A Problem in Marxist Economics

[redstar2000]

Houston, we have a problem. -- Apollo VII

I know the feeling; we have one in the area of Marxist economics...and it's a big one.

I've recently read two books--Marx--a Radical Critique by Alan Carter and Debunking Economics--The Naked Emperor of the Social Sciences by Steve Keen. Both of them contain extremely sharp and very technical critiques of the "labor theory of value".

So what? So this. It's Marx's labor theory of value (taken from Ricardo) that underpins his "tendency of the rate of profit to fall over time". It is that tendency, according to Marx, which generates crises of over-production in the normal course of capitalism and, according to the vivid account in the first volume of Capital, the final crisis in which capitalism "melts down".

Take away the labor theory of value, lose the tendency of the rate of profit to fall over time, and you lose the "inevitability" of capitalist crises...including the final one.

Capitalism could endure and even flourish indefinitely.

Pretty big problem, right?

None of us here are trained economists, I presume...so the technical attacks on the labor theory of value are probably beyond our ability to refute--in my case, beyond my ability to understand. (!) We can "hope" that some brilliant young Marxist economist will tackle this problem and solve it.

Meanwhile, what to do?

We can empirically observe that capitalists constantly seek to reduce the cost of labor as a proportion of production costs. Any time they can force a reduction of wages, a reduction in the number of employees, an increase in machine/computer labor and a decrease in human labor...they do it. They act "as if" the labor theory of value had some kind of validity, regardless of theoretical critiques. The more production they can squeeze out of each "unit" of labor power that they purchase, the better they like it--the more they profit thereby...or think they do.

But what we really need here is an empirical justification for "the tendency of the rate of profit to fall over time". If we had that, then it would not matter whether the labor theory of value was correct or partially correct or just plain wrong. We would have a "proof" that the life-span of capitalism was limited and not infinite.

Easier said than done.

We can't just look, for example, at corporate tax returns. The numbers on those returns can be legally manipulated in many ways to shrink or inflate both corporate income and profit...and, as we have seen in recent years, they can also just outright lie.

Nor can we rely on something simple like the ratio of dividends to share-prices. The fashions in business are such that an increase or decrease in dividends is an arbitrary decision that appears to bear little relation to the actual profitability of any particular corporation. Companies admit losing money but still pay the same dividends; companies report huge increases in profits but keep the dividends the same. Some major corporations pay no dividends at all--the investor's profit is supposed to come from increases in the share prices.

The truth is, the actual amount of "profit" that a corporation says it made in a given year is an arbitrary number...that may be fairly close or may be very distant from what the real number would be--if there were any way to figure that number out.

In addition to these difficulties, there are also some minor problems...the span of time must be long enough to show a pronounced trend, the sample of businesses must be approximately representative of the economy as a whole, etc.

It would be a huge and complicated job!

I suspect that's one of the major appeals of economic theory...as "hard" as it is to do, it's still a lot easier than actually gathering empirical data on what really happens in a capitalist economy. Neo-classical bourgeois economic models are notoriously inaccurate when applied to the real world.

Should the neo-liberal economic policies of "Anglo-American" capitalism win out over the planet, we will return to the era of global economic crises--IF Marx was right. In that case, it may not matter--ultimately--if the labor theory of value was correct or not. We will still see something like the 1930s great depression...only even more severe. The economic melt-down in Argentina may be an early taste of what is in store for the advanced capitalist countries in the rest of this century.

In the meantime, if some bright and energetic young folks would subject the "tendency of the rate of profit to fall over time" to an empirical test, they would thereby do the communist movement a great service.

After all, the very thought of a capitalist system that could exist indefinitely is rather...discouraging!

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[Bradyman]

Perhaps I don't understand, but do we not have enough justification?

Have there not been countless depressions and recessions throughout capitalist economic systems. Indeed, just in America here are a few: 1870s recession, Great Depression of the 1930s, Recession of the 1970s, recession in the late 1980s.

What more do we need? Do these cyclic depressions not show that capitalism is unstable at its very core?

[redstar2000]

Have there not been countless depressions and recessions throughout capitalist economic systems?...What more do we need? Do these cyclic depressions not show that capitalism is unstable at its very core?

Well, yes and no. They do indeed show that capitalism never reaches the "equilibrium" so beloved of neo-classical bourgeois economists.

The Austrian/Chicago school of bourgeois economists say that doesn't matter...no matter how large the "boom" or how devastating the "bust", capitalism always "naturally recovers".

Global capitalism "recovered" from the great depression of the 1930s by virtue of World War II and the "cold war" which followed.

Capitalism limps on in Argentina...mainly by virtue of a fresh loan from the International Monetary Fund.

And something I forgot to mention in my initial post: Japanese capitalism has been essentially stagnant since the early 1990s...the only reason that it continues to function is enormous deficit spending by the Japanese government.

Those are hardly signs of an economic system that can "naturally" recover from set-backs.

On the other side of the ledger: there have been no "great depressions" since the 1930s. There "should have been" one or several--if not in the U.S., then elsewhere. Recessions...yes. Real economic depressions--as in "crisis"--no.

Periodic instability is not much "help" for us; as long as it is "always" followed by "recovery", people will have no "rational reason" to turn against the system. They will think of "an economic downturn" the way we think about "bad weather"...it "will pass". It "always has".

We can always assert that the time will come when it "will not pass"...but without a solid theoretical or empirical basis for making that statement, we would be going out on an extremely shaky limb. Essentially, our "forecast" would have no more verifiability than some god-sucker's "forecast" of the "rapture".

It's hard to see how an appeal to "faith"--even if secular in nature--can have any good results. Whether it's Bakunin as "church father" or Stalin as "pope", we know that the mind-set of the "faithful" has very little to do with the kind of society that we want or the genuine realization of human potential that we wish to bring about.

Like I said, we have a problem.

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[Blackberry]

Originally posted by [email protected] 27 2003, 12:07 PM
On the other side of the ledger: there have been no "great depressions" since the 1930s. There "should have been" one or several--if not in the U.S., then elsewhere. Recessions...yes. Real economic depressions--as in "crisis"--no.
And that has been no accident either, according to capitalist economists. (This is the part where my capitalist economics class of this year gave me a little knowledge on modern thinking of capitalist economists.)

The reason why there are 'no depressions' these days has been the 'willingness to allow more government intervention to "eliminate" market inefficiencies', they bleat.

If this is correct, then we can expect the policies of a George W. Bush to have devastating effects in the long term, as he is placing too much power in the hands of the 'free' market by making tax cuts, consequently releasing the government's stranglehold with each cut.

The ways in which a government can help '"eliminate" market inefficiencies' is by distributing resources collected by tax and pay for services in which the 'market forces' would normally not pay for.

