Re: Jim D.'s Micro Marx

[Jim Devine <jdevine@xxxxxxxxxxxxxxx>]

At 02:45 PM 9/14/00 -0700, you wrote:
> I see a big part of Marx's crisis theory as the build up and eventual
> destruction of fictitious capital -- both a micro and a macro process.
> More like vol. 3 than vol 1.

Of course, Marx's theory is both macro and micro. I'd think of it in terms
of Lewin & Lewontin's excellent summary of dialectics in the afterword of
their DIALECTICAL BIOLOGIST: the whole makes the parts, while the parts
make the whole, as part of a dynamic process. Macrosocietal structures
determine the characters of the individual participants (given their
natural bases), while the micro-level actions of the participants can
either help reproduce the structure over time or lead to (r)evolutionary
(qualitative or quantitative) changes.

The way I see it, capitalist competition (an aggressive  process of
jockeying for position, not a neoclassical static situation) along with the
structural antagonism between classes imposes what I call "costs of not
investing" (in my 1980 dissertation). In plain language, if an individual
capitalist does not expand to keep up with the competitors and to deal with
the micro-level class antagonism that he faces, his profit rate will fall.
(I assume that the vast majority of capitalists are male.) This implies
that for any given situation, the capitalist will invest in constant
capital beyond what we'd think based on the simple profit maximization
logic, which simply ignores the societal content of capitalist production.
The kicker is that this investment doesn't abolish capitalist competition.
So the investment does not promote profitability and can hurt it. In my
dissertation, my main emphasis is on investment in fixed capital, since the
resulting imbalances (excess capacity) persist.

One analogy is with weight-lifters who invest in steroids and other
"performance enhancing" drugs. The investment doesn't abolish the
competition. It also doesn't abolish the "winner-take-all" nature of the
weight-lifters' competition (see Frank & Cook's excellent book, THE
WINNER-TAKE-ALL SOCIETY). The steroids help everyone's ability to lift
weights roughly to the same extent, so that there's no automatic pay-off.
The lifters who were best before are likely still the best. However, the
steroids (a) raise the cost of the job, while (b) causing medical problems,
while (c) not raising the benefits on average. It's a falling rate of profit.

The reason why this doesn't always cause the actual profit rate to fall is
that the efforts by capitalists (not weight-lifters) to survive the battle
of competition can imply a spread into new industries and locales, lowering
costs (as in Ed Wolff's article). It can also lead to a lowering of the
cost of the means of production, though that might simply encourage further
over-investment (since it's cheaper to do).  The falling rate of profit can
always be compensated for by cutting wages and speeding up (or stretching
out) labor. Note that the falling rate of profit is intensified to the
extent that the investment is on "unproductive" projects that simply are
part of the struggle of competition (as with advertising, lawsuits against
customers, and dirty tricks).

Jim Devine jdevine@xxxxxxx & http://bellarmine.lmu.edu/~JDevine "Segui il
tuo corso, e lascia dir le genti." (Go your own way and let people talk.)
-- K. Marx, paraphrasing Dante A.