Monopoly capitalism and the shrinking middle class

[Die Neue Zeit]

Perhaps one of these days I'll actually tune in to Lou Dobbs once more, especially after a globalization discussion awhile back.

I have read about the phenomenon of the "shrinking middle class," but originally I dismissed it as temporary rubbish, only to find out that the shrinking happened far sooner than expected, and also correlates with this:

"Hourglass" corporate environment

1) Lots of small businesses below, filling in various niches, with the potential for cooperation between various small businesses where at least one party dominates a niche market...

2) "Shrinking middle": there has been an increasing trend to intentionally downsize to a small business even when profitable, because elements of the "shrinking middle" either get bought out by the biggies - or shrink to niche markets, possibly because of falling rates of profit.

3) The multinational monopolies (not used in the discussion, because of a general lack of knowledge about history repeating itself on the part of the class as a whole, which I happily kept to myself) and globalization ("outsourcing") of value chains:


Free competition is the fundamental characteristic of capitalism, and of commodity production generally; monopoly is the exact opposite of free competition, but we have seen the latter being transformed into monopoly before our eye, creating large-scale industry and forcing out small industry, replacing large-scale by still larger-scale industry, and carrying concentration of production and capital to the point where out of it has grown and is growing monopoly: cartels, syndicates and trusts, and merging with them, the capital of a dozen or so banks, which manipulate thousands of millions. At the same time the monopolies, which have grown out of free competition, do not eliminate the latter, but exist over it and alongside of it, and thereby give rise to a number of very acute, intense antagonisms, frictions and conflicts.



Which makes me wonder - after reading this article (http://theoryandscience.icaap.org/content/vol8.1/sakellaropoulos.html): why is the term "imperialism" still used? Isn't it "vulgar" now, especially given the popular and vulgar-Marxist equation of it with colonialism, neo-colonialism, spheres-of-influence, etc.?

[bloody_capitalist_sham]

I would also like this answered.

I think that under capitalism the middle class does shrink as it is less and less able to compete with the big capitalists.

it must be something to do with the natural concentration of capital.

Also, another note, is that many of the top leadership will be members of both, for example, PepsiCo and Coca Cola.

So, while each corporation wont be monopolistic, there will be board members and large shareholders in both at the same time.

Good post! :)

[ComradeRed]

Originally posted by Hammer
I have read about the phenomenon of the "shrinking middle class," but originally I dismissed it as temporary rubbish, only to find out that the shrinking happened far sooner than expected, and also correlates with this: What do you mean by "middle class": the petit bourgeoisie or the bourgeoisie? :huh:

I assume it to be the former. If so, then this was all ready predicted by Marx: General Law of the Accumulation of Capital (http://marxists.org/archive/marx/works/1867-c1/ch25.htm).

If you mean the latter -- that the bourgeoisie are somehow "disappearing" into the night -- I find that quite hard to believe and an under-analyzed assessment.

You assert later that the "government controlled firms" with "50+1%" (you mean 51%?!) "state controlled" firms are forming international monopolies and oligopolies.

This I seriously doubt; although politicians may privately own majority shares of firms, I seriously doubt that governments control 51% of major international firms.

I would also like to see your sources and more specifically statistical data indicating such.


I think that under capitalism the middle class does shrink as it is less and less able to compete with the big capitalists.

it must be something to do with the natural concentration of capital. Spot on! It has to do with something involved with the concentration of capital: the general law of accumulation (see the link above).

[Die Neue Zeit]

^^^ The "middle class" as defined by CNN and the Democrats: my guess would be most petit bourgeois and a relatively tiny number of bourgeois (if you're not referring to the millionaires and billionaires).

All that stuff about "middle-class working families" et al :huh:

Oh - and there's more: The United States' agricultural economy has been characterized as an hourglass. At the bottom there are some 2 million farmers producing food for the 285 million consumers at the top. But in transit from farm to table the food passes through a mere handful of multinational corporations. Herein lie both the power and the problem of concentration. When the number of buyers is small relative to that of sellers, the former have much greater control over prices. This situation, called oligopsony, was the plaintiffs' beef in Pickett v. IBP. When those few buyers turn around to become sellers to a large group of customers -- as in the relationship between the food industry and consumers -- it is equally problematic. Increased size, and thus market share, is conventionally assumed to trigger corresponding increases in efficiency, and thus lowered costs to consumers. But empirical data do not always fit this theoretical pattern. In a recent economic analysis of 32 separate food-processing industries, increasing concentration led to increased market power in 28, lower processing costs in 14, and higher consumer prices in 28. In other words, the main effect of market concentration appears to be increased prices for the consumer (http://www.rtis.com/touchstone/oct2004/21.html) (Warning: "liberal Democrat" link)

[Die Neue Zeit]

I think that a proper reply to your last comment in the "state capitalism" thread belongs here, just because I think things have gone too far out of hand. :(



...the material conditions are here already... What are the material conditions then?

And if they are present, then why is it that wage slavery is still ubiquitous? Your "mighty" vanguard should have been able to lead the "sheep" to their emancipation by now if it were so.

I'll refer back to your remarks in another thread:


Well, point one was covered in sections 7 and 8 of Das Kapital, vol. I. (I won't waste space quoting the sections unless you would like me to, just ask and I'll happily provide quotes smile.gif)

Not quite. Marx was still relying on the old concept of monopoly, even in the Poverty of Philosophy quote I gave you.