And indeed, the USA's economy is not looking too hot at the moment, no? It's something to ponder.

Bradyman:


Have there not been countless depressions and recessions throughout capitalist economic systems. Indeed, just in America here are a few: 1870s recession, Great Depression of the 1930s, Recession of the 1970s, recession in the late 1980s.

What more do we need? Do these cyclic depressions not show that capitalism is unstable at its very core?

I'll repeat a little of what Redstar2000 said, and add some more.

There has been a change of thinking since the 1930s in terms of government intervention, like I mentioned above. With more government intervention, there have been no world depressions since.

As for the recessions, capitalist economists claim that this is merely part of the 'economic/business cycle'. They claim that nations will always bounce back from this part of the cycle, because it is the 'law of economics' (that might not be the right term, but it is certainly a 'law').

However, the question is, can they really just keep bouncing back up, thus determining that capitalism will never break as an economic system?

Somehow, I don't think so. The question of Japan raises serious doubts.

But I think that the trend now is pointing back to the early 1930s and before -- less government intervention.

If this trend continues, then we can expect that history will somehow repeat itself (plunging us into depression).

[Jimmie Higgins]

I think the west is headed for another serious depression though it may not look like the ones in the past. As China starts kicking into the world economy, there will be serious capitalist overproduction because that is a hige source of labor and wealth for capitalists that has not really been connected into the rest of the world economy.

As for my limited knowlege of economics: I do think that most modern marxists I have read do say that there was a lot that Marx did not get absolutly correct. The most glareing miscaluclation is that capitalism has prooven to be much more flexible than Marx though because of things such as credit and imperialism which did not fully develop in Marx's time. Also fascism did not exist in Marx's time and history has shown that since that time, countries with economies on the verge of total meldown have turned to fascist or other forms of state organization to combat the chaos of the market economy. Also I am sure that capitalism has a few more tricks up its sleave that have yet to be revealed to us.

But I don't think Marx's point was that people should wait around for the capitalist economy to melt-down, he was trying to show the problems of the system and warn militan workers and activists and socialists of what a future under capitalism will lead to. He wasn't exactly correct, but history has shown that capitalism has the capacity for much worse things than Marx foresaw... imperialism, genocide, fascism, wars and more booms and busts.

[RevolucioN NoW]

I dont claim to have much knowledge of Economics but ill give it a shot.

Indeed, according to Marx there should have been a large scale economic meltdown in the industrialised world, however he obviously provided no real timing on when this would occur, as he had no way of knowing.

Capitalism has endured due to several factors, including government intervention and the ability for it to provide the workers with an increased standard of living (until recently at least). The use of thirld world countries as cheap labour may also have helped to keep the system from suffocating.

As far as i can see, capitalism would be drastically weakened by many takeovers by nationalist or socialist administrations in Latin America and other third world nations, this would stop the supply of cheap goods and possibly force the capitalists to lower wage levels in the first world. The coming world crisis in oil production will have a terrible impact on capitalism, as oil supplies will begin to dry up by 2015.

According to several articles i have read the unrestrained nature of Chinese proto-capitalism has led to a crisis of overproduction, 10's of thousands of cars and cheap copies of electrical goods are sitting idle, ready to be released on the first world.

Revolution is still inevitable in my opinion.

[antieverything]

Excellent, excellent post Redstar! You never cease to amaze me by being so dense yet so open-minded at the same time ;)

Anyway, I agree with the premise of the labor theory of value being flawed. I've been saying this for years! I also feel, however, that the basic premises of Marxism (including the most important part--the analysis of class power relations) escape this relatively unscathed.

The fact that capitalism will not inevitably "melt-down" in the way Marx had forseen is also something I have been saying for some time. I maintain that the only way forward for humanity is socialist revolution of some sort yet the chances of this happening (as opposed to the world falling into a prolonged dark-age of neo-feudalist fascism with the current ruling class--or possibly a new ruling clique--maintaining and extending its control) are not promising.

One thing, though, is certain: capitalism may not melt down for the traditional Marxist reasons but it can no longer exist as it is today. The welfare state is a relic of the 20th century. The economic outlook for the masses, for reasons I don't think I have to go into here, are dismal. The era in which capitalism is in any way a progressive force has been over for some time. Capital is now in complete control, it no longer has to allow labor a political outlet. It no longer has to worry about the well-being of individual nations. The logic of capitalism, unrestrained completely for the first time, will destroy itself. As I have said before, the successor system will not inevitably be socialist.

The question is twofold: will capitalism destroy itself before it destroys all of us? Can we bring the system down before the vast, vast majority of the world's population has been irreversibly scarred by the system?

I have no choice but to believe that the answer to both questions is in the affermative. All we can do now is spread awareness that there is in fact an alternative. National reform movements have been rendered impotent by globalized capital. International reform movements are hardly conceivable.

Make no mistake, capitalism will be harder to bring down now than ever before...but at the same time the desirability of it being brought down will become apparent to ever more people as the uniform system of exploitation drives to every corner of the globe.

...and oh, yeah...I'm back for some reason--I don't know exactly why!

[antieverything]

On the issue of governments using Keynesian measures to combat instability, the rise of globalized capital has made this increasingly difficult as the government's infusions into the economy--the artificial increase in aggregate demand--goes more and more to buy products produced overseas.

[redstar2000]

Excellent, excellent post Redstar! You never cease to amaze me by being so dense yet so open-minded at the same time.

Uhh, thanks...I think. :rolleyes:


I maintain that the only way forward for humanity is socialist revolution of some sort yet the chances of this happening (as opposed to the world falling into a prolonged dark-age of neo-feudalist fascism with the current ruling class--or possibly a new ruling clique--maintaining and extending its control) are not promising.

There's an extant letter from Marx to Engels in which he (Marx) says "in passing" that "humanity must choose between socialism and barbarism".

That's pretty ominous if support cannot be found--theoretical and/or empirical--for "the tendency of the rate of profit to fall over time".

The vision that comes to mind is of some of the modern "dystopias" created by a number of science-fiction writers.

They posit a planet ruled entirely by a few giant corporations (headquartered in artificial satellites), an ecologically devastated Earth, suburban upper-class enclaves guarded by military force from the mass of semi-civilized "proles", etc.

It would definitely be a "new dark age"...at least for 99% of the human species. Life would be "nasty, brutish, and short".

Probably world-wide epidemics would follow...leading to a massive "great dying".

And then...?

It may be, of course, that this is much fuss over nothing. The labor theory of value could be valid in a way that no one suspects at this time; the tendency of the rate of profit to fall over time could be "chugging along" even as we speak; and proletarian revolution could be getting closer with every passing day.

It's not necessary, after all, to have a knowledge of theoretical physics in order to use a bow and shoot an arrow and actually hit what you were aiming it.

