Re: (OPE-L) Rising organic composition (was: From Ian Wright on Weeks....)

[Rakesh Bhandari <rakeshb@xxxxxxxxxxxx>]

Title: Re: (OPE-L) Rising organic composition (was: From Ian

Well Allin it's interesting that Michael E and Paul C--despite their grave metaphysical differences--seem to believe that real world capitalism is no where near having exhausted its possibilities for its further development; of course Michael E is more willing announce himself a reformist and gradualist, an adherent of piecemeal transformation on the basis of it being an "unripe time" for any other politics. But the same political orientation would seem to be implicit in Paul's estimation that capitalist mode of production should be capable of further development for another fifty or so years until the demographic conversion finally sets in.

I, for one, would be enthused if they are right; I am very unsettled by the  possibility that they are wrong. These are troubling times--the state has become more authoritarian, inter imperial rifts seem severe, public health problems are profound, colonial occupation has made a come back; social services are being gutted for militarism and rentier capitalism.

You write in response to me.

> On Fri, 30 May 2003, Rakesh Bhandari
> wrote:
>
> > And an unrelated point: that superfluous and idle capital has
> > hitherto warded off the complete collapse of profitability
> through
> > purely speculative investments in the US securities'
> market...
>
> Rakesh, that is complete nonsense.  Capital does not
> "disappear" when
> people use it to buy financial paper, because for every buyer of
> such
> paper there is a seller.  Capitalist consumption, on the other
> hand,
> is a true means of "warding off" overaccumulation.
> Allin Cottrell.

Let me add the next paragraph of my own quote:

> Lenin has already been vindicated
> ironically as the collapse of the
> Soviet Union allowed for a renewal of
> inter-imperial rivalries; the
> collapse of speculative frenzy could
> well mean new inter-imperial
> rivalries for the control of
> potentially productive investment
> outlets for overaccumulated
> capital--Lenin would be vindicated again. (Emphasis
> new)

Well yes speculation is a nonsense solution to overaccumulation. It can pose as one however for some time! Capitalist consumption however only wards off  overaccumulation through the elimination of capital itself--a suicide of the rentier. Yet it's not the elimination of surplus capital which is sought but its profitable employment.

Through consumption capital extinguishes itself or is extinguished; as capital chases itself in a speculative bout, there is the illusion of profit until credit lines, mortgage refinancings and nerve run out. Until a point, those who reap gains from the sale of corporate paper only throw the "profits" back into the speculative wirlwind. Speculative "investment" does not raise the question of the disappearance of capital but the illusion of its capitalistically productive employment. Even those insiders who attracted huge amounts of speculative capital through dubious IPOs may well have invested their 'gains' in speculative 'investments' of their own as this was where the 'profits' were to be had. As the selling began, some doubtless got out before others.

So once that illusion is dissipated, then overaccumulated capital has to struggle to secure control over truly productive investment outlets if it is not to be dissipated in consumption.

The issuance of debt by the government provides another illusory productive outlet for overaccumulated capital. Govt paper was properly classified by Marx, following Sismondi, as fictitious capital. Mattick Sr was one of the first to think through the implication of this classification.  Duncan Foley is one of the few contemporary theorists who  so classifies govt paper (so do Mario Cogoy, Geoffrey Pilling, and Guglielmo Carchedi).

Of course the effects of govt debt spending are not fictitious though the govt expenditure of capital does consume it; the debt financed expenditures may provide effective demand and counteract a deflationary spiral in the short term but usually at the expense of the govt debt financed construction of a military apparatus which may then have to be used (as Trotsky long ago noted) to secure national power and wealth  so that the govt will be able to honor its debt without encroaching on or destabilizing what may still remain an anemic private economy. That is, the govt assets will have to be put to "productive" use.

The point: it's too soon quite unfortunately to write off as antiquated Lenin's vision of imperialism as intensified, nation state-based competition over the control of productive investment outlets and sources of tribute in the world economy. The US installation of a viceroy in Iraq does not bode well.

I would certainly sleep better if you can show me how this is all nonsense. As my posts on value and history were meant to show, I have tired of Marxism. It's a Marxist dogma that the Labor Theory of Value or the theory of the FROP can be derived with the same logical rigor as a theorem in Euclidean geometry; historical materialism makes too much of internal contradictions as the key to history tout court.

Yet my point is that Grossmann seems (unfortunately) to have successfully located the rational kernel in Lenin's catastrophic vision. I wouldn't expect Michael E to take such a theoretical analysis seriously, but I am interested in what you and Paul C have to say about it.

Yours, Rakesh