I take it you're referring primarily to Chapter 31? Here, Marx was talking about the formation of mere industrial capital - primitive accumulation:


The money capital formed by means of usury and commerce was prevented from turning into industrial capital, in the country by the feudal constitution, in the towns by the guild organisation. These fetters vanished with the dissolution of feudal society, with the expropriation and partial eviction of the country population. The new manufactures were established at Weapons, or at inland points beyond the control of the old municipalities and their guilds. Hence in England an embittered struggle of the corporate towns against these new industrial nurseries.

...

Colonial system, public debts, heavy taxes, protection, commercial wars, &c., these children of the true manufacturing period, increase gigantically during the infancy of Modem Industry. The birth of the latter is heralded by a great slaughter of the innocents. Like the royal navy, the factories were recruited by means of the press-gang.

The latter part of my signature is the most significant part of Lenin's contribution to the accumulation theory (the co-existence of monopolies with "niche" businesses). Like the word "imperialism," Lenin gave completely new meaning to "monopoly" (not having to control 100% market in order to have a monopoly, but control like Microsoft's and Intel's).

From Ch. 2:


In other words, the old capitalism, the capitalism of free competition with its indispensable regulator, the Stock Exchange, is passing away. A new capitalism has come to take its place, bearing obvious features of something transient, a mixture of free competition and monopoly. The question naturally arises: into what is this new capitalism “developing”? But the bourgeois scholars are afraid to raise this question.

I will admit, however, that his and Hilferding's claim of "combination" in Chapter 1 is true in some cases (General Electric, upstream-downstream Big Oil) and not in others (globalizing the value chain like JC Penney, whose clothes are now made by another company).

Please provide quotes if otherwise. :)

I'll conclude this part of my rebuttal with this quote (Ch. 1 of the "popular outline"):


Half a century ago, when Marx was writing Capital, free competition appeared to the overwhelming majority of economists to be a “natural law”. Official science tried, by a conspiracy of silence, to kill the works of Marx, who by a theoretical and historical analysis of capitalism had proved that free competition gives rise to the concentration of production, which, in turn, at a certain stage of development, leads to monopoly. Today, monopoly has become a fact. Economists are writing mountains of books in which they describe the diverse manifestations of monopoly, and continue to declare in chorus that “Marxism is refuted”. But facts are stubborn things, as the English proverb says, and they have to be reckoned with, whether we like it or not. The facts show that differences between capitalist countries, e.g., in the matter of protection or free trade, only give rise to insignificant variations in the form of monopolies or in the moment of their appearance; and that the rise of monopolies, as the result of the concentration of production, is a general and fundamental law of the present stage of development of capitalism.

Anyhow, from you:


Point two is a logical consequence of the accumulation process. Recall that "Bank capital consists of 1) cash money, gold or notes; 2) securities." (Das Kapital, vol. III chapter 29)

So in other words, it's a point in the accumulation process where we have (essentially) modern day corporations that have a modern day stock market mechanism.

But this is predicted and explained (albeit minimally since it's essentially in the format of a collection of notes) in Das Kapital, vol. III, chapter 27.

Are you sure? From Chapter 27:


So far we have considered the development of the credit system — and the implicit latent abolition of capitalist property — mainly with reference to industrial capital. In the following chapters we shall consider credit with reference to interest-bearing capital as such, and to its effect on this capital, and the form it thereby assumes; and there are generally a few more specifically economic remarks still to be made.

But first this:

The credit system appears as the main lever of over-production and over-speculation in commerce solely because the reproduction process, which is elastic by nature, is here forced to its extreme limits, and is so forced because a large part of the social capital is employed by people who do not own it and who consequently tackle things quite differently than the owner, who anxiously weighs the limitations of his private capital in so far as he handles it himself.

A) Isn't that a slip of the tongue? Capitalist property isn't abolished until after the revolution.
B) In any event, there is no abolition, but rather a merger. You might say it's semantics, but it isn't (Ch. 3):


“A steadily increasing proportion of capital in industry,” writes Hilferding, “ceases to belong to the industrialists who employ it. They obtain the use of it only through the medium of the banks which, in relation to them, represent the owners of the capital. On the other hand, the bank is forced to sink an increasing share of its funds in industry. Thus, to an ever greater degree the banker is being transformed into an industrial capitalist. This bank capital, i.e., capital in money form, which is thus actually transformed into industrial capital, I call ‘finance capital’.” “Finance capital is capital controlled by banks and employed by industrialists.”

This definition is incomplete insofar as it is silent on one extremely important fact—on the increase of concentration of production and of capital to such an extent that concentration is leading, and has led, to monopoly. But throughout the whole of his work, and particularly in the two chapters preceding the one from which this definition is taken, Hilferding stresses the part played by capitalist monopolies.

I'm not sure Marx concluded such, given his focus on LTV and other matters. That's the price one pays for writing an elongated work, and not a "popular outline."



