rising rate of exploitation can also be a problem, since it implies that (all else constant) consumer spending is stagnating relative to output. As I noted in my 1994 RESEARCH IN POLITICAL ECONOMY article, that can cause problems. Of course, under some circumstances (what I've called a "labor scarce economy," though I'd like a better term), a _falling_ rate of exploitation can also happen, lowering the rate of profit _ceteris paribus_. One way of summarizing the result is to use Marx's phrase about a contradiction between the production and realization of surplus-value: --- when the production of surplus-value is easy (for the capitalists, natch), realization problems hover and can pounce (as in the late 1920s & perhaps the late 1990s); --- on the other hand, when realization is easy (as in the late 1960s), the production of surplus-value can be extremely difficult, too. This doesn't work well for dependent countries, but it does for rich countries like the US. Also, this formulation doesn't explain why capitalism ends up at either pole. That's why the theory of over-accumulation is needed. (This is still pretty abstract and more specific historical information is needed.) >It is however easier to understand why in the face of worker resistance >the rate of exploitation may not increase sufficiently to counteract the >FROP [falling rate of profit] from upward pressure on the OCC. I don't see why "worker resistance" is always secondary to the alleged rise in the OCC. Class antagonism and conflict is a basic element that defines capitalism and other exploitative modes of production. One of the key reasons for capitalists' efforts to raise the technical composition of capital -- in addition to the aggressive process of competition amongst capitalists -- is that it's a way to try to deal with (suppress) class antagonism on the job. Of course, a "technical fix" often fails, so it's tried again. >As you know, Fred [Moseley?] also argues that #1 can be empirically >disconfirmed. The rate of exploitation has not been attentuated; as is >well known, Fred supplements the OCC theory with the addition of the >unproductive/productive labor ratio. I find the idea that #1 can be knocked down by including "unproductive" labor costs as part of surplus-value -- as Fred does -- to be unconvincing. Surplus-value is supposed to be the basis for accumulation. The spending on unproductive labor is not. So we should look to what Fred calls the "conventional rate of profit," which treats unproductive labor costs as _costs_. At best, Fred's theory is a version of the labor-squeeze theory of the falling profit rate: capital's dynamics lead to excessive spending on labor (from the perspective of capital as a whole), specifically spending on "unproductive" labor. That's _prima facie_ plausible, but needs more work. Its validity would likely depend on historical circumstances. >I find it quite objectionable that marxists are called orthodox believers >who are concerned with heresies. But it's just bourgeois economics in >radical disguise slinging mud. As I said above, I referred specifically to "'orthodox' Marxists" -- and was NOT criticizing Marxists in general (or even "orthodox" ones in general). As I said, I think that the idea of a "Marxist orthodoxy" doesn't make sense: Marxian political economy has always been a _debate_, not an orthodoxy. Howard & King's two-volume history of Marxian economics makes this clear (though they consistently take sides in the debates, often hurting their presentations' completeness and fairness). I'm glad it's implied that I'm a "bourgeois economist in radical disguise." That hopefully counteracts being called an apologist for Osama bin Laden. > > Some "unorthodox" Marxists see #2 as old-fashioned, the Marxism of the > > second & third internationals, in which capitalism automatically > > self-destructs due to the falling rate of profit, so that the role of > class > > struggle is secondary. > >Mattick and Grossmann showed how off base this interpretation of their >work was time and time again. No attempt is ever made to work through >their writings and rejoinders to see if this subordination of class >struggle really haunts their outlook. To be sure, both thought that the >overthrow of the system required some objective weakening of it, but >neither thought that the system would >overthrow itself. Even though I find these two authors' works to be doubtful (though I haven't read enough of their work to be sure), I agree that this "unorthodox" Marxist view is incomplete, one-sided. Just like the kind of "orthodox" Marxism I referred to. That was my point. If you say that no-one believes in the theory of the automatic self-destruction of capitalism, you're right in general, but I have met people who do. > > For me, the phrase "orthodox Marxism" is an oxymoron, while "unorthodox > > Marxism" is redundant. I would emphasize both: capitalist accumulation > > leads to over-accumulation and crisis (a very general phenomenon) -- while > > class struggle within the context set by capital accumulation helps > > determine the form (and specifics) of the crisis, i.e., falling rate of > > profit due to excess mechanization, underconsumption, > > high-employment/high-wage profit squeeze, scarce raw materials profit > > squeeze, or a combination of these. Rakesh: >A marxist does not deny the possibility of an underconsumption crisis. What >Mattick argued was that insufficient demand was itself the result of a crisis >in accumulation engendered by an insuffiency of surplus value *in the process >of production* which thus retains its explanatory primacy in accordance with >historical materialist theory. "an insufficiency of surplus value in the process of production"? during the 1920s in the US, when labor productivity in manufacturing soared relative to real wages? that's an "excessive sufficiency" of surplus-value in production. > Erik Olin Wright understood this well. where? >And Jim if you say that crises can be caused by any one of multiple >factors, I don't see how you have a theory of crisis any more. We might as >well read the WSJ. You clearly didn't read what I wrote. Again, go look at the 1994 RESEARCH IN POLITICAL ECONOMY article. It appears at: http://bellarmine.lmu.edu/Faculty/JDevine/subpages/depr/d0.html or http://bellarmine/~Jdevine/depr/d0.html. I hope that the insulting reference to the WSJ also helps counteract the insulting suggestion that I support ObL. With luck, all insults cancel out. For me, they simply indicate the quality of those who use them. Jim Devine [EMAIL PROTECTED] & http://bellarmine.lmu.edu/~jdevine