But, speaking personally, I would like to know...that the arrow is not going to suddenly reverse its course, fly behind me, and plant itself in my ass, for example.

"Knowing" is better than just "believing".

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[Sabocat]

There certainly have been Stock Market fluctuations here in the U$, that have been worse or equal to the crash of the 30's, but the government has since introduced protections to prevent a full crash. Shutting down the exchange after a certain percentage drop of stock. There has also been a culture invented here to encourage the middle class to invest into the market, thus creating more capital flow into the corporation entities, thus insulating the market even more, as the middle class is less likely to "cut and run" when they're life savings are in the market.

The indicator that I see for failure of the system here in the U$ is the loss of the manufacturing base to a service base labor force (as one example). Soon, (I think certainly our lifetime) almost nothing will be made here. We will have become a society of consumers only. It will be much more succeptable to overproduction in third world. My thinking that if everyone here is working in the service sector (most likely for lower wages), who's going to be buying the products being overproduced overseas? This service sector has also been traditionally hard hit with unemployment. As wages continue to drop with this new labor base, I think this is what will drop the rate of profit.

I admit that I have only a rudimentary understanding of economics, but being in the workforce for the last 25 years or so, I have seen some obvious changes. In my area of New England I have watched as almost all of the heavy industry has gone. This was an industry where the blue collar was able to make a very good living. Since that industry has left, the union presence is almost non-existant, and the laborers salaries dropped by sometimes as much 25-50%. This naturally, has led to a much depressed state in all but the high tech areas (which have recently started going away as well). With this loss of salaries, companies and retailers have left some areas because it simply wasn't "viable" to keep their businesses there with no one spending money in them, presumably affecting their bottom line.

Corporations have recently seen an upswing in the stock market, but unemployment is still high. The market is rebounding because corporate costs have been cut with the reduction of workforce. How long can that continue? My feeling is that it's smoke and mirrors. I recently saw an article that stated that people that were unemployed when finally finding a job, are on average going back with a salary of only about 80% or so of what they were making in their previous job. Is that the beginning of the end? That's the question I guess.

[antieverything]

Your economic observations are both basic and as complex as they need to be--universal drops in wages lead to a universal drop in aggregate demand leading to recession...Keynesian policies no longer work so the only outcomes are 1) nothing is done and the system collapses--Marx is vindicated at least in part. Corporate rule ensues...the dystopian vision is realized. 2) Fascism. A war economy huge by even American standards fueled by constant, multi-theater war (the PNAC vision). 3) Socialist revolution.

Disgustipated points out the obvious fact that economists rarely take notice of...it would lose them their jobs after all.

[redstar2000]

Keynesian policies no longer work...

Maybe, maybe not...or maybe partially.

One of the guys I mentioned in my first post on this thread--Steve Keen--is a "neo-Keynesian"...in fact, he would probably say that he is a "real Keynesian".

His idea is that the "neo-classical consensus"--Milton Friedman, et.al.--while claiming to have "absorbed Keynes" have actually repudiated Keynes.

It is "neo-classical" economists that advise ruling class governments today: tactics like privatization, manipulation of the money supply and interest rates, dismantling of government social benefits, elimination of trade barriers and especially controls on the movement of capital, etc. are all opposed to what Keynes really advocated.

What we think of as "social democratic" policies are, in Keen's eyes, really "Keynesian economics"--capital controls, a generous welfare system, government protection of "key" industries, a "partnership of capital and labor", etc.

All of which leads me to wonder if what the long-range policy of the ruling class might not turn out to be is a cycle between "neo-classical" and "Keynesian" policies.

When things look grim--a depression or at least one on the horizon--call in Keynes. When the bubble is growing--call in Friedman.

Under Keynes, the capitalists get to keep most of their wealth by giving up a little of it; under Friedman, the capitalists get to keep all their wealth and add to it at the expense of the working class.

Keynesian economies are stagnant or grow very slowly; Friedmanian economies grow very rapidly...and then crash.

Western Europe is Keynesian...but drifting in the direction of Friedman. The U.K. is much more Friedmanian and the U.S. is outstandingly so.

Now, what "could" happen?

Friedmania could become so pervasive on a global scale as to prompt a global depression...and a proletarian revolution.

Or, intelligent capitalists could foresee this possibility in time to "switch" back to Keynesian policies and thus avoid disaster (for them, of course).

What I'm looking for, of course, is evidence of some economic factor(s) that compel the ruling class to make the "disastrous choice"...to go with Friedman "to the bitter end".

The "tendency of the rate of profit to fall over time" would be, if it could be shown to actually exist, such a "compulsion". The capitalists would have no choice.

But, as you can see, that is now a very big if.

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[antieverything]

I would argue that the shift from Keynesian policies has less to do with ideological conflict and more to do with the fact that globalization has made these policies (including the welfare state as you have pointed out before) unworkable or ineffective. "Socialist" parties in power don't necessarily want to dismantle the welfare state but have no choice in the matter. The economic necessity of competitiveness in a global market compels them to follow the logic of the global market rather than that of social justice (albeit a scewed or half-assed vision thereof).

[MiDnIgHtMaRaUdEr]

I think you are looking at things in far too big a perspective. Take Cuba, GNP 1/500 of the United States. Everyone goes to college, everyone gets free medical. There are no homeless, there are no starving. Even though Cuba's GNP is 1/500 of the US, Cuba has the better economy I say because it guarantees more to the working class. Who cares how much money the people on the fortune 500 have? Its the proletarian that matters.

[Scottish_Militant]

Redstar, a friend of mine read your post and he's written the following. He is a member of The Socialist Party of Great Britain (http://www.spgb.org.uk/)

Red Star's problem would appear to be that he is a collapsist:
"Take away the labor theory of value, lose the tendency of the rate of profit to fall over time, and you lose the "inevitability" of capitalist crises...including the final one."

It is true that the tendency of the falling rate of profit is derived from the Labour Theory of Value (see Capital Vol.3, Part III), but it is only a tendency, not a law.

Marx, in Capital Vol.3 Part III pointed to several counter-acting tendencies to the falling rate of profit, you should read this part.

There is no 'final crisis' as Red Star talks about. Capitalism will not collapse but must be done away with by the conscious action of the working class.

So capitalism can endure indefinetely, as long as the environment permits.

Red Star's post seems to be mainly about trying to show that capitalism is not 'infinite'. It would appear he is one of these 'economic determinists' who thinks that Socialism is inevitable.

The problem with Red Star is that he thinks the case for Socialism is based on this collapsist nonsense - trying to scare workers into becoming Socialists. The case for Socialism is based upon the theory that the working class are a subject class and in the law of social evolution, the next stage is for their class liberation.