Oh, and that "pyramid holding" system I spoke of in the stamocap thread? From the same chapter:


Paramount importance attaches to the “holding system”, already briefly referred to above. The German economist, Heymann, probably the first to call attention to this matter, describes the essence of it in this way:

“The head of the concern controls the principal company (literally: the “mother company”); the latter reigns over the subsidiary companies (“daughter companies”) which in their turn control still other subsidiaries (“grandchild companies”), etc. In this way, it is possible with a comparatively small capital to dominate immense spheres of production. Indeed, if holding 50 per cent of the capital is always sufficient to control a company, the head of the concern needs only one million to control eight million in the second subsidiaries. And if this ‘interlocking’ is extended, it is possible with one million to control sixteen million, thirty-two million, etc.”

As for this:


Points three, four, and five were predicted (if not explicitly stated) in the manifesto.

You might want to venture into this thread (http://www.revleft.com/index.php?showtopic=65922), which rebutts your rebuttal without me having to speak. The Manifesto of the Communist Party lacks great detail (not to mention data, which even the "popular outline" had lots of) and is rife with poetic speech (so I take anything said there as merely a SMALL foundation stone).


So his real claim to fame is merely point two, which anyone could have deduced from reading Das Kapital. This is precisely what Marx did.

Like I said, not really, because there were other possibilities. Marx did not put sufficient emphasis on corporations (but rather on proprietorships and partnerships - "the capitalist(s)").

[ComradeRed]

Originally posted by Hammer+May 01, 2007 06:41 pm--> (Hammer @ May 01, 2007 06:41 pm)

...the material conditions are here already... What are the material conditions then?

And if they are present, then why is it that wage slavery is still ubiquitous? Your "mighty" vanguard should have been able to lead the "sheep" to their emancipation by now if it were so.

I'll refer back to your remarks in another thread:[/b]
So you (seemingly) blindly believe that the abolition of wage-slavery is imperialism?

It's not uncommon to shout at the top of your lungs that "COMMUNISM IS NOW POSSIBLE!" For example after Marx and Engels correctly identifies the conditions for communism in The German Ideology (http://www.marxists.org/archive/marx/works/1845/german-ideology/ch01a.htm):
Marx and Engels
This "alienation" (to use a term which will be comprehensible to the philosophers) can, of course, only be abolished given two practical premises. For it to become an "intolerable" power, i.e. a power against which men make a revolution, it must necessarily have rendered the great mass of humanity "propertyless," and produced, at the same time, the contradiction of an existing world of wealth and culture, both of which conditions presuppose a great increase in productive power, a high degree of its development. And, on the other hand, this development of productive forces (which itself implies the actual empirical existence of men in their world-historical, instead of local, being) is an absolutely necessary practical premise because without it want is merely made general, and with destitution the struggle for necessities and all the old filthy business would necessarily be reproduced; and furthermore, because only with this universal development of productive forces is a universal intercourse between men established, which produces in all nations simultaneously the phenomenon of the "propertyless" mass (universal competition), makes each nation dependent on the revolutions of the others, and finally has put world-historical, empirically universal individuals in place of local ones. Without this, (1) communism could only exist as a local event; (2) the forces of intercourse themselves could not have developed as universal, hence intolerable powers: they would have remained home-bred conditions surrounded by superstition; and (3) each extension of intercourse would abolish local communism. Empirically, communism is only possible as the act of the dominant peoples "all at once" and simultaneously, which presupposes the universal development of productive forces and the world intercourse bound up with communism. Moreover, the mass of propertyless workers " the utterly precarious position of labour " power on a mass scale cut off from capital or from even a limited satisfaction and, therefore, no longer merely temporarily deprived of work itself as a secure source of life " presupposes the world market through competition. The proletariat can thus only exist world-historically, just as communism, its activity, can only have a "world-historical" existence. World-historical existence of individuals means existence of individuals which is directly linked up with world history. --emphasis added

Basically: when the material conditions is when capitalism is "suitably advanced technologically". How unsatisfactory an answer! Can't it be put any clearer?

Sadly no. I suspect that nanotechnology is the specific technology...but we won't really know until nanotechnology really comes about.

So is the material conditions present? Well they go on to state:
Communism is for us not a state of affairs which is to be established, an ideal to which reality [will] have to adjust itself. We call communism the real movement which abolishes the present state of things. The conditions of this movement result from the premises now in existence. Woops! Wrong about that one!

Since the rest of your post appears to be a failed attempt to rebut what I said about Lenin's theory of imperialism being a bad theory. Seeing the attempts to find Marx quotes to back you up (which is nauseatingly circular reasoning), I guess I have to prove that Marx predicted "imperialism" (since you cannot really disprove what has yet to be proven).

