Having been out of touch with Pen-L for several years, probably when I changed computer, I was delighted to find myself receiving messages again, apparently as a result of a reconfiguration of list settings. I gather I am still a member. I note that many of the names are familiar.
Time presses on all of us, but this theme is especially important. I am not sure how easy it is for lay people without a lot of translation. I would suggest there is a tension in the left wing and marxist perspective on crises between seeing them as part of a homeostatic mechanism and seeing them as a teleological harbinger of the final destruction of capitalism. I think it is wiser to see them as homeostatic. Marx's insights in the Communist Manifesto give hints of this, at a time when his economic ideas were not well thought out. The following formulation in Part 1 probably reflects ideas already in circulation at the time - "And how does the bourgeoisie get over these crises? On the one hand by enforced destruction of a mass of productive forces; on the other, by the conquest of new markets, and by the more thorough exploitation of the old ones." The latter part of the formula is about how rising capitalism seeks out new enterprises for new investments. The first part is I suggest still a profound truth which perhaps seemed more obvious to contemporaries than it does to us today, that it is a cycle of purging, of death, before any sort of rebirth can occur. I suggest that with increasingly sophisticated methods of state intervention in the financial markets, politically the most tactful and smoothest methods to officiate over the destruction of old capital, which causes the mildest possible crises in the circulation of the economy, is inflation, preferably at no more than a few percent a year. *Especially* if it can be disguised in the general expansion of the currency supply that plausibly goes with a story of ever expanding wealth in terms of use values. Expansion of credit is useful for this. Allowing a currency to devalue relative to others is another lesser evil but is also inherently inflationary. It is interesting that inflationary pressures in the US economy are now thought to be spreading to other countries like those of Arabia whose currency is linked to the US dollar. Marxism is noted for searching for a teleological eschatological end to the cycle of crises. But Marx's later work gives good reasons to regard a homeostatic model as the basic model, however class forces organise themselves to manage it. If the proportion of the total exchange value in a society that goes to surplus value to provide interest on capital, must continuously rise for the cycle to continue, it will inevitably come up against a limit on that proportion of total exchange value of the society that is available for consumption by the mass of consumers. - A contradiction exacerbated by the expansion in the productive forces, which comes up against the limited purchasing power of the masses - However that purchasing power is redefined by increasingly creative and wobbly credit instruments, which vanish like morning dew when the heat is on. Although the fundamental tendencies of capitalism towards crisis and monopoly remain, they are heavily disguised by a host of measures invented by the state to smooth out these contradictions and to maintain class divisions promoted by the capitalist system. It need not always be that way but it will take political will. The current political debate about how to distribute tax reductions in order to maintain as much as possible the circulation of the economy, is highly relevant about the political direction of the way out of the latest crisis domestically. Sorry if I repeat things that have been well trodden before, but maybe with the benefit of a sabattical of over 3 years, this formulation helps the ongoing discussion. Chris Burford London ----- Original Message ----- From: "Marens, Richard S." <[EMAIL PROTECTED]> To: "Michael Perelman" <[EMAIL PROTECTED]>; "Activists and scholars in Marxist tradition" <[EMAIL PROTECTED]> Cc: <[email protected]> Sent: Monday, February 25, 2008 1:39 AM Subject: RE: [Pen-l] re: A layperson's guide to crisis theory Steve Pressman and Robert Scott, two fine PKers at the Bruce Springsteen School of Management on the Jersey shore, just published a piece in AER about how debt is beginning (finally) to wear thin as a substitute for the historical pattern of American wage growth, due to the need to service the debt at often usurious rates, a situation worsened, ironically, by the recent change in bankruptcy law. Regarding crisis theory, I found a comment some years ago by B. Fine in Rereading Capitalism helpful. Ultimately the issue is not to carefully distinguish taxonomically between underconsumption, overproduction, overaccumulation, underinvestment etc.. Ben's point was that underlying these categorizations are the contradictions of capitalism that make finding any robust equilibrium between supply, demand, and investment impossible, and any attempt to do so with fiscal or monetary policy, wage arrangements or financial tricks, ultimately kicks the can down the road toward new crises. Marens Sac State -----Original Message----- From: [EMAIL PROTECTED] on behalf of Michael Perelman Sent: Sun 2/24/2008 10:05 AM To: Activists and scholars in Marxist tradition Cc: [email protected] Subject: [Pen-l] re: A layperson's guide to crisis theory Although underconsumption is not the whole story of the limitations of capitalism, it is still a significant factor. Without the buildup of household debt, the economy certainly would have grown much less and possibly could not have avoided a substantial downturn. -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail michael at ecst.csuchico.edu michaelperelman.wordpress.com _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l -------------------------------------------------------------------------------- | _______________________________________________ | pen-l mailing list | [email protected] | https://lists.csuchico.edu/mailman/listinfo/pen-l | _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