When John Maynard Keynes came forward with his theory of getting rid of recessions, the Communist Party of Great Britain supported him. The Socialist Party of Great Britain refuted his views, and said even if they had not refuted them, and he was able to solve recessions, it was irrelevant AS IT WOULD NOT FUNDAMENTALLY ALTER THE RELATIONSHIP OF WAGE-LABOUR AND CAPITAL.

Those who think the working class are incapable of scientific thought need to make use of scaremongering tactics like Collapsist theories.

[redstar2000]

There is no 'final crisis' as Red Star talks about. Capitalism will not collapse but must be done away with by the conscious action of the working class.

Well, that just moves the problem to a different level.

Why should the working class become conscious of the need to destroy capitalism if capitalism is an on-going "success"?

In general, we humans need real material reasons to make our decisions...particularly the "big ones"--like revolution. As a rule, we don't just sit in our armchairs and, pondering the abstractions of history, decide that we should be the next ruling class.

It's true that Marx seemed to be "of two minds" about the working of capitalism itself. In Vol. I of Capital, capitalism collapses due to the strains of its internal contradictions--particularly the strain between the advancing means of production and the old bourgeois-proletarian relations of production. In Vol. III, capitalism seems to enjoy the possibility of indefinite existence...though "cramped" by the tendency of the rate of profit to fall over time.

But in neither scenario does Marx posit that "consciousness" is, in and of itself, a deus ex machina...something that just falls out of the sky and "gets the job done".

Consciousness is a derivative of material conditions...and those conditions must include the obvious failure of the existing system to "deliver the goods".

Otherwise, why bother? More specifically, why take a big chance on an unknown future when "after all", things are "not so bad" with what we have now?


It would appear he is one of these 'economic determinists' who thinks that Socialism is inevitable.

Well, that's half-right. Obviously, I'm an "economic determinist"...as was Marx.

I do not think that communism is "inevitable" in an absolute sense. What I have argued is that without the collapse of capitalism, the "opening" for the communist alternative...doesn't open.


The problem with Red Star is that he thinks the case for Socialism is based on this collapsist nonsense - trying to scare workers into becoming Socialists.

The problem with this criticism is that it's nonsense, period. The collapse of capitalism is not a rhetorical device to "frighten workers into choosing communism"...it is, or is supposed to be, a prediction based on the "laws" of capitalism itself.

If the "law" on which the prediction is based is shown to be invalid, then it can no longer be asserted that capitalism will collapse...and "we have a problem".


The case for Socialism is based upon the theory that the working class are a subject class and in the law of social evolution, the next stage is for their class liberation.

What "law" of "social evolution" is this? What does it actually say? What is the evidence for its validity? Upon what actual material conditions is it based?

To be honest, I've never heard of such a thing but, as always, I'm willing to be instructed.


Those who think the working class are incapable of scientific thought need to make use of scaremongering tactics like Collapsist theories.

I think the obstacles to scientific thought in the working class are of considerable magnitude; the ruling class devotes enormous resources to preventing the spread of scientific thought among workers.

That doesn't mean that workers "can't do it"...but it takes considerable effort and even a bit of luck for "an ordinary person" to "break through" the numerous illusions that the ruling class provides.

But material reality is very powerful; a capitalist crisis radicalizes people precisely because material reality has shattered many bourgeois illusions. There are probably more working class radicals in Argentina right now than anywhere else in the world...not because they all suddenly decided to "think scientifically", but because material reality revealed the sterility and utter uselessness of many forms of "unscientific thought".

And I have to repeat this, just so you're clear about it. I am not telling people "choose communism now or die in the next capitalist depression". That would be a silly thing to say to people.

What I want to be able to say to people--with evidence to back me up--is that capitalism by its very nature will inevitably reach a point at which it can no longer function. There is nothing the ruling class can do about it. It is "hard-wired" for ultimate collapse.

If that cannot be truthfully said, the alternatives look extremely grim.

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[Mike Fakelastname]

I don't know much about economics. But the idea that capitalism could exist forever is pretty absurd if you only remember Dialectic Materialism. It must give way to something better eventually.

[antieverything]

...not if we are all dead...

[rcpnz]

Dear RedStar,

Thanks for your reply. I am the individual who wrote the reply to your original post.

You ask me why the workers should get rid of capitalism if it is a "success". I never said it was a success, but only that it would not collapse.

Even if it were a success, the question is posed as to what class it is a success for. Certainly not the working class.

You say: "As a rule, we don't just sit in our armchairs and, pondering the abstractions of history, decide that we should be the next ruling class."

Do I advocate sitting in an armchair? No. Of course we need real material reasons for establishing Socialism. What do you suppose class emancipation is if not a material reason? What do you suppose getting rid of the social problems of poverty, environmental destruction, war etc is if not a material reason?

Marx's view in Vol.1 was put forward as a preliminary argument. It was not a detailed analysis of the "collapse of capitalism", as was presented in Vol.3.

Consciousness is derived from material conditions. Am I denying that? To deny that would be to reject the theoretical system of karl marx. But what you are saying is that we should support Socialism because "capitalism will collapse" when you say "Otherwise, why bother? More specifically, why take a big chance on an unknown future when "after all", things are "not so bad" with what we have now?"

Just because the system is not collapsing, does not presuppose that things are "not so bad". This is capitalism. Things are always "bad" for the working class. They are a subject class. To argue that capitalism is collapsing to convince people to become Socialists is scaremongering. Workers cannot be scared into becoming Socialists, they must be, as Marx said "of a sober disposition".

You say Communism cannot be achieved without the collapse of capitalism. Why do you think this? Lenin's argument in Left-Wing Communism that Socialism can only come out of an economic crisis is erroneous as it bases its theory on scaring workers into becoming Socialists. The Socialist case does not rest on the view capitalism will collapse.

" Does the Socialist Case Depend on Depressions Getting Worse?

The case for Socialism does not rest on the worsening crisis theory at all, and it simply is not true that Socialist propaganda is impossible during booms any more than it is during depressions. The case for Socialism exists at any point in the trade cycle based on the recognition that the cause of the problem facing the working class is that the capitalist class own and control the means of production for the sole purpose of making profit and not for meeting human need. The SPGB membership did not grow in leaps and bounds during the depression of the 1930's not in the last three decades of the 20th century. In fact, depressions are usually associated with the growth of racist and fascist politics.

The belief in ever worsening slumps, a doctrine as we have seen which is held by political organisations like the SWP, is inevitably tied up with the "collapse of capitalism" theory. It was never logical for the Socialist Party of Great Britain with our insistence that Socialist knowledge and organisation are the only road to Socialism, ever to have depended on depressions getting worse and worse until one became so great that Socialism would be forced into being. Socialists reject both fatalism and economic determinism.