The Concentration of Capital:
What does the primitive accumulation of capital, i.e., its historical genesis, resolve itself into? In so far as it is not immediate transformation of slaves and serfs into wage-laborers, and therefore a mere change of form, it only means the expropriation of the immediate producers, i.e., the dissolution of private property based on the labor of its owner. Private property, as the antithesis to social, collective property, exists only where the means of labor and the external conditions of labor belong to private individuals. But according as these private individuals are laborers or not laborers, private property has a different character. The numberless shades, that it at first sight presents, correspond to the intermediate stages lying between these two extremes. The private property of the laborer in his means of production is the foundation of petty industry, whether agricultural, manufacturing, or both; petty industry, again, is an essential condition for the development of social production and of the free individuality of the laborer himself. Of course, this petty mode of production exists also under slavery, serfdom, and other states of dependence. But it flourishes, it lets loose its whole energy, it attains its adequate classical form, only where the laborer is the private owner of his own means of labor set in action by himself: the peasant of the land which he cultivates, the artisan of the tool which he handles as a virtuoso. This mode of production pre-supposes parcelling of the soil and scattering of the other means of production. As it excludes the concentration of these means of production, so also it excludes co-operation, division of labor within each separate process of production, the control over, and the productive application of the forces of Nature by society, and the free development of the social productive powers. It is compatible only with a system of production, and a society, moving within narrow and more or less primitive bounds. To perpetuate it would be, as Pecqueur rightly says, "to decree universal mediocrity". At a certain stage of development, it brings forth the material agencies for its own dissolution. From that moment new forces and new passions spring up in the bosom of society; but the old social organization fetters them and keeps them down. It must be annihilated; it is annihilated. Its annihilation, the transformation of the individualized and scattered means of production into socially concentrated ones, of the pigmy property of the many into the huge property of the few, the expropriation of the great mass of the people from the soil, from the means of subsistence, and from the means of labor, this fearful and painful expropriation of the mass of the people forms the prelude to the history of capital. It comprises a series of forcible methods, of which we have passed in review only those that have been epoch-making as methods of the primitive accumulation of capital. The expropriation of the immediate producers was accomplished with merciless Vandalism, and under the stimulus of passions the most infamous, the most sordid, the pettiest, the most meanly odious. Self-earned private property, that is based, so to say, on the fusing together of the isolated, independent laboring-individual with the conditions of his labor, is supplanted by capitalistic private property, which rests on exploitation of the nominally free labor of others, i.e., on wage-labor. [1]

As soon as this process of transformation has sufficiently decomposed the old society from top to bottom, as soon as the laborers are turned into proletarians, their means of labor into capital, as soon as the capitalist mode of production stands on its own feet, then the further socialization of labor and further transformation of the land and other means of production into socially exploited and, therefore, common means of production, as well as the further expropriation of private proprietors, takes a new form. That which is now to be expropriated is no longer the laborer working for himself, but the capitalist exploiting many laborers. This expropriation is accomplished by the action of the immanent laws of capitalistic production itself, by the centralization of capital. One capitalist always kills many. Hand in hand with this centralization, or this expropriation of many capitalists by few, develop, on an ever-extending scale, the co-operative form of the labor-process, the conscious technical application of science, the methodical cultivation of the soil, the transformation of the instruments of labor into instruments of labor only usable in common, the economizing of all means of production by their use as means of production of combined, socialized labor, the entanglement of all peoples in the net of the world-market, and with this, the international character of the capitalistic regime. Along with the constantly diminishing number of the magnates of capital, who usurp and monopolize all advantages of this process of transformation, grows the mass of misery, oppression, slavery, degradation, exploitation; but with this too grows the revolt of the working-class, a class always increasing in numbers, and disciplined, united, organized by the very mechanism of the process of capitalist production itself. The monopoly of capital becomes a fetter upon the mode of production, which has sprung up and flourished along with, and under it. Centralization of the means of production and socialization of labor at last reach a point where they become incompatible with their capitalist integument. Thus integument is burst asunder. The knell of capitalist private property sounds. The expropriators are expropriated.

The capitalist mode of appropriation, the result of the capitalist mode of production, produces capitalist private property. This is the first negation of individual private property, as founded on the labor of the proprietor. But capitalist production begets, with the inexorability of a law of Nature, its own negation. It is the negation of negation. This does not re-establish private property for the producer, but gives him individual property based on the acquisition of the capitalist era: i.e., on co-operation and the possession in common of the land and of the means of production.

The transformation of scattered private property, arising from individual labor, into capitalist private property is, naturally, a process, incomparably more protracted, violent, and difficult, than the transformation of capitalistic private property, already practically resting on socialized production, into socialized property. In the former case, we had the expropriation of the mass of the people by a few usurpers; in the latter, we have the expropriation of a few usurpers by the mass of the people. [2] -emphasis added

Das Kapital, vol. I, chapter 32 (http://marxists.org/archive/marx/works/1867-c1/ch32.htm)


Except as personified capital, the capitalist has no historical value, and no right to that historical existence, which, to use an expression of the witty Lichnowsky, "hasn"t got no date." And so far only is the necessity for his own transitory existence implied in the transitory necessity for the capitalist mode of production. But, so far as he is personified capital, it is not values in use and the enjoyment of them. but exchange-value and its augmentation, that spur him into action. Fanatically bent on making value expand itself, he ruthlessly forces the human race to produce for production"s sake; he thus forces the development of the productive powers of society, and creates those material conditions, which alone can form the real basis of a higher form of society, a society in which the full and free development of every individual forms the ruling principle. Only as personified capital is the capitalist respectable. As such, he shares with the miser the passion for wealth as wealth. But that which in the miser is a mere idiosyncrasy, is, in the capitalist, the effect of the social mechanism, of which he is but one of the wheels. Moreover, the development of capitalist production makes it constantly necessary to keep increasing the amount of the capital laid out in a given industrial undertaking, and competition makes the immanent laws of capitalist production to be felt by each individual capitalist, as external coercive laws. It compels him to keep constantly extending his capital, in order to preserve it, but extend it he cannot, except by means of progressive accumulation.

