Doug writes:
> >>Doug thinks Marx was an underconsumptionist; at the same Doug >>subscribes to the wage led profit squeeze thesis. > >See, this is exactly what I was thinking of when I quoted Callari's >observation that VT is a substitute for politics. I don't think you >could ever prove this conclusively one way or the other using >numbers. prove what? problems were surely overcome not by increasing the purchasing power of the working class, against your sometimes underconsumption theory predicts. > But in political terms, it's not the least bit ambiguous - the >ruling class felt like it was losing control in the 1970s. Workers >were sullen and rebellious, against rising rates of exploitation or wages not keeping up with value of labor power perhaps in part as a result of greater tax reductions. > the U.S. lost the Vietnam War, leading to inflationary pressure in the process that threatened workers. >and the Third World was talking about a new world economic order. the terms of trade had turned against OPEC in the 60s; the embargo was as much a defensive as offensive action. > As Paul McCracken's report for the OECD put it (and I wish I could >find this exact quote again, it was a beaut), anxiety over inflation >was inseparable from masses in the streets. The rebels were crushed. > >Doug Which should have led to a much greater recovery in the profit rate than it did if profits/wage ratio was the main independent variable, as you imply when you're not focused on the problem of too high a s/v realizing in Dept II output for which there is insufficient consumer demand. That the crushing did not lead to a full restoration of profitability underlines the importance of the vcc and u/p labor ratio which you want to junk. At any rate, what value theory explains is why this barbaric repression of the working class-- as well as the destruction and devaluation of capital in part effected by Volcker's bankruptcy-inducing high interest regime and regressive tax reform at the expense of social darwinist social policy and the turning of the terms of trade against raw materials producers-- restored profitability (though only in part as Fred M emphasizes) and renewed capitalist accumulation (such that it was). That this is the capitalist way out of crises is explained on the basis of the law of value. Rakesh