Nevertheless it is clear that in the early years the SPGB had taken over some of this theory from earlier writers as for example the Kautsky material, which the SPGB published as a Party pamphlet under the title THE CAPITALIST CLASS. Another influence was Louis B Boudin, author of THE THEORETICAL SYSTEM OF KARL MARX AND SOCIALISM AND WAR who held a collapse theory similar to the one advocated by Rosa Luxemburg cited above.

To hold on to an untenable theory is doctrinaire and dogmatic. The SPGB is a party of Scientific Socialism. If a theory is invalid then it has to be dropped. In 1932 the "collapse" theory was explicitly repudiated in the Socialist Party of Great Britain pamphlet WHY CAPITALISM WILL NOT COLLAPSE which was issued after being fully discussed and endorsed by the Executive Committee. This is the only tenable case. And it is republished now to set out the continuity of thinking between the old SPGB and the reconstituted SPGB. That is, until a Socialist working class majority takes positive action to establish Socialism there are no crises from which capitalism cannot recover. "
(SPGB, Capitalism's Future, SPGB 2001).

You say that the view that capitalism will collapse is a prediction. What if that prediction was proven to be erroneous? Would you still retain it? There is no problem just because capitalism will not inevitably collapse. Workers are convinced of the socialist case on the basis that it is their material interest to establish Socialism – they will be emancipated as a class and their consumption won’t be restricted by what they can afford.

What I meant by the ‘law of social evolution’ is that capitalism has not existed for all time but is part of a process. We have achieved a state that there are only two economic classes – and the next stage is the elimination of these classes as classes – the resolution of the class struggle through class emancipation.

You say workers are ‘radicalised’ by depressions. But the question is whether they become Socialists. Perhaps more people become Socialists during recessions, but this is not our case for getting rid of capitalism. It isn’t about ‘making lives better’, but is about class emancipation as part of the process of social evolution – the negation of the negation etc.

“What I want to be able to say to people--with evidence to back me up--is that capitalism by its very nature will inevitably reach a point at which it can no longer function. There is nothing the ruling class can do about it. It is "hard-wired" for ultimate collapse.

If that cannot be truthfully said, the alternatives look extremely grim.”

Well you can’t truthfully say it, and the alternatives do not look grim. Socialism will come when a majority of the working class are class-conscious and not before. The task is for Socialists to convince workers of the Socialist objective and the necessity of taking political action to achieve it. I would like to point out that the Socialist Party of Canada (which used to be a companion party of ours) used to obtain large numbers of votes and had seats in several State legislatures. In Australia in 1932, the SP of Australia (our companion party at the time) stood in a constituency against the Leader of the Labour Party, who became the Prime Minister, and he obtained 32,000 votes against 12,000 votes.

The Canadian and Australian comrades did not stand saying, “capitalism is about to collapse” – the exact opposite. In 1932, the revolutionary SPGB issued a pamphlet entitled “Why Capitalism Will Not Collapse”, which you should read, see http://www.spgb.org.uk/futuresbook.htm

They stood saying that the only tenable way forward was the abolition of the wages system. No reform demands, no palliatives. The reason we have much less support now is that we have all these trendy “left-wingers” walking around offering palliatives – claiming to be “doing something now”. What they forget is that Socialism can happen now – what we need to do is to convince the mass of workers of the necessity of it.

Best Wishes,
Richard
[email protected]

[commie kg]

I have been milling this over in my head ever since it was posted, and not being an expert in economics, I can't really think of a solution to this problem.

I feel way out of my league here, but I want to try to provide an answer to some of rcpnz's points.


You ask me why the workers should get rid of capitalism if it is a "success". I never said it was a success, but only that it would not collapse.

The way I see it, as soon as capitalism starts fouling up, and giving the workers a good reason to revolt, the ruling class can fall back on the kind of "social capitalism" we see in Europe today. This would provide minor, short-term progressive improvements in society. This could in turn prevent any major threat to the ruling class by denying the material conditions nessecary for a revolution as a mass movement.


What do you suppose class emancipation is if not a material reason? What do you suppose getting rid of the social problems of poverty, environmental destruction, war etc is if not a material reason?

For most people, more reason will be needed. These things will have to be directly affecting them. If the ruling class does impliment similar short-term progressive policies, many people might not see any reason to revolt.

I'm running low on time, I'll try to address some more of your post later.

[rcpnz]

Dear CommieKg,

Thanks for your reply.

You say:"I have been milling this over in my head ever since it was posted, and not being an expert in economics, I can't really think of a solution to this problem.

I feel way out of my league here, but I want to try to provide an answer to some of rcpnz's points."

You should know I am certainly no expert on Economics. I have read Vol.1 of Capital, skipped Vol.2 on the advice of a comrade (for the time being) and am stuck half-way through Vol.3.

If I can help you in any way, by explaining things, or suggesting things for you to read, please send me an e-mail at [email protected] or reply through this.

It is good to know you want to reply to my point. Thanks for taking the effort.

It is true that the capitalist class CAN introduce what you call "social capitalism" and try to 'appease' the workers, but if you convince a mass of workers on a SOUND, socialist basis - that is, they have shown they understood the basics of your theoretical system (as is required for membership of the Socialist Party of Great Britain), do you think the workers will stop and say 'hey, these bosses aren't so bad'? I don't think they will. History shows us that the capitalist class implementing this destroys their threat of left-wing capitalism. But proper Marxist organisations do not lose support at these points, because their support is built on a sound basis.

I think class emancipation is enough. It does directly affect them. I do think they will be slightly peeved to discover that and their boss are not in an equal partnership, but that their boss is actually their master, and has been exploiting them, and living off of their [the worker's] labour, being essentially socially parasitic.

As I have said, "progressive reforms" could not possibly fob off a sound socialist working class. For they know they are still slaves.

Please do address more of my post later. Thanks for your reply, and if this sounds pompous or anything do let me know.

Best Wishes,
Richard

SOCIALIST PARTY OF GREAT BRITAIN
www.spgb.org.uk

[commie kg]

Continued from my original post


But what you are saying is that we should support Socialism because "capitalism will collapse" when you say "Otherwise, why bother? More specifically, why take a big chance on an unknown future when "after all", things are "not so bad" with what we have now?"

Redstar can answer this better considering it was directed at his statement, but what I think when I read it is that a large number of "would-be communists" might decide that if things aren't too bad for them, why go through the somewhat difficult operation of overthrowing an entire social order? To us, as Marxists, such an attitude seems absurd, but the success of communism counts on many more people coming to understand that capitalism isn't the way to go.

[redstar2000]

You ask me why the workers should get rid of capitalism if it is a "success". I never said it was a success, but only that it would not collapse.

Even if it were a success, the question is posed as to what class it is a success for. Certainly not the working class.

I'm using a "common sense" definition of "success", of course. The system, with ups and downs, continues to effectively function.