So far, therefore, as his actions are a mere function of capital " endowed as capital is, in his person, with consciousness and a will " his own private consumption is a robbery perpetrated on accumulation, just as in book-keeping by double entry, the private expenditure of the capitalist is placed on the debtor side of his account against his capital. To accumulate, is to conquer the world of social wealth, to increase the mass of human beings exploited by him, and thus to extend both the direct and the indirect sway of the capitalist. [20]

But original sin is at work everywhere. As capitalist production, accumulation, and wealth, become developed, the capitalist ceases to be the mere incarnation of capital. He has a fellow-feeling for his own Adam, and his education gradually enables him to smile at the rage for asceticism, as a mere prejudice of the old-fashioned miser. While the capitalist of the classical type brands individual consumption as a sin against his function, and as "abstinence" from accumulating, the modernised capitalist is capable of looking upon accumulation as "abstinence" from pleasure.

"Two souls, alas, do dwell with in his breast;
The one is ever parting from the other." [21]

At the historical dawn of capitalist production, " and every capitalist upstart has personally to go through this historical stage " avarice, and desire to get rich, are the ruling passions. But the progress of capitalist production not only creates a world of delights; it lays open, in speculation and the credit system, a thousand sources of sudden enrichment. When a certain stage of development has been reached, a conventional degree of prodigality, which is also an exhibition of wealth, and consequently a source of credit, becomes a business necessity to the "unfortunate" capitalist. Luxury enters into capital"s expenses of representation. Moreover, the capitalist gets rich, not like the miser, in proportion to his personal labour and restricted consumption, but at the same rate as he squeezes out the labour-power of others, and enforces on the labourer abstinence from all life"s enjoyments. Although, therefore, the prodigality of the capitalist never possesses the bon"-fide character of the open-handed feudal lord"s prodigality, but, on the contrary, has always lurking behind it the most sordid avarice and the most anxious calculation, yet his expenditure grows with his accumulation, without the one necessarily restricting the other. But along with this growth, there is at the same time developed in his breast, a Faustian conflict between the passion for accumulation, and the desire for enjoyment. --emphasis added

Das Kapital, vol. I, chapter 24, section 3 (http://marxists.org/archive/marx/works/1867-c1/ch24.htm#S3)


Growth of capital involves growth of its variable constituent or of the part invested in labour-power. A part of the surplus-value turned into additional capital must always be re-transformed into variable capital, or additional labour-fund. If we suppose that, all other circumstances remaining the same, the composition of capital also remains constant (i.e., that a definite mass of means of production constantly needs the same mass of labour-power to set it in motion), then the demand for labour and the subsistence-fund of the labourers clearly increase in the same proportion as the capital, and the more rapidly, the more rapidly the capital increases. Since the capital produces yearly a surplus-value, of which one part is yearly added to the original capital; since this increment itself grows yearly along with the augmentation of the capital already functioning; since lastly, under special stimulus to enrichment, such as the opening of new markets, or of new spheres for the outlay of capital in consequence of newly developed social wants, &c., the scale of accumulation may be suddenly extended, merely by a change in the division of the surplus-value or surplus-product into capital and revenue, the requirements of accumulating capital may exceed the increase of labour-power or of the number of labourers; the demand for labourers may exceed the supply, and, therefore, wages may rise. This must, indeed, ultimately be the case if the conditions supposed above continue. For since in each year more labourers are employed than in its predecessor, sooner or later a point must be reached, at which the requirements of accumulation begin to surpass the customary supply of labour, and, therefore, a rise of wages takes place. A lamentation on this score was heard in England during the whole of the fifteenth, and the first half of the eighteenth centuries. The more or less favourable circumstances in which the wage-working class supports and multiplies itself, in no way alter the fundamental character of capitalist production. As simple reproduction constantly reproduces the capital-relation itself, i.e., the relation of capitalists on the one hand, and wage-workers on the other, so reproduction on a progressive scale, i.e., accumulation, reproduces the capital-relation on a progressive scale, more capitalists or larger capitalists at this pole, more wage-workers at that. The reproduction of a mass of labour-power, which must incessantly re-incorporate itself with capital for that capital"s self-expansion; which cannot get free from capital, and whose enslavement to capital is only concealed by the variety of individual capitalists to whom it sells itself, this reproduction of labour-power forms, in fact, an essential of the reproduction of capital itself. Accumulation of capital is, therefore, increase of the proletariat. --emphasis added

Das Kapital, vol. I, chapter 25, section 1 (http://marxists.org/archive/marx/works/1867-c1/ch25.htm#S1)


