Re: [Marxism] Eight Theses on the Economic Crisis

[D OC <donaloc@xxxxxxxxxxx>]

> First, can this really be claimed to be the cause of the crisis and not a 
> symptom. 

 

IMO, this is not a crisis caused by the tendency of the rate of profit to fall 
- the tendency is true but it is limited in impact by the fact that the world 
economy is not in 'perfect' competition. The evidence is that production will 
remain very profitable for the foreseeable future - the problem is that cash 
has just dried up due to deleveraging in the credit market. I believe that the 
current crisis was rooted in the disjunction between the amount of money being 
paid/recycled to imperialist nation consumers and the overall cost of produce 
that they were consuming.

 

> Second, what role did the commodities bubble play in both causing the FROP 
> and/or how did the FROP in
manufacturing cause the bubble. 

 

I don't necessarily believe that the problem has been a fall in the rate of 
profit so much as a collapse in consumption. This would cause accumulation to 
stop irrespective of the rate of profit. The non-productive asset bubble 
enabled further consumption to occur beyond the natural tipping point and 
facilitated a further over extension of credit markets. Now the debt will have 
to be paid. The only way that will happen is to lower living standards in real 
terms (both through slash and burn policies and currency devaluation) and to 
thereby redress the production-consumption disjunction. The option of 
expansionary pump-priming is on the table but it is unclear how well this will 
work against such an imbalance in productive trade.

 

> Third, how is it related to what you said about the resolution of the 2001 
> almost crisis. Lastly, is there a way to
stitch together an analysis that would include the changes in finance to FROP 
theory. How did the developments of finance alter the possible options of 
capital going forward from the mid-1990's (or earlier) to feed into the crisis 
potential which ultimately led to the situation we are in now (for surely this 
is not just another FROP crisis but is much bigger in
breadth and depth).

 

I believe that we must assess to what extent modern day finance reflects 
underlying value and to what extent it is mere vapour. Similarly with 
monetarist theories of the supply of money affecting prices. This is all 
hogwash from a materialist perspective - particularly since the gold standard 
went belly up. All the same it has massive implications for the capitalist 
superstructure and can impact hugely but not in the way that monetarists 
conceive it. As yet, I have seen nothing which sets out a materialist analysis 
of modern finance. Perhaps someone will be able to direct me to something??

 

This from Capital 1 is good stuff which is somewhat relevant.

 

> We see thus: In the first case, it is not the diminished rate either of the 
> absolute, or of the proportional, increase in labour-power, or labouring 
> population, which causes capital to be in excess, but conversely the excess 
> of capital that makes exploitable labour-power insufficient. In the second 
> case, it is not the increased rate either of the absolute, or of the 
> proportional, increase in labour-power, or labouring population, that makes 
> capital insufficient; but, conversely, the relative diminution of capital 
> that causes the exploitable labour-power, or rather its price, to be in 
> excess. It is these absolute movements of the accumulation of capital which 
> are reflected as relative movements of the mass of exploitable labour-power, 
> and therefore seem produced by the latter’s own independent movement. To put 
> it mathematically: the rate of accumulation is the independent, not the 
> dependent, variable; the rate of wages, the dependent, not the independent, 
> variable. Thus, when the industrial cycle is in the phase of crisis, a 
> general fall in the price of commodities is expressed as a rise in the value 
> of money, and, in the phase of prosperity, a general rise in the price of 
> commodities, as a fall in the value of money. The so-called currency school 
> concludes from this that with high prices too much, with low prices too 
> little [8] money is in circulation. Their ignorance and complete 
> misunderstanding of facts [9] are worthily paralleled by the economists, who 
> interpret the above phenomena of accumulation by saying that there are now 
> too few, now too many wage-labourers. 

 

Two things of relevance to issues being discussed:

 

(i) commodity prices naturally rise just before a crash - I read something even 
more explicit by Marx on this recently perhaps someone else can find the exact 
quote - and I noted similarities with the oil/commodity spike of last 
Autumn/Winter. I think that this is a natural trend reflecting (a) rising cost 
of labour power being eaten up by price inflation (b) lower relative 
consumption growth at tipping point diverting capital to perceived 'growth' 
sectors (c) concern as to market volatility leading to capital being 
concentrated in raw materials e.g. oil/gold/copper etc. Obviously this creates 
a further inflation in commodity costs.

 

(ii) The criticism of monetarist (currency school) theory at the end.

 

I would be interested to find out whether there was any increase in the cost of 
labour power in China or other third world centres of production. I doubt it, 
as the supply of labour is such that demand would be insufficient to create any 
rise. That being the case would likely indicate that this crisis is long-term 
and that it is unlikely that any stimulus package would pull imperialist 
economies out of the doldroms for anything but a few years. 'Leakage' is too 
high to allow multiplier growth in Keynesian terms. In the meantime, the cost 
of such stimulus will further negatively impact the economy and standards of 
living.

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