There is an additional factor that must be considered, naturally: the immiseration of the proletariat. Neo-classical economic policies sharply increase the gap between "winners" and "losers" under capitalism. A few workers achieve an unusual prosperity--the majority find their living standards slowly but steadily depressed over time.

This appears to actually be happening...at least in the U.S. Over the last three decades, the "middle class" standard-of-living of the American working class has been maintained only by large numbers of female spouses becoming full-time workers and by huge amounts of consumer credit. American capitalism at the present time is quite literally a "house of (credit) cards".

This is a phenomenon that was completely unknown in Marx and Engels' time (Marx got his loans from his neighborhood pawn shop!).

Vastly expanded consumer credit plays the same "stabilizing" role in a neo-classical economy as government spending plays in a Keynesian economy. Thus far, it has successfully held off a "crash"...but no one knows if this can continue. There is already a problem in South Korea...with credit card companies facing disaster over billions of dollars in bad consumer debt.

With regard to class consciousness, I still maintain that it will be marginal as long as working people think that things are generally going well for them. I've heard working people complain of the "constant strain" of trying to "stay even", "meet the monthly payments", "needing the overtime but always being exhausted", etc.

But the payments still get made, the new(er) car gets purchased, the loan to buy a house gets approved. This is capitalism "delivering the goods"...and proletarian revolution is not going to happen as long as the goods keep being delivered.


What do you suppose getting rid of the social problems of poverty, environmental destruction, war etc. is, if not a material reason?

Of course they are material reasons...which is why capitalism produces communists no matter how "prosperous" it might be at any given moment. The problem is numbers.

In the U.S., I would imagine that there are no more than a few hundred thousand people who would be "comfortable" with proletarian revolution (the numbers that would actually fight for proletarian revolution are far smaller, of course).

Perhaps five or six million would support a "social democratic"--really Keynesian--alternative...people who would vote for Franklin D. Roosevelt if he were alive today.

The adult population of the U.S. is probably around 250 million. (!)

The material conditions that you mention do produce revolutionary class consciousness...but in amounts too small to matter. Even reformism is marginalized...except in its most pallid and servile manifestations.

Of course, things change. But consider: poverty primarily affects those who are poor. Environmental destruction primarily affects those who actually live in or near the destroyed areas. War primarily affects those who are in the military and their families. For the most part, these are presently not large numbers...though they could certainly become a lot larger.

For most people, capitalism is still "working".

To be sure, there is some portion of the population that actually does make an "arm-chair" decision in favor of revolution. Whether they are college students or self-educated working class intellectuals, they have learned to "think scientifically" about class for reasons other than "immediate necessity".

But again, I assert that those numbers grow significantly only when capitalism itself is manifestly in difficulties.

Based on historical experience, I don't think it is reasonable to expect a significant majority of the working class in any country to develop revolutionary consciousness until material reality "opens the door" for the revolutionary alternative to be considered.


To argue that capitalism is collapsing to convince people to become Socialists is scaremongering.

I tried to respond to this twice! Once more, that is not the "appeal" that I propose to make. Communism has its "own appeal" that is independent of capitalism. Emancipation is a "good" that is independent of the "conditions" of slavery.

What a severe capitalist crisis accomplishes is getting very large numbers of working people to take the communist alternative seriously.

I'm sure you've heard people say that "communism is a good idea". All of us have heard that at one time or another. But there are always lots of "good ideas" floating around. To start to seriously consider a radical alternative to habitual behavior, most humans need to see that the "old ways" are "not paying off any longer".

If we are in a position to tell people--based on a correct theory--that not only are the old ways (capitalism) not "paying off" anymore...but they will "never pay off again", then we have a real opening to raise revolutionary alternatives.


...it simply is not true that Socialist propaganda is impossible during booms any more than it is during depressions.

But the question is who is listening? You can make all the intellectual arguments for communism that you want...but if capitalism is functioning well, very few will even be willing to listen to you and even fewer will want to make the effort to become involved in political action. Communism looks both "hopeless" and "unnecessary".

Reformists--social democratic/Keynesian--have a little easier time of things. Making capitalism "work even better" is always a "respectable" appeal.

But for us? We need "spectacular failures" of capitalism just to get people to listen to what we have to say.

And even then, the reformists give us a "tough battle"...don't forget that proletarian revolution is a "last alternative". It's what working people do only when they see that there is no other rational alternative.


In fact, depressions are usually associated with the growth of racist and fascist politics.

No argument. Extreme situations call for extreme measures. The ruling class looks to fascism; the working class looks to communism (we hope!). As I indicated earlier, the victory of proletarian revolution is not inevitable even in a serious capitalist crisis.

It just gives us the chance.


You say that the view that capitalism will collapse is a prediction. What if that prediction was proven to be erroneous? Would you still retain it?

Of course not. Why do you think I started this thread? I think we need to do some serious thinking if a "final" capitalist crisis is not inevitable.


What I meant by the ‘law of social evolution’ is that capitalism has not existed for all time but is part of a process. We have achieved a state that there are only two economic classes - and the next stage is the elimination of these classes as classes - the resolution of the class struggle through class emancipation.

Well, if I understand you, you posit a "law" of the "reduction of the number of economic classes over time".

Even if that "law" could be shown to be valid, it doesn't give us much insight into what is actually happening.

Why does the number of classes decrease over time? And having reached two, why should it fall to one?

What's going on "underneath" this "law"?


Perhaps more people become Socialists during recessions, but this is not our case for getting rid of capitalism.

I agree; it's our opportunity to "make our case" when people are ready to listen.

And your "perhaps" is disingenuous...you know as well as I do that radical political trends increase significantly during periods of capitalist crisis.

Indeed, the parliamentary successes that you boast of in Canada and Australia took place in the 1930s. Even though you argued that "capitalism will not collapse"--and, that time at least, you were right--the fact that large numbers of people were willing to vote for a socialist alternative demonstrates the point I have made.


The reason we have much less support now is that we have all these trendy "left-wingers" walking around offering palliatives - claiming to be "doing something now".

Trendy? You sound a little bitter here.

Instead, you should ask yourself why they have the appeal they do (such as it is).

I agree with you that material conditions do not justify proletarian revolution at this time. Thus, the "trendy" ones...they attempt to offer options that "make sense" to people at the present time.

The "options" don't make all that much sense to me...nor to you. They don't really change anything.

These seem to me to be the real questions...

Under what material conditions does proletarian revolution make sense to the working class itself?

Have we any scientific reason(s) to expect those material conditions to actually materialize?

If you think that proletarian revolution will happen "when it happens", then perhaps my questions will seem to you either unanswerable or irrelevant or both.

They seem crucial to me.

