Re: creative destruction

[Jurriaan Bendien <bendien@xxxxxxxxxxxx>]

Chris:

 

Marx does not say that profit and wages are a true zero sum game, this is an inadequate description. This zero-sum game is only a special case, namely the case in which the value product is constant or declining. If the value product is increasing, then both wages and profits can rise, such that the gain of wage earners does not imply an absolute loss by investors, both gain, but in different proportions perhaps. The objective of Marx's concept of the rate of surplus-value is rather to counter the concept of "shares in the value product", which suggests that it concerns a distributional issue which does not involve a structural conflict of interests. It is the structural conflict of interests, however, which constitutes the true zero-sum game. This point is important since, when the value product is increasing rapidly, and all social classes are making gains, then an optimistic ideology develops that there are no more social classes and that real equality of opportunity exists, because no matter what you do, you can make gains, and this promotes altruism. Conversely, a declining value product creates a pessimistic, cynical ideology according to which it is more important to look after one's self-interest, and expectations of being able to realise gains decline also, it seems possible to achieve less than before.

 

Regards

 

J.

----- Original Message -----

From: Chris Burford

To: PEN-L@xxxxxxxxxxxxxxxx

Sent: Monday, July 14, 2003 9:08 AM

Subject: Re: [PEN-L] creative destruction

I had a double take on reading this, as it took me some time to check out it is by Schumpeter.

Apart from the reference to steel and to a 'biologic term' it could have been written by Marx could it not?

- at least that creative destruction is an essential feature of capitalism if not the essential feature

Marx assumes that profit and wages are a zero sum game. In crises of overproduction capital, one way or another, must be destroyed, for the system to get going again. No?

Chris Burford




At 2003-07-12 16:55 -0700, Michael wrote:

I never gave this passage much thought.  Look at the example he uses -- US
Steel, which was a project to limit competitive and eventually, probably
inevitably became a stodgy burnt out testimony to failure.  Am I the only
one to see an irony?



83: "The opening up of new markets, foreign or domestic, and the
organizational development from craft shop and factory to such concerns as
U.S. Steel illustrate the same process of industrial mutation -- if I may
use a biological term -- that incessantly revolutionizes the economic
structure from within, incessantly destroying the old one, incessantly
creating a new one.  This process of Creative Destruction is the essential
fact about capitalism.  It is what capitalism consists in and what every
capitalist concern has got to live in."