Interesting exchange on overproduction (from psn-l)

["Charles Brown" <cbrown@xxxxxxxxxxxxxxxxx>]

From: Louis Proyect 

CB: Of course,this discussion has been had many times here and elsewhere,
but I'm ready to go again. 

I really can't see how overproduction and underconsumption are not two sides
of the same coin. If the auto companies' example is an example of
overproduction and it consists of having the capacity to produce 80 million
cars but ability to SELL only 60 million, obviously the other side of
inability to SELL is the "under-BUYING" or underconsuming.

Furthermore, the state of underconsumption derives directly from one of the
most fundamental aspects of Marx's analysis in Vol.I of _Capital_,
exploitation. It results directly from the fact that with exploitation,
workers as a class, who are the great mass of purchasers of means of
consumption, are not paid enough to buy all the personal consumption
commodities they produce. So, it is "underconsumption" directly due to
exploitation. So, I can't see why we wouldn't want to refer to
underconsumption as a way to teach about exploitation. So, underconsumption
is not just because the capitalists , at a given point in the class
struggle, have succeeded in driving the social wage down so low that bare
subsistence is the most that can be expected. That is wrong. The working
class does not have enough income to buy "all" even at points when it wins
wage increases beyond bare subsistence, because there is _always_ extraction
of surplus value, pay for only part of the work day, 

I suppose if as Fasenfest mentions some reformists make underconsumption the
basis for pleas to capitalists for reforms, Keynesianism reforms, then the
point is , of course , that we and Marx are for revolution, not just reforms
( We are for reforms, by the way; May Day's demands were reformist and all
that, for example). But I don't see how that negates the fact that in Marx's
analysis the crises are overproduction/underconsumption crises, because
underconsumption is a necessary consequence of exploitation.

There's a famous quote on this from Marx, which I will look up if this
thread goes.

Charles

^^^^^^^^


.
David Fasenfest clarified some of the differences between 
"overproduction" and "underconsumption." I'd like to add a couple of 
points.
David wrote, "Overproduction refers to the building of excess capacity 
as a result, perhaps, of productivity gains leading to unsold products."
In addition, overproduction is the result of capitalist competition. To 
expand market share, capitalists must invest in expansion of their 
productive capacity. The world auto industry is a classic example. The 
biggest automakers have built plants in all the large world markets--in 
North America, Europe, Asia, etc. They're sharply competing for market 
share. They've built the capacity to turn out about 80 million vehicles 
a year, but they can only sell about 60 million, so they are using about 
75% of their productive capacity, which drastically cuts into the rate 
of return on the capital intensive assembly lines. 

-clip-

The difference between this analysis of "overproduction" and non-Marxist 
analyses of "underconsumption" is, I think, a difference between a 
revolutionary and a reformist analysis. The underconsumptionist 
analysis was explained with great clarity by David Fasenfest:
"Underconsumption refers to the inability of the working class to 
actually consume all that is produced (at the end of the day for Marx 
the capitalist class is a small and ever shrinking portion of 
society)--often because capitalists have driven the social wage so low 
bare subsistence is the most that can be expected. The result is a 
pressure to expand markets to sell the products elsewhere, and can lead 
to excess inventory."
This usually leads to a plea to capitalists or to politicians to 
restrain this race to the bottom, so that capitalists will accept higher 
cost workers, whose greater purchasing power will soak up the excess 
inventory. It often takes the form of calling upon capitalists to be 
less greedy, so that workers can have a greater share of what they 
produce and perhaps thereby be less alienated from capitalism. William 
Greider, especially in his book One World--Ready or Not: The Manic Logic 
of Global Capitalism, exemplifies this approach. 

-clip-
Steve Rosenthal



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