On Dec 12, 2013, at 12:59 PM, <[email protected]> <[email protected]
> wrote:
"Shane Mage" <[email protected]> wrote:
> The actual short-term changes in profit rates do of course vary
substantially
> and can rise as well as fall. To understand how and why, see my
discussion
> on the MR page of the counteracting and aggravating factors!
I am having problems accessing the MR web site (staff is working on
the problem).
Can and would you post your discussion on the counteracting and
aggravating factors?
"Defeating the Law. Faced with this historical tendency toward ever
falling profitability of the social capital, painfully manifest in
every period of crisis, each capitalist ruling class attempts to
reverse it in various ways. These ways go outside the bounds of the
closed-system model used to derive the Law. Marx outlines five such
"counteracting causes": raising the intensity of exploitation;
cheapening the elements of constant capital; depressing wages below
their value; relative overpopulation; foreign trade. Since the
tendency to be counteracted expresses at any time given rates of
exploitation and organic composition, the counteracting causes (which
are not independent of each other) must take effect through raising
the former or diminishing the latter.
--raising the intensity of exploitation. This is conceptually distinct
from the systemic economic tendency for increasing organic composition
to produce relative surplus-value. Exploitation is also increased by
extraction of absolute surplus-value, through intensification of the
labor-process itself by forcing laborers to work harder and faster for
the same wage. The intensity of work, which the working class always
tries to minimize and the capitalist class to maximize, is itself on
average the resultant of the balance of class forces. To raise it,
thus, requires capital to win a battle in the class struggle. For
that advantage to be durable, not to be reversed by the working class
when the next prosperity-phase restores its bargaining power, means
that a new social norm of intensified work would have been
established. Thus even were the total amount of surplus-value, and
hence the rate of profit, to be durably increased, that would
constitute only a one-time gain. Starting with the next cyclical
upswing all the forces tending to reduce profitability would return to
full operation.
--cheapening the elements of constant capital. As shown above, this
cannot by itself have any tendential effect on organic composition.
What is involved is circulating, rather than fixed, capital. Such
cheapening works to reduce the value of the inventory component of the
capital stock, and to that extent it lowers organic composition and
raises profitability. But unless they express increasing average
productivity of labor (in which case it would, as has been shown,
merely reflect increasing organic composition) such instances of
cheapening are merely one-off gains that do not effect the long-run
tendency of profitability to fall.
--depressing wages below their value. The value of the real wage
signifies the cost of reproduction of labor-power. This value declines
tendentially with growth in labor productivity, even though real wages
have tended to increase over the long course of capitalist development
(a tendency that Lenin called a "law of increasing requirements"). To
depress wages below their value, at any given time, means to depress
the real wage below its historic social norm--to depress the standard
of life of the working class. Economically, the only barrier to this
is the level at which immiseration directly impacts labor
productivity, and presently in advanced countries there seems to
remain a considerable margin before that point is reached. The real
obstacle is always the power of the working class to resist
immiseration, for popular unrest is always at its most explosive when
living standards are under attack. It is this point which gives
Marx's Law its most pointed political relevance, especially in the
present context of systematic attack on popular living standards
throughout the Western capitalist systems.
--relative overpopulation. Long-term increase in the industrial
reserve army, through recruitment of workers from low-productivity or
noncapitalist lines of production (like subsistence farming), both
depresses real wages and provides labor-power for lines of production
with low organic composition. This is perhaps the most visible of all
the counteracting factors, in the form of mass immigration from
colonial or semi-colonial societies (Latin America, Africa, Eastern
Europe) into the advanced Western economies or, in China, India,
Brazil, etc., from an impoverished peasant hinterland into mushrooming
industrial cities. Though this process can persist long-term there
also are definite limits: demographic (decrease of potential
recruits), economic (local industrialization), and social (popular
resistance to the disruptive effects of large-scale migration).
Moreover, as migrants assimilate they become a full part of the
working class and so disappear as an independent counteracting factor.
--foreign trade. This sustains profitability in two ways: the
Ricardian mechanism of specialization in high relative productivity
industries; and the availability of cheap consumer goods and raw
materials. These are basically instances of raising relative surplus
value, either by raising average physical productivity or through
lowering the value of the real wage and of material inventories. But
they are short-term factors. Trade among capitalist systems can never
negate the long-term tendencies at work in every one of those
systems. Even a totally globalized, frontier-free, capitalist system
would merely combine each system's own law of the falling tendency of
the rate of profit into a law of the whole world system.
Aggravating factors. Over the century-and-a-half since Marx formulated
his Law, three tendencies far more important than all the
counteracting causes put together have manifested to intensify the
consequences of the Law. They are the ecological crisis of the planet
(especially global warming), the depletion of essential natural
resources (fisheries, land, fresh water, and minerals), and the
bureaucratization and financialization of the capitalist economy.
This is not the place to detail their vast scope. Suffice it to state
that they impose enormous and unaccounted costs from natural disasters
and cleaning up (or, worse, not cleaning up) pollution; multiply
natural-resource rents to parasites like the Russian ex-nomenklatura,
the Gulf monarchs, or the Koch brothers; and divert resources on the
largest scale to unproductive activities and unproductive capital. As
surplus-value is swept into rents and interest and executive loot the
amount left for profit-of-enterprise, the source and motive of new
productive investment, is constantly diminished while the real
(environmental) cost of production is forced ever higher. Even as
technology increases the gross productivity of labor, its net
productivity comes under
always-increasing pressure. The peau de chagrin continues ever to
tighten."
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