Workers-Control-Over-Prod
3rd October 2012, 22:41
As we saw previously (http://www.revleft.com/vb/rate-profiti-t175367/index.html?t=175367), the Surplus that the individual worker produces, falls as the Capitalist introduces proportionally more machines in place of live labor in the production process.
http://www.revleft.com/vb/attachment.php?attachmentid=8899&d=1349299999
But it is correctly the "Tendency" for the Rate of Profit to Fall. Profitability does not fall in a straight line, it fluctuates according to varying factors. The Rate of profitability can be "artificially" raised by, a) increased rate exploitation (think Austerity, Fascism etc.) and arguably, b) increased markets to capitalise upon.
The Capitalist can cut his "costs" of variable Capital, cut workers benefits, increase work hours, cut workers pay and the like to increase his firm's profitability. But on the other side, if a lot of Capitalists do this in times of general low rates of profitability and accumulated debts, consumer markets are destroyed as workers' pay is slashed (US median income has fallen 8% since 2008; Greece, Spain, Italy austerity programs and so on); the Capitalist that thought he was "smart" by "rationalising" his firm, is caught by the overall recessionary economy on his demand side while he was trying to deal with falling profitability. With diminishing market demand, firms that do not "rationalise" even further (fire workers, cut wages etc.) and do not restart growth, have to cancel on their debt and go bankrupt.
If there are large numbers of new markets to Capitalise upon (such as the 1990's of the internet bubble and the overthrow of Socialism), then the Capitalist is not affected much when "rationalising" his own workers.
The Falling Rate of Profit hence stems real underlying and systemic problems to Capitalist Accumulation. Now, China has been Capitalised upon, and there are no large markets to capitalise anymore. A bubble as large as the Internet boom is not foreseeable. The Bourgeoisie's politically hegemonic doctrine is now austerity, a viscous attack on working people's living standards is its natural path to dealing with low rates of profit.
This increase of the rate of exploitation, worker lay-off (large unemployment), to large bankruptcies and Destruction of Capital Value that we will see in the looming crisis, might raise the profitability of investment into the general lowly profitable economy, but it is unable to undo the inevitable automation of production that we are beginning to see ('The Third Industrial Revolution begins (http://www.economist.com/node/21553017)') and hence decrease of the rate of profit of the production process.
http://www.revleft.com/vb/attachment.php?attachmentid=8899&d=1349299999
But it is correctly the "Tendency" for the Rate of Profit to Fall. Profitability does not fall in a straight line, it fluctuates according to varying factors. The Rate of profitability can be "artificially" raised by, a) increased rate exploitation (think Austerity, Fascism etc.) and arguably, b) increased markets to capitalise upon.
The Capitalist can cut his "costs" of variable Capital, cut workers benefits, increase work hours, cut workers pay and the like to increase his firm's profitability. But on the other side, if a lot of Capitalists do this in times of general low rates of profitability and accumulated debts, consumer markets are destroyed as workers' pay is slashed (US median income has fallen 8% since 2008; Greece, Spain, Italy austerity programs and so on); the Capitalist that thought he was "smart" by "rationalising" his firm, is caught by the overall recessionary economy on his demand side while he was trying to deal with falling profitability. With diminishing market demand, firms that do not "rationalise" even further (fire workers, cut wages etc.) and do not restart growth, have to cancel on their debt and go bankrupt.
If there are large numbers of new markets to Capitalise upon (such as the 1990's of the internet bubble and the overthrow of Socialism), then the Capitalist is not affected much when "rationalising" his own workers.
The Falling Rate of Profit hence stems real underlying and systemic problems to Capitalist Accumulation. Now, China has been Capitalised upon, and there are no large markets to capitalise anymore. A bubble as large as the Internet boom is not foreseeable. The Bourgeoisie's politically hegemonic doctrine is now austerity, a viscous attack on working people's living standards is its natural path to dealing with low rates of profit.
This increase of the rate of exploitation, worker lay-off (large unemployment), to large bankruptcies and Destruction of Capital Value that we will see in the looming crisis, might raise the profitability of investment into the general lowly profitable economy, but it is unable to undo the inevitable automation of production that we are beginning to see ('The Third Industrial Revolution begins (http://www.economist.com/node/21553017)') and hence decrease of the rate of profit of the production process.