USA Industrial Production and Capacity Utilization

[Workers-Control-Over-Prod]

"Capacity Utilization" is the term that the FED statistic bureau use to analyse how many percent of capable production facilities are being used. The current "total industrial capacity utilization" for the first quarter of 2012 is at 78%, meaning 22% (nearly a Quarter!) of factories, mines, work offices etc. are currently not being used, gathering rust and dust.


The level in the fourth quarter [for total industry capacity utilization] of 2011, [was] at 77.8 percent.
. . . The selected high-technology industries were operating at a capacity utilization rate of 75.1 percent in 2011.

It is quite a clear trend that, even though "hi-tech industries" are highly subsidised by social wealth, taxes; they are the more unprofitable sector for capital compared to average total industry.

*The first image ("production-capacity usa.pe ng") shows clearly how more severely affected the high tech industry was during the stock market crash of 2000, falling from around 90% production capacity utilization to 60% within a year.

**The second image ("img2-capacity-utilization-stage.png") shows clearly where the cause for this mysterious phenomenon lies, after all, capitalism is supposed to be "the most innovative, wealth creating system!" which seems to not fit here. What fits here more is a description of "the most effective exploiting system": Crude processing (which uses masses of live labor, such as mining for example) production capacity utilization for 2011 was at around 90% while the primary and semi-finished (more technologically advanced sector) processing capacity utilization was at 75% in the same year.

In my opinion, further demonstration of the fact that Marx's Labor Theory of Value was correct and that "Capital is dead labour, that, vampire-like, only lives by sucking living labour, and lives the more, the more labour it sucks."

[u.s.red]

In my opinion, further demonstration of the fact that Marx's Labor Theory of Value was correct and that "Capital is dead labour, that, vampire-like, only lives by sucking living labour, and lives the more, the more labour it sucks."

I think it also proves that the "relations of production" are a restraint on the "means of production." Production capacity (the means) is 25% or so lower than it could be because of the failure of the relations (the free market, employee-employer, wage-capital, relations, etc.) of production.

It also may demonstrate one of the contradictions of capitalism. Full production means full employment which means high wages. Full production leads to overproduction, markets are glutted, production is slowed and a new crisis comes on. High wages also means low relative profits, consequently, the capitalist begins to withdraw capital from production expecting higher profits. Productive capacity is thus cut back. Schumpeter calls this "creative destruction."

Another issue is the inability of capitalism to re-absorb the profit created by the production process. Instead of being re-absorbed the additional profit is wasted on rusting factories, unemployed workers and Wall St. gambling.

However, since about 1935, it seems that Keynesianism has managed to maintain capitalism on a more or less "moderate" track, mainly by paying people not to work, social security, unemployment compensation, food stamps, etc. or by grotesquely wasteful work, such as building gigantic aircraft carriers. If the Greek people are saying they are not going to accept "austerity" then the whole house of cards will come down.

[Workers-Control-Over-Prod]

I think it also proves that the "relations of production" are a restraint on the "means of production."

Yes, very well put. I am going to make a new thread right now with a graph of the USA's "Industrial Production Growth" here in the Economics thread.