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[Morpheus]

Feudalism did not suffer a 1930's style collapse yet it was abolished, so why could the same not also happen with capitalism? There have been many revolutions & times of unrest that did not happen as a result of a depression. Capitalism wasn't in a major depression in the late 60s. Some of the largest peasant revolts in the late middle ages came about in the wake of things getting better. The last time capitalism collapsed it resulted not in proletarian revolution but in fascism and world war. If that happened again with today's technology it would probably destroy civilization.

There are two upcoming crises which could potentially destablize the system, but this is not guarenteed nor will such destabilization necessarily lead to anarchy. One is the emergence of a global ruling class and it's conflict with (and eventual overthrow of) the American Empire. Hypothetically this could lead to a temporary global crisis, similar to France 1789 or Russia 1917 on an international level, which may create an opening for a global revolution. The other is enviromental crisis. Capitalism, especially stable capitalism, is a system that continually uses more and more rescources. It is based on growth for the sake of growth. Thus it will progressively destroy the enviroment because the Earth is finite. Eventually things will grow to a breaking point, bringing about ecological crisis. It may be possible for capitalism to avoid this, perhaps by colonizing space. And ecological crises could just easily lead to eco-fascism, luddite dictatorship and a return to feudalism. The future is not yet determined.

Workers should destroy capitalism because it produces massive poverty and oppresses us. I want to be free, not to follow the orders of bosses. Capitalism doesn't need to implode to produce massive misery. Billions live in poverty, thousands starve to death every day. Things may look decent for most in the "first world" but on a global scale there is massive misery produced by ordinary stable capitalism. This is why I think the revolution(s) will probably begin first in the "third world" - it is more oppressed. We can't just sit around and hope that capitalism will automatically destroy itself. We have to organize to bring about it's destruction. Consciousness is often derivative of material conditions, but not always. Consciousness can sometimes change material conditions, and vice versa.

[redstar2000]

Feudalism did not suffer a 1930's style collapse yet it was abolished, so why could the same not also happen with capitalism?

Well, actually feudalism suffered a whole series of crises, wars, rebellions, etc. spread over several centuries.

Probably the initial crisis of feudalism was environmental...the black plague epidemic(s). So many serfs died that lords began "poaching" each other's remaining serfs by offering reduced feudal obligations. When the population of serfs recovered in the early 16th century, the lords attempted to re-impose the old obligations, provoking wide-spread peasant rebellions. The rebels were crushed...but it proved impossible to make the old obligations "stick".

The "wars of religion" in the late 16th and the 17th century also damaged the "institutional infra-structure" of feudalism...particularly in the Netherlands, Germany, and Switzerland.

The rise of centralized monarchies--which was almost certainly intended to strengthen the nobility in its privileges...turned out in the end to weaken those privileges.

Meanwhile, bourgeois ideologues were attacking feudal ideology as "unreasonable".

The "crisis" of 1789 in France was a crisis in the finances of the centralized monarchy.

When the autocrats of land and church proved unable to resolve this crisis, the "new men" (capitalists) and the "rabble" took matters into their own hands.

Although this great revolution was a failure in the end, it shattered the notion of the "inevitability" of the existing feudal order everywhere in Europe. In France, the capitalists did not actually become, in a formal sense, the ruling class until after the last catastrophic defeat of the old order in 1870.

If you like, the "transition period" between feudalism and capitalism in France was 1789-1870. In Germany, it was 1848-1945. In the U.S., it was 1776-1865...a rare case of "stage-skipping" by the way--from slavery to capitalism. Interestingly enough, both in France (Napoleon III) and Germany (Adolph Hitler), the bourgeoisie first tried to rule "through" a populist despot before taking power in their own name.

All of which is to say that history is "messy"...there were many major crises in the course of feudalism and any number of them "could" have proved to be "final".

Can the same be said of capitalism? I do not know. What I do "know"--or at least something I'm pretty certain of--is that a capitalism that manages to avoid serious crises is one that should be able to survive indefinitely.


The last time capitalism collapsed it resulted not in proletarian revolution but in fascism and world war. If that happened again with today's technology, it would probably destroy civilization.

I cannot deny that possibility...and there are many possible scenarios for major imperialist wars between countries that have nuclear weapons and the means to deliver them.

"Probable" is stronger than I would want to say...but "possible" is undeniable.


One [possible crisis] is the emergence of a global ruling class and its conflict with (and eventual overthrow of) the American Empire. Hypothetically this could lead to a temporary global crisis, similar to France 1789 or Russia 1917 on an international level, which may create an opening for a global revolution.

Yes, that is a plausible hypothesis. And it requires no "labor theory of value" to make it work.


The other is environmental crisis. Capitalism, especially stable capitalism, is a system that continually uses more and more resources. It is based on growth for the sake of growth. Thus it will progressively destroy the environment because the Earth is finite. Eventually things will grow to a breaking point, bringing about ecological crisis.

This, I think, is much less likely. Capitalists are "good" at "resource substitution". When the oil "runs out", they will have another (expensive) substitute "ready to go".

Of course, it is always possible that the ruling class will blunder grossly and, as a consequence, actually threaten the existence of human life on this planet. But they hire a lot of scientists to warn them of unintended consequences, so...I rate it as a low probability event.

This does raise an interesting "side issue". If neo-classical economic policies continue to be implemented, the standard-of-living of much of the "middle class" working class is going to decline quite a bit. I would not put it past "our" ruling class to "excuse" that development as a "response" to "environmental concerns". I can see their propagandists telling us that we "have to make sacrifices" in order to "save the environment".


This is why I think the revolution(s) will probably begin first in the "third world" - it is more oppressed.

Yes, but up to now, these have all been peasant-based bourgeois revolutions...wrapped in Leninist red flags though they were. The result always turns out to be the removal of the old servile colonial ruling classes and the triumph of a vigorous new native capitalist class.

Perhaps that could change as many of these countries have an embryonic working class...the consequence of moving manufacturing industries out of the "first world". But it seems to me that the "best" you could hope for is another "Petrograd"...a small and very radicalized working class in an ocean of backward peasantry.


We can't just sit around and hope that capitalism will automatically destroy itself. We have to organize to bring about its destruction.

No one has ever suggested that we should just "sit around". This is about something different: does capitalism contain within itself a mechanism of "self-destruction"?


Capitalism wasn't in a major depression in the late 60s.

I saved this one for last...the great French General Strike of May 1968 came "from nowhere". The working class, inspired by student radicals, just "decided to do it".

Could that happen again...and result in a victorious proletarian revolution?

Beats me!

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[turnoviseous_11]

Here are recent articles from In Defense Of Marxism on the issue of the tendency of the rate of profit to fall. The first link contains some introductionary notes, while the last one examines actual facts.

http://www.marxist.com/Theory/mb_newintro_glyn.html


http://www.marxist.com/Theory/rate_profit_glyn.html

[redstar2000]

Originally posted by [email protected] 5 2004, 05:14 PM
Here are recent articles from In Defense Of Marxism on the issue of the tendency of the rate of profit to fall. The first link contains some introductory notes, while the last one examines actual facts.

http://www.marxist.com/Theory/mb_newintro_glyn.html


http://www.marxist.com/Theory/rate_profit_glyn.html
I thought this was the most interesting comment from the first of the two links above...


