Re: Schumpeter&Equilibrium

[dhenwood@xxxxxxxxx (Doug Henwood)]

At 6:09 AM 4/23/96, rakesh bhandari wrote:

>In fact Schumpeter argues "it is important to argue that interest is only
>the consequence of a special method of carrying out new combinations, and
>that this method can be much more easily changed than the other fundamental
>institutions of the competitive system." (TED, p. 210)

Marx said in TSV that the abolition of interest-bearing capital is
tantamount to the abolition of capital itself - a remark I've been trying
to understand for a couple of years now. He also said in several places
that interest predates capitalism, and only under capitalism is credit
subsumed to the needs of production; usury, he argued, was one of the
things that destroyed feudalism. I wonder now if we are seeing the rentiers
exerting a death-grip on productive capital - I'm thinking not only of the
increasing share of corporate profits devoted to debt service, but the
squeezing of investment in the Third World as a response to what we used to
call the debt crisis, before it was "solved." Credit has served an
important role in fueling capitalist development in Korea and some of the
other Tigers, but not for most of the "developing" world.

>b. didn't the NAZIS also claim, however demagogically, that interest should
>be abolished while they fetishized the entrepreneur, profit and the dynamic
>new combinations he organized?

They sure did - as do many populists of a far less toxic variety. Is it the
ideology of the petit bourgeois, who aspire to grand bourgeois status, but
lack the capital of their own to make it - and who, being thinly financed,
are extremely vulnerable to a downtick in profits and an uptick in interest
rates?

Doug

--

Doug Henwood
Left Business Observer
250 W 85 St
New York NY 10024-3217
USA
+1-212-874-4020 voice
+1-212-874-3137 fax
email: <dhenwood@xxxxxxxxx>
web: <http://www.panix.com/~dhenwood/LBO_home.html>




     --- from list marxism@xxxxxxxxxxxxxxxxxxxxxxxxxx ---