I wrote:
> >Most socioeconomic systems -- including
whatever you call the system
> >that ruled pre-capitalist China --
encourage conquest. On the other
> >hand, once capitalism was
established (partly or entirely by luck),
> >its "laws of motion"
encourage reinvestment in economic might.
Doug writes:
> Exactly. But why?
It's capitalist competition that encourages reinvestment in economic might. This is different from the "competition" seen in neoclassical theories, since it involves a constant battle to survive (to avoid becoming petty-bourgeois or worse) by taking advantages of economies of scale and scope, network economies, etc., etc. Competition involves a struggle to attain or preserve a monopoly position or to undermine existing monopoly positions and is inherently dynamic -- and always mixed with monopoly power.
The existence of this type of competition is preserved by the existence of a free-floating proletariat. The reserve army of labor allows the rise of new capitalists ("entrepreneurs" who happen to be lucky enough to have the money or can find creditors) to compete with the old ones. Capitalist competition isn't simply in the product market but in labor-power markets.
This is the theory of capitalist competition that I understand from Anwar Shaikh, John Week, etc.
Jim D.
