[PEN-L:3859] Re: stock market & investment

[dhenwood@xxxxxxxxx (Doug Henwood)]

At 1:54 PM 4/18/96, ROSSERJB@xxxxxxx wrote:

>     This will be my over and out, unless I am seriously
>provoked.  For your book on Wall Street I think you are
>going to have a hard time using Marx as a "general theory."
>He may have an edge on Keynes with regard to real capital
>investment, the apparent point of your original posting,
>but in terms of explaining what goes on on Wall Street, Keynes
>clearly has it all over Marx, although Marx's analysis of
>financial markets was a lot more sophisticated than most are
>probably aware of.

Sorry to disappoint, but the crux of my argument is fundamentally Marxian,
though I'm not devoting that much space to the man himself. Certainly
Keynes was enlightening on the operation of financial markets - an
understanding he derived in part from playing the game himself. But he
fails in several important ways. He lifted the M-C-M' thing from Marx only
to forget it in the end; if all production is undertaken for money (as it
is), then his policy prescriptions, which tend towards the control of
money, are an assault on the essence of capitalist society itself, not some
mere reforms. But of course he couldn't confront that because of his
loyalties to his class brethren. His preposterous recommendations for the
"euthanasia of the rentier" and "the somewhat comprehensive socialisation
of investment" are equally preposterous, if you take his monetary theory of
production seriously. He failed to recognize that money is a deeply
political institution, and that mucking about with it is to strike at class
relations. But of course Keynes couldn't confront that either, because of
his reticence about class.

Marx's observations about the joint-stock company in K III are rich with
possibilities: shareholders are vestigial for the management of production,
and have nothing to add to (and lots to take from) the process. But they
are increasingly assertive in their control of corporate policies. Where
the credit system once helped capital overcome its limits, the rentier
class now functions as a brake on production (tight money and downsizing,
in particular). There are affinities here to Keynes's critique of the
rentiers, but he had no political vocabulary for smashing them;
"euthanasia" is a very weird choice of words. Who needs the parasites,
other than the parasites themselves?

>     Again, I don't think anybody on this list has seriously
>questioned your arguments that Keynes may have been wrong when
>he asserted in a few places that real capital investment is
>determined by what goes on on Wall Street, etc.  On the other
>hand we have all pointed out that that is only a part of Keynes's
>argument about real capital investment which involves a number
>of ideas that do not appear, or very clearly so in Marx, e.g.
>fundamental uncertainty/animal spirits.

Animal spirits is an important contribution, but fundamental uncertainty
isn't. I think Negri's analysis of uncertainty is highly illuminating -
that it was Keynes's distorted way of talking about the political viability
of capitalism in the mid-1930s, when its life expectancy looked rather
questionable. (Reminds me of that joke about George Burns, who, when asked
several years ago if he traded futures, responded by saying that he didn't
even buy green bananas.) For normal times - and even the turbulent
post-1973 years count as normal in my book - the concept is essentially
useless. As I've said here many times, real investment today is depressed
not by fundamental uncertainty, but by the reasonable certainty of low
returns. And on that topic too Marx had a lot more to say than Keynes.

Doug

--

Doug Henwood
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