Moseley argues, and we agree, that the present epoch of capitalism is characterised by a huge increase in unproductive expenditure. He finds this a dead weight on the system, acting as an involuntary levy upon the profits of individual capitalists. And he shows unproductive spending exploding out of control over the past fifty years. He assesses this effect as significant as the rise in the organic composition of capitalism in causing the secular decline of profits since the War.

The explosion in the "finance" industry, for example, is clear and obvious to all.

Even more dramatic, if I am not mistaken, there are now more people employed in "private security" than the total number of police and those serving in non-officer positions in the armed forces.

This "tax" on profitability required to "keep the system going" may well be "spiraling out of control".

In which case the effective rate of profit is falling regardless of any nominal increase that may be recorded (accurately or inaccurately).

That would be clearly a "mechanism of self-destruction" in the capitalist system that would be completely independent of the "validity" of the labor theory of value.

Is there anything the capitalist class could "do" about this? Clearly, the explosion in the finance "industry" is so inextricably tied up with modern capitalism itself that they can no longer do without it. They simply can't do a modern business deal without an enormously complex package of financial details...and the hordes of people required to write them up and check the fine print.

Nor does it seem terribly likely that they can do without their bloated "private security apparatus". No matter where they construct their means of production, they must be guarded against growing armies of enemies...including, by the way, each other. Industrial espionage and counter-espionage is of crucial significance.

Whether it is potentially angry workers in the west or neo-Luddite religious terrorists in the east, their wealth is built on the slopes of restless volcanoes. They must part with more and more of it in order to protect the rest.

A very interesting hypothesis, indeed.

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[Versive]

Originally posted by [email protected] 26 2003, 03:15 PM
So what? So this. It's Marx's labor theory of value (taken from Ricardo) that underpins his "tendency of the rate of profit to fall over time". It is that tendency, according to Marx, which generates crises of over-production in the normal course of capitalism and, according to the vivid account in the first volume of Capital, the final crisis in which capitalism "melts down".

Take away the labor theory of value, lose the tendency of the rate of profit to fall over time, and you lose the "inevitability" of capitalist crises...including the final one.

Capitalism could endure and even flourish indefinitely.
Marx, as far as I can tell from my first 250-odd pages each of Capital and the Grundrisse, wasn't taking into account resource depletion. In this respect, he was the product of his times and his, well, material conditions; he wasn't living in a world where, for instance, everybody in Bahrain had a day marked on their calendars when their oil fields were going to run dry. (No joke. What day it's going to be is apparently a serious topic of discussion.)

Anone here wanna speculate on what happens when oil starts going dry in the Middle East? You want a capitalist crisis, you've got one right there.

(Autocritique: From lack of experience, I can't say if any environmental Marxists - Gorz, Bahro et al. - have actually taken the stance I've proposed and argued that capitalist crisis lies in resource economics as much as macroeconomics. Anybody able to help me out here?)

[redstar2000]

If something "runs out", it may not be oil.

Here's why. There's a well-known "maverick" scientist by the name of Thomas Gold. He has a theory that oil, coal, and natural gas do not have a biological origin but rather originate well below the earth's crust as a consequence of natural processes.

While respectable petroleum geologists (with a nervous side-glance at their employers) firmly reject this idea...there is actually quite a bit of objective evidence in support of it.

Gold, by the way, has a good "track record" for a "maverick"...he's been right on a number of other scientific controversies.

If he's right on this one, then there is probably enough oil and natural gas for many centuries.

(I read about Thomas Gold in Nine Crazy Ideas in Science by Robert Ehrlich, pages 122-145.)

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[Vinny Rafarino]

I've kicked this around for years RS. You've read a portion of the material I have posted regarding the falling rate of profit.


You are correct when yoiu say there is no actual empirical eveidence to support the falling rate of profit theory. I've done the math several times, and it always comes up the same...An inevitable falling rate of profit...


Here's the problem however.


In order to maintain a falling rate of profit, it has always been ppredicted by socialist economists that the rate of constant capital will inevitable increase every business cycle. If this is the case, then the theory is correct. Unfortunately this assumption is entirely that...an assumption.

This could have been absolutely true when Ricardo and Smith made their initial calculations, however I do not feel that this is entirely accurate by today's standards. In reality I do not see a reason why constant capital would continually increase like clockwork every cycle....on the contrary, I have seen that it actually continues to plummet for a period of several cycles until the time where domestic surplus of any production good is exhausted. The only exception would be constant capital that includes very rare or hard to produce materials.

With that in mind, the original equations stand firm...however this is not always the case.

At that time there is a dramatic increase in constant capital as new materials must be purchased for production at the new market rate. (domestically, inflation is regulated to 3.5% or so...so it is impossible for production facilities to pay less into constant capital after several cycles)

I believe the answer lies in variable capital.

I'm sure we can both agree that once surplus value falls to the level equal to C and V, the first cuts made are to the wages of empoyees or to the number of staff. These cuts are only effective until the time that the supply of surplus goods are exhausted.

The way it looks on paper (I remember you commenting on these numbers in that other forum RS) is exiting actually...you can see modern capitalism ( over the last 100 years) clearly defined in an way that is much more than uncanny.

I hope to get this material published, and if I do...perhaps it will become a step towards providing empirical evidence to support the collapse of capitalism theory without completely relying on the falling rate of profit theory.

Or I could just be deluded. I reckon we will wee.

[redstar2000]

Frankly, I wish you luck in your endeavor!

One book I read suggested that nailing this down (the tendency of the rate of profit to fall over time) was "the holy grail" of Marxist economics (yes, that was the expression used).

As far as I can tell--with my very limited understanding of these matters--that when you start plugging actual numbers into these equations, they generate inconsistent and contradictory results.

It makes me wish I were a gifted mathematician...perhaps I could then reformulate the equations in such a way as to eliminate the contradictions and inconsistencies.

That wouldn't "prove" it was true...but it would prove that it could be true.

(The general history of science suggests that the answer might possibly lie in an area of mathematics that no one has ever thought to apply to economics. That's happened before.)

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A site about communist ideas

[antieverything]

I've seen work by both Marxist and non-Marxist economists "proving" both sides of the issue. Still, the more obvious examples of globalized capital make it seem rather insignificant in a modern view--to me.

As I keep saying, I have some sort of morbid-ass hope that the system is unsustainable...welfare measure don't work anymore. I choose to take as much positive as I can out of that scary but exciting fact.