Re: Re: Massive jump in US population

[Chris Burford <cburford@xxxxxxxxxx>]

OK let me try this.

Bearing in mind that we cannot disprove the significance of any factor
completely, only discuss the likely relative importance.

First can I note Charles's reservation which suggests that the strength of
the US economy may be more to do with extracting extra surplus value from
labour that is relatively underpaid in the colonies and new colonies of the
USA such as in eastern Europe rather than within the borders of the USA.

Hopefully there are some gross figures that would give a bit of a handle on
this question.

But my reaction is that the export of capital to countries with lower costs
of labour power has been going on for more than a century and I do not
think you can show that *all* the increased wealth of the imperialist
heartlands is due to the direct transfer of superprofits. Lenin's emphasis
on clipping coupons at the beginning of the 20th century is certainly not
sufficient to explain the differential growth now.

I would restate my desire to draw attention to the massive secular
movements of labour power into the imperialist heartlands. This is similar
to the way the industrial revolution in each country was fuelled by labour
pouring off the land to the cities, and from Ireland to England.

Clearly labour power that is relatively underpriced can be a source of
additional relative surplus value whether it is within the border of the
USA or in another country so long at the capital is US. However *in
addition* to the actual mass of additional relative surplus value I am
suggesting that a significant and prolonged trickle of new cheap labour
power coming into an established technologically advanced capitalist
economy has an important role in delaying the time in the business cycle
when the accumulation of capital reaches its rate limiting step and the
economy slows down or goes into a recession. This allows capitalist
economies with this favourable inflow of cheap labour to pull ahead of
those who do not have it. The net result is the increased centralisation of
capital in these economies.

Why does it matter that the cheaper labour power is available within the
metropolitan imperialist economy and not just in, say, Eastern Europe?
Because I would answer the most technologically advanced capitalist
production now requires a labour force and a market that has a very high
cultural level (that is a cultural level for the reproduction of capital!).
EasternEurope is not competitive in this sense.

Now my emphasis may, it occurs to me, be heretical in terms of the classic
marxist theory of capitalist cycles. In these the rate limiting step is
when the inexorable tendency of capital to accumulate comes up against the
limited purchasing power of the masses. What I am suggesting is that labour
shortages and a temporarily increased price of labour power may be the
decisive step in limiting the capitalist cycle.

Obviously a number of things could be rate limiting steps if they interfere
with the pattern of circulation of an economy, including for example
limited stocks of fuel. However the new workers will not only provide
additional sources for accumulating capital that little bit longer but
their new wages will also increase the purchasing power of the masses. So
what I am emphasising is not totally incompatible with marxist models of
the capitalist cycle.



Now Adrew Hagen's challenge comes from another, important angle. Even if
what I suggest has been fundamental to the long upward direction of the US
economy in recent years, there is a ceiling now. From the point of view of
the LTV (or as I would always prefer to say, the marxian law of value) the
limited purchasing power of the masses is decisive in an economy that
always has a tendency to produce an "immense accumulation of commodities"
(first sentence of Das Kapital).

For about two years, international commentators have been noting that the
US domestic savings ratio is zero. It has been commonplace to say that the
rising stock exchanges have underwritten the resilient domestic
consumption. It the message of the faltering exchanges has suddenly
translated itself into a judder in consumption in the last quarter of 2000,
Greenspan is absolutely right to act with the haste he has to soothe the
animal instincts of the US stock exchanges.

In 1998 the US was able to cut interest rates because it had the consent of
the other major capitalist powers for doing so. We will see if it can
afford to cut rates this time in what is essentially a domestic economic
scenario, albeit a massive one. If Europe decides not immediately to follow
suit and thinks it can continue to sustain its upturn while having slightly
higher rates, capital might start flowing back from the US to Europe. The
turning point could just feed on itself and become a crisis.

In terms of the marxian law of value, why? Because within an economy the
total exchange value is more or less finite (unless there are new sources
of labour power - see argument above) However cleverly a Federal Reserve
Board fiddles with interest rates, or a Government plays with tax cuts, it
cannot create more exchange value, only the illusion of more exchange value.

If Greenspan is forced to make one more significant interest rate cut and
it is seen as a sign of weakness instead of strength, and if Bush comes in
wanting to add a tax cut, the arrangement could start looking like a system
vulnerable increasingly to wobbles. Once wobbles start they are difficult
to stop.

What would be the reality in marxist terms underlying those wobbles? The
limited nature of exchange value even in the hegemonic US economy, the
immense mass of commodities/services, and the limited purchasing power of
the masses.

I do not want to imply in a simplistic sense that marxism predicts
catastrophe. The US economy remains very powerful on a world stage, and it
will remain a powerful focus for the centralisation of capital.  But even
for it, warm summers may sometimes end. There is still such a thing as
inter-imperialist rivalry, which in suitably coded form, might just impair
the optimum degree of cooperation for the best interests of US capital. I
do not of course rely in any way on the European Central Bank extracting
its revenge, but would enjoy the spectacle, especially if it weakened the
hegemonic power of the USA to run the international financial system. Now
if this could coincide with the sad death of Jesse Helms from lung cancer....

Comments and criticisms appreciated.

Chris Burford



At 14:03 04/01/01 -0600, you wrote:
> You noted that US economic growth of the 1990's coincides with
> population growth, and claimed that the LTV rightly connects the two.
> What, then, under the LTV, would account for the recent decline in
> corporate profits and economic growth?
>
> Andrew Hagen
> xah@xxxxxxxxxxxxx
>
> On Tue, 02 Jan 2001 15:00:23 -0500, Charles Brown wrote:
>
> >
> >
> >>>> cburford@xxxxxxxxxx 12/29/00 02:12AM >>>
> >The astonishing jump in the population of the USA in just a decade perhaps
> >is the real answer behind the astonishing 8 years of unbroken growth of the
> >US economy.
> >
> >Only the labour theory of value explains why more labour power in a society
> >means more exchange value.
> >
> >But only the marxian law of value can explain why a ready supply of cheap
> >labour is a vital resource for capital to continue accumulating and
> >expanding without suffering periodic recessions, or minimising those that
> >do occur.
> >
> >(((((((((((
> >
> >CB: But was the "cheap" labor in the territory of the U.S. or in its
> colonies and new colonies in Eastern Europe especially ?
> >
> >