Business guru supports Marxian law of value

[Chris Burford <cburford@xxxxxxxxxx>]

Consider the evidence...

Gary Hamel of Harvard Business School and "Strategos", guru of enterprise
in the electronic era, was emphasising this week on BBC Radio 4's In
Business programme how the electronic revolution will not protect companies
that did not show expertise.

He strikingly argued that the computerised revolution will have done little
for the profits of the great majority of companies. The gains will have
gone as price reductions to the consumer. Only a small number of makers of
the new means of production will have benefited.

This means that the shake out in the new technology sector is not just a
corrective to the dot com bubble. It is fully consistent with the Marxian
law of value that states there is a finite amount of exchange value in the
world related to the total amount of labour power being sold as a
commodity. Also that once a new method of production spreads through an
economy which requires less labour power to produce the same product of
labour, the exchange value of that product of labour falls.

Technical innovation brings temporary superprofits to the owners of the new
means of production but accelerates the "moral depreciation" (old
translation) of the old means of production. In aggregate there is no more
exchange value to be fought over. A crisis occurs in which there is a
crunch between the falling rate of profit of a larger mass of accumulated
capital, and the limited purchasing power of the masses. What is now
occurring is a synchronised global crunch.

A socialistic global solution can bring about a vaste increase in  useful
products of labour, by disseminating the new technology among *all* the
working people of the world, and regulating its use. But the paradox is
that in real units of exchange value all economic activity will be
depreciated, whatever inflated currency units it is expressed in.

Some limited gains can be achieved by investing in labour power currently
selling way below its competitive international exchange value if it were
truly mobile globally, and that is why a neo-Keynesian solution could bring
temporary respite during this impending global crisis, as well as other
socially progressive benefits.

Hamel's message is ground in by the sort of opinion expressed this weekend
by the chief executive of Oracle, Larry Ellison, who is predicting that
even in the sector of the producers of the new means of production, which
have become indispensible to current competitive business practices, there
will be a contraction of what are currently 10 to 15 major companies who
produce personal computers to about five!

So on theoretical grounds which are being vindicated in front of our very
eyes over the coming year or two, as the world settles into recessionary
stagnation, the technology sector will do little to bolster the average
rate of profit that is being squeezed in most other sectors.

Capitalism is ripe for socialism, on a global basis.

They must be helped to understand that they need us. They must be helped to
come quietly.

Chris Burford


__________________


> From Business Week MARCH 26, 2001
>
>
> Gary Hamel is chairman of the San Francisco office of Strategos, an
> international strategy consulting firm, and author of Competing for the
> Future, a former BusinessWeek management book-of-the-year award-winner.
>
>
> Q: People are talking a lot about whether spending a lot of money on
> information technology makes businesses more profitable. Many will even
> contend that low returns mean that these investments aren't worthwhile or
> won't continue to be made. Is that true? A: Look at electricity, the
> original e. The people who made money were equipment providers like
> General Electric. The people who will make money this time are, guess
> what, the equipment providers.
>
> The profits of companies that electrified their business processes
> actually went down, over a period of 30 years. All the efficiency gains
> they reaped by electrifying their businesses were passed on to consumers
> in the form of lower prices and higher standards of living.
>
> [Federal Reserve Chairman] Alan Greenspan and the average CEO should have
> different views of e-business. For Greenspan, it means higher
> productivity. For the average CEO, it means diminishing profits. It's
> going to be the rare CEO who can go to shareholders and say, here's our
> return from e-business (because their competitors will buy the same
> technology and make the same changes). For the economy, the return on IT
> investment is terrific. But for companies, how do you put a value on just
> being able to stay in business? Because that's what it is about.