[PEN-L:3872] Re: stock market & investment

[dhenwood@xxxxxxxxx (Doug Henwood)]

At 4:56 PM 4/19/96, T1EFRANK@xxxxxxxxxxxxx wrote:

>        The problem, as many have pointed out, is that Keynes was not
>a critic of capitalism.  His own political writings make this clear.
>His object was to try and rescue capitalism from itself.  Which may be
>impossible.

Some quotes from Negri's article (full cite below) make this point, though
I wish he didn't write in that awful pretentious continental style. In the
first part of the article, Negri lays out the threat of the Russian
revolution, which haunted the mind of the capitalists with special pungency
after the collapse of 1929.

<quote>
The crisis [of the 1930s] has destroyed confidence and certainty in the
future, has destroyed capital's fundamental convention that results and
consequences must match up to expectations. So Keynes' first imperative is
to remove fear of the future. The future must be fixed as present. The
convention must be guaranteed.
   Here we have our first precise definition of interventionism. It is no
longer a question of political convenicence, but a technical necessity....
Investment risks must be eliminated, or reduced to the convention, and the
state must take on the function of guaranteeing the basic convention of
economics. The state has to defend the present from the future. And if the
only way to do this is to project the future from within the present, to
plan the future according to present expectations, then the state must
extend its intervention to take up the role of planner, and the economic
thus becomes incorporated in the juridical.... [The state] will not
guarantee the certainty of future events, but it will guarantee the
certainty of the convention.... In effect, the life of the system no longer
depends on the spirit of entrepreneurialism, but on liberation from the
fear of the future.
[...]
   This sheds a new light on Keynes' statement, so often repeated as a
superficial witticism: "In the long run, we are all dead." Here it feels
more like a premonition for the fate of his own class."
[...]
   A second element is added to the definition of interventionism: here the
state is seen as the exclusive collective representation of productive
capital.
[...]
   In short, the new economic model had to eliminate every trace and
possibility of non-consumed, non-inveseted income, every overproduction of
capital, i.e. every disfunction [sic] of circulation. Note that this model
no longer describes forms of behavior - it is prescriptive, it lays down
necessary preconditions.
[...]
   With Keynes, capitalist science takes a remarkable leap forward: it
recognizes the working class as an autonomous moment within capital. With
his theory of effective demand, Keynes introduces into political economy
the political notion of a balance of power between classes in struggle....
But this political objective - which would require working class autonomy
to be forever constrained within a given existing power structure - is
precisely the paradox of Keynesianism: it is forced to recognise that the
working class is the driving motor of development....
  It is here, around this motif, that Keynes' theory reveals itself for
what it is: it recognises and makes use of the powe of the working class,
in all its autonomy. The class can be neither put down nor removed: the
only option is to understand the way it moves, and regulate its revolution.
[...]
  [T]his notion of capital is indeed Utopian - a capital so totally social
that it does not so much refuse to articulate itself via the monetary
mechanism, as refuses to pose itself as a social force for exploitation,
and thus to make itself autonomous, to pose itself as a separate essence
and hegemonic power. It is a short-term Utopia, up until the point where
capitalism takes advantage of the qualitative leap imposed by the struggles
and the crisis, to abolish the most evident distortions in the process of
profit-realisation through the market. Then, once this has been done, there
ensues an immediate mystification of the relationship of domination and
exploitation that exists at the social level. The necessity for this
mystification is the reconstruction of capitalism within a power balance
which, since 1917, has changed in favour of the working class.
<endquote>
  -- Antonio Negri, "Keynes and the Capitalist Theory of the State in
1929," in Revolution Retrieved: Selected Writings on Marx, Keynes,
Capitalist Crisis and New Social Subjects, 1967-83 (London: Red Notes,
1988), pp. 9-42

Once the fear of revolution subsided, and the working class was
domesticated, the concessions of the Keynesian order could be revoked - and
with the collapse of the USSR, the demand for givebacks has intensified. I
think that it's only in this highly politicized sense that Keynesian
uncertainty can be seriously relevant; in "normal" times, convention needs
no great external assistance.

Doug

--

Doug Henwood
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