Re: [A-List] End of the Business Cycle?

[Chris Burford <cburford@xxxxxxxxxx>]

At 17/12/02 23:57 -0500, you wrote:
> This was posted by me to PKT on February 11, 2000 when the Dwo was
> heading towards 12000.  A few days after, the equity markets started to
> fall and has since lost $8 trillion in market capitalization, the entire
> face value of M3 money supply in 2000, and 80% of GDP.  E-commerce is
> stuck in the mud.
>
>
> End of the Business Cycle?
>
> by
>
> HenryC.K.Liu
>
> 11 February 2000 17:50 UTC


This repost is more than justified. Even if similar posts were sent at
monthly intervals over the last 5 years. The factors that Henry Liu
illustrates, are fundamental.

Yes from a marxian analysis, technology lowers the value of labour power,
as Melvin has been pointing out. Perhaps more of us should do so.

It occurs in the commodity rich imperialist heartlands as well as in the
struggling world.

I interpret HCKL's reference to the decline in government spending as a
share of the national economy, to be a reference also to the importance of
maintaining the circulation of the products of living labour rather than
running the economy with the aim of maintaining the accumulating capital of
dead labour.


> Now, it may be interested to do a role-playing gaming simulation
> execercise:  assuming PK eonomists gain control of the CEA, what kind of
> report would they issue and what different policies would such a CEA
> propose?

This thought experiment is still legitimate. Even more so. It will be
answered better by those with some sympathy for aspects of Keynesianism but
an understanding of its limitations.

I suggest that the only answer is to apply PK solutions on a world scale.
Inflating the currencies of the imperialist heartlands by provided
coordinated cheap credit has merely stabilised their economies into near
stagnation, and at the expense incidentally of pensioned workers.

A stimulus to the money supply, to create spenders of last resort, should
go preferentially to countries where the value of labour power is lowest,
particularly to initiatives that raise the productive relations in those
countries. This indirectly reduces the pressure on the value of labour
power in the imperialist heartlands, and increases the total mass of goods
and services in the world (use values).

It implies a conscious decision to divert the surplus of increasing
technology to developing the poorer areas of the world, while the
economically privileged west concentrates hopefully on restoring the social
and human capital, with the aid rather than the substitution of cheap
electronic communications.

World socialism cannot be imposed by such initiatives. There will need to
be bidding for the increased available development funds on a global basis,
but quality standards of social responsibility as well as commercial
success could be written into perfectly viable commerical models for
implementing such global reconstruction..

The global supervising committee of PK economists should realise the
limitations of their theoretical model predicted by marxist analysis. They
should expect the need for continued destruction of accumulated capital and
try to regulate it is such a way as to minimise the way living capital
usually gets thrown into the gutter as part of this process. The Global
Committee can even unconsciously assist this by a policy of systematically
inflating world money, adjusting the rate only to conform to the apparent
expansion in use values. But it would be prudent to facilitate good
practice initiatives for the destruction of dead labour. Perhaps even
allowing redundant elite servants of capitalism, to work beyond the age of
65 in positions that give them a sense of their human capital, like a
beloved school caretaker, or a diligent stuffer of envelopes for the local
Rotary club.

Yes what the global committee of enlightened PK economists could do, is
certainly not to introduce socialism, well not yet anyway. They could
however treat the whole total mass of global capital as a the product of a
social process of great dynamism, but great inequality of power and
distribution of benefits, with many irrationalities even within its own
terms. By treating the total mass of capital as a social product they would
position the human race better to re-appropriate our alienated productive
capacities.

Yes even in the prosperous capitalist heartlands, which need to sit back
concentrating on social  capital, while new capital investment goes
preferentially to areas of the world where the value of labour power is
lowest. That has the long term goal of maintaining the global value of
labour power, and raising socially rational productivity world wide.

Could the Global Committee of PK economist sell their product? Perhaps, to
coin a phrase, there is no alternative. No even tolerably attractive one,
that is.

Chris Burford

London