In Part IV. it was shown, how the development of the productiveness of social labour pre-supposes co-operation on a large scale; how it is only upon this supposition that division and combination of labour can be organised, and the means of production economised by concentration on a vast scale; how instruments of labour which, from their very nature, are only fit for use in common, such as a system of machinery, can be called into being; how huge natural forces can be pressed into the service of production; and how the transformation can be effected of the process of production into a technological application of science. On the basis of the production of commodities, where the means of production are the property of private persons, and where the artisan therefore either produces commodities, isolated from and independent of others, or sells his labour-power as a commodity, because he lacks the means for independent industry, co-operation on a large scale can realise itself only in the increase of individual capitals, only in proportion as the -means of social production and the means of subsistence are transformed into the private property of capitalists. The basis of the production of commodities can admit of production on a large scale in the capitalistic form alone. A certain accumulation of capital, in the hands of individual producers of commodities, forms therefore the necessary preliminary of the specifically capitalistic mode of production. We had, therefore, to assume that this occurs during the transition from handicraft to capitalistic industry. It may be called primitive accumulation, because it is the historic basis, instead of the historic result of specifically capitalist production. How it itself originates, we need not here inquire as yet. It is enough that it forms the starting-point. But all methods for raising the social productive power of labour that are developed on this basis, are at the same time methods for the increased production of surplus-value or surplus-product, which in its turn is the formative element of accumulation. They are, therefore, at the same time methods of the production of capital by capital, or methods of its accelerated accumulation. The continual re-transformation of surplus-value into capital now appears in the shape of the increasing magnitude of the capital that enters into the process of production. This in turn is the basis of an extended scale of production, of the methods for raising the productive power of labour that accompany it, and of accelerated production of surplus-value. If, therefore, a certain degree of accumulation of capital appears as a condition of the specifically capitalist mode of production, the latter causes conversely an accelerated accumulation of capital. With the accumulation of capital, therefore, the specifically capitalistic mode of production develops, and with the capitalist mode of production the accumulation of capital. Both these economic factors bring about, in the compound ratio of the impulses they reciprocally give one another, that change in the technical composition of capital by which the variable constituent becomes always smaller and smaller as compared with the constant.

Every individual capital is a larger or smaller concentration of means of production, with a corresponding command over a larger or smaller labour-army. Every accumulation becomes the means of new accumulation. With the increasing mass of wealth which functions as capital, accumulation increases the concentration of that wealth in the hands of individual capitalists, and thereby widens the basis of production on a large scale and of the specific methods of capitalist production. The growth of social capital is effected by the growth of many individual capitals. All other circumstances remaining the same, individual capitals, and with them the concentration of the means of production, increase in such proportion as they form aliquot parts of the total social capital. At the same time portions of the original capitals disengage themselves and function as new independent capitals. Besides other causes, the division of property, within capitalist families, plays a great part in this. With the accumulation of capital, therefore, the number of capitalists grows to a greater or less extent. Two points characterise this kind of concentration which grows directly out of, or rather is identical with, accumulation. First: The increasing concentration of the social means of production in the hands of individual capitalists is, other things remaining equal, limited by the degree of increase of social wealth. Second: The part of social capital domiciled in each particular sphere of production is divided among many capitalists who face one another as independent commodity-producers competing with each other. Accumulation and the concentration accompanying it are, therefore, not only scattered over many points, but the increase of each functioning capital is thwarted by the formation of new and the sub-division of old capitals. Accumulation, therefore, presents itself on the one hand as increasing concentration of the means of production, and of the command over labour; on the other, as repulsion of many individual capitals one from another.

This splitting-up of the total social capital into many individual capitals or the repulsion of its fractions one from another, is counteracted by their attraction. This last does not mean that simple concentration of the means of production and of the command over labour, which is identical with accumulation. It is concentration of capitals already formed, destruction of their individual independence, expropriation of capitalist by capitalist, transformation of many small into few large capitals. This process differs from the former in this, that it only pre-supposes a change in the distribution of capital already to hand, and functioning; its field of action is therefore not limited by the absolute growth of social wealth, by the absolute limits of accumulation. Capital grows in one place to a huge mass in a single hand, because it has in another place been lost by many. This is centralisation proper, as distinct from accumulation and concentration.

The laws of this centralisation of capitals, or of the attraction of capital by capital, cannot be developed here. A brief hint at a few facts must suffice. The battle of competition is fought by cheapening of commodities. The cheapness of commodities demands, caeteris paribus, on the productiveness of labour, and this again on the scale of production. Therefore, the larger capitals beat the smaller. It will further be remembered that, with the development of the capitalist mode of production, there is an increase in the minimum amount of individual capital necessary to carry on a business under its normal conditions. The smaller capitals, therefore, crowd into spheres of production which Modern Industry has only sporadically or incompletely got hold of. Here competition rages in direct proportion to the number, and in inverse proportion to the magnitudes, of the antagonistic capitals. It always ends in the ruin of many small capitalists, whose capitals partly pass into the hands of their conquerors, partly vanish. Apart from this, with capitalist production an altogether new force comes into play " the credit system, which in its first stages furtively creeps in as the humble assistant of accumulation, drawing into the hands of individual or associated capitalists, by invisible threads, the money resources which lie scattered, over the surface of society, in larger or smaller amounts; but it soon becomes a new and terrible weapon in the battle of competition and is finally transformed into an enormous social mechanism for the centralisation of capitals.

Commensurately with the development of capitalist production and accumulation there develop the two most powerful levers of centralisation " competition and credit. At the same time the progress of accumulation increases the material amenable to centralisation, i.e., the individual capitals, whilst the expansion of capitalist production creates, on the one hand, the social want, and, on the other, the technical means necessary for those immense industrial undertakings which require a previous centralisation of capital for their accomplishment. To-day, therefore, the force of attraction, drawing together individual capitals, and the tendency to centralisation are stronger than ever before. But if the relative extension and energy of the movement towards centralisation is determined, in a certain degree, by the magnitude of capitalist wealth and superiority of economic mechanism already attained, progress in centralisation does not in any way depend upon a positive growth in the magnitude of social capital. And this is the specific difference between centralisation and concentration, the latter being only another name for reproduction on an extended scale. Centralisation may result from a mere change in the distribution of capitals already existing,from a simple alteration in the quantitative grouping of the component parts of social capital. Here capital can grow into powerful masses in a single hand because there it has been withdrawn from many individual hands. In any given branch of industry centralisation would reach its extreme limit if all the individual capitals invested in it were fused into a single capital. [12] In a, given society the limit would be reached only when the entire social capital was united in the hands of either a single capitalist or a single capitalist company.

Centralisation completes the work of accumulation by enabling industrial capitalists to extend the scale of their operations. Whether this latter result is the consequence of accumulation or centralisation, whether centralisation is accomplished by the violent method of annexation " when certain capitals become such preponderant centres of attraction for others that they shatter the individual cohesion of the latter and then draw the separate fragments to themselves " or whether the fusion of a number of capitals already formed or in process of formation takes place by the smoother process of organising joint-stock companies " the economic effect remains the same. Everywhere the increased scale of industrial establishments is the starting-point for a more comprehensive organisation of the collective work of many, for a wider development of their material motive forces " in other words, for the progressive transformation of isolated processes of production, carried on by customary methods, into processes of production socially combined and scientifically arranged.

But accumulation, the gradual increase of capital by reproduction as it passes from the circular to the spiral form, is clearly a very slow procedure compared with centralisation, which has only to change the quantitative groupings of the constituent parts of social capital. The world would still be without railways if it had had to wait until accumulation had got a few individual capitals far enough to be adequate for the construction of a railway. Centralisation, on the contrary, accomplished this in the twinkling of an eye, by means of joint-stock companies. And whilst centralisation thus intensifies and accelerates the effects of accumulation, it simultaneously extends and speeds those revolutions in the technical composition of capital which raise its constant portion at the expense of its variable portion, thus diminishing the relative demand for labour.

The masses of capital fused together overnight by centralisation reproduce and multiply as the others do, only more rapidly, thereby becoming new and powerful levers in social accumulation. Therefore, when we speak of the progress of social accumulation we tacitly include " to-day " the effects of centralisation.

The additional capitals formed in the normal course of accumulation (see Chapter XXIV, Section 1) serve particularly as vehicles for the exploitation of new inventions and discoveries, and industrial improvements in general. But in time the old capital also reaches the moment of renewal from top to toe, when it sheds its skin and is reborn like the others in a perfected technical form, in which a smaller quantity of labour will suffice to set in motion a larger quantity of machinery and raw materials. The absolute reduction in the demand for labour which necessarily follows from this is obviously so much the greater the higher the degree in which the capitals undergoing this process of renewal are already massed together by virtue of the centralisation movement.

On the one hand, therefore, the additional capital formed in the course of accumulation attracts fewer and fewer labourers in proportion to its magnitude. On the other hand, the old capital periodically reproduced with change of composition, repels more and more of the labourers formerly employed by it. --emphasis added

Das Kapital, vol. I, chapter 25, section 2 (http://marxists.org/archive/marx/works/1867-c1/ch25.htm#S2)

I suggest you brush up more on the accumulation process then, as an exercise to see that you understand it (yes I am assigning you homework!) apply it over a sufficiently long period of time. What happens?

The merging of bank capital with industrial capital, and the creation on the basis of this "finance capital", of a financial oligarchy

Well we know that as time goes on, that the concentration of capital is held by fewer and fewer hands, so IF bank capital is fused with industrial capital then we have proven the existence of a financial oligarchy and thus the existence of "finance capital".

Thus our job is significantly simpler :)

Luckily I just happened to all ready have quoted Marx discussing this, but I'll specifically quote the relevant section here and other sections:
Commensurately with the development of capitalist production and accumulation there develop the two most powerful levers of centralisation " competition and credit. At the same time the progress of accumulation increases the material amenable to centralisation, i.e., the individual capitals, whilst the expansion of capitalist production creates, on the one hand, the social want, and, on the other, the technical means necessary for those immense industrial undertakings which require a previous centralisation of capital for their accomplishment. To-day, therefore, the force of attraction, drawing together individual capitals, and the tendency to centralisation are stronger than ever before. But if the relative extension and energy of the movement towards centralisation is determined, in a certain degree, by the magnitude of capitalist wealth and superiority of economic mechanism already attained, progress in centralisation does not in any way depend upon a positive growth in the magnitude of social capital. And this is the specific difference between centralisation and concentration, the latter being only another name for reproduction on an extended scale. Centralisation may result from a mere change in the distribution of capitals already existing,from a simple alteration in the quantitative grouping of the component parts of social capital. Here capital can grow into powerful masses in a single hand because there it has been withdrawn from many individual hands. In any given branch of industry centralisation would reach its extreme limit if all the individual capitals invested in it were fused into a single capital. [12] In a, given society the limit would be reached only when the entire social capital was united in the hands of either a single capitalist or a single capitalist company.

Centralisation completes the work of accumulation by enabling industrial capitalists to extend the scale of their operations. Whether this latter result is the consequence of accumulation or centralisation, whether centralisation is accomplished by the violent method of annexation " when certain capitals become such preponderant centres of attraction for others that they shatter the individual cohesion of the latter and then draw the separate fragments to themselves " or whether the fusion of a number of capitals already formed or in process of formation takes place by the smoother process of organising joint-stock companies " the economic effect remains the same. Everywhere the increased scale of industrial establishments is the starting-point for a more comprehensive organisation of the collective work of many, for a wider development of their material motive forces " in other words, for the progressive transformation of isolated processes of production, carried on by customary methods, into processes of production socially combined and scientifically arranged.

But accumulation, the gradual increase of capital by reproduction as it passes from the circular to the spiral form, is clearly a very slow procedure compared with centralisation, which has only to change the quantitative groupings of the constituent parts of social capital. The world would still be without railways if it had had to wait until accumulation had got a few individual capitals far enough to be adequate for the construction of a railway. Centralisation, on the contrary, accomplished this in the twinkling of an eye, by means of joint-stock companies. And whilst centralisation thus intensifies and accelerates the effects of accumulation, it simultaneously extends and speeds those revolutions in the technical composition of capital which raise its constant portion at the expense of its variable portion, thus diminishing the relative demand for labour.

The masses of capital fused together overnight by centralisation reproduce and multiply as the others do, only more rapidly, thereby becoming new and powerful levers in social accumulation. Therefore, when we speak of the progress of social accumulation we tacitly include " to-day " the effects of centralisation.

The additional capitals formed in the normal course of accumulation (see Chapter XXIV, Section 1) serve particularly as vehicles for the exploitation of new inventions and discoveries, and industrial improvements in general. But in time the old capital also reaches the moment of renewal from top to toe, when it sheds its skin and is reborn like the others in a perfected technical form, in which a smaller quantity of labour will suffice to set in motion a larger quantity of machinery and raw materials. The absolute reduction in the demand for labour which necessarily follows from this is obviously so much the greater the higher the degree in which the capitals undergoing this process of renewal are already massed together by virtue of the centralisation movement.
==========
Footnote:
12. Note in the 4th German edition. — The latest English and American “trusts� are already striving to attain this goal by attempting to unite at least all the large-scale concerns in one branch of industry into one great joint-stock company with a practical monopoly. F. E. --emphasis added

Das Kapital, vol. I, chapter 25, section 2 (http://marxists.org/archive/marx/works/1867-c1/ch25.htm#S2)

Hell, Marx even mentions as early as chapter 5 that merchants' capital and interest-bearing capital are "derivative forms":
In the course of our investigation, we shall find that both merchants" capital and interest-bearing capital are derivative forms, and at the same time it will become clear, why these two forms appear in the course of history before the modern standard form of capital. Das Kapital, vol. I, chapter 5 (http://marxists.org/archive/marx/works/1867-c1/ch05.htm)

Looking back at my notes on volume 3 of Das Kapital, it is mathematically flawed and thus is phenomenally difficult to tread through. As I've said, the third volume was essentially a collection of random notes glued together by Engels.

One thing of interest is the definition of bank capital which is miraculously consistent with volume I:
Bank capital consists of 1) cash money, gold or notes; 2) securities. The latter can be subdivided into two parts: commercial paper or bills of exchange, which run for a period, become due from time to time, and whose discounting constitutes the essential business of the banker; and public securities, such as government bonds, treasury notes, stocks of all kinds, in short, interest-bearing paper which is however significantly different from bills of exchange. Das Kapital, vol. III, chapter 29 (http://www.marxists.org/archive/marx/works/1894-c3/ch29.htm)

This has however been mentioned in the first volume under a different name: usurer's capital.

Curiously Marx doesn't specify any difference between the two sorts of capital when referring to capital later on in volume I, when dealing with the law of accumulation, etc.

The Export of Capital, Formation of International Monopolies, and Carving of Territory


The discovery of America, the rounding of the Cape, opened up fresh ground for the rising bourgeoisie. The East-Indian and Chinese markets, the colonisation of America, trade with the colonies, the increase in the means of exchange and in commodities generally, gave to commerce, to navigation, to industry, an impulse never before known, and thereby, to the revolutionary element in the tottering feudal society, a rapid development.

The feudal system of industry, in which industrial production was monopolised by closed guilds, now no longer sufficed for the growing wants of the new markets. The manufacturing system took its place. The guild-masters were pushed on one side by the manufacturing middle class; division of labour between the different corporate guilds vanished in the face of division of labour in each single workshop.

Meantime the markets kept ever growing, the demand ever rising. Even manufacturer no longer sufficed. Thereupon, steam and machinery revolutionised industrial production. The place of manufacture was taken by the giant, Modern Industry; the place of the industrial middle class by industrial millionaires, the leaders of the whole industrial armies, the modern bourgeois.

Modern industry has established the world market, for which the discovery of America paved the way. This market has given an immense development to commerce, to navigation, to communication by land. This development has, in its turn, reacted on the extension of industry; and in proportion as industry, commerce, navigation, railways extended, in the same proportion the bourgeoisie developed, increased its capital, and pushed into the background every class handed down from the Middle Ages.

We see, therefore, how the modern bourgeoisie is itself the product of a long course of development, of a series of revolutions in the modes of production and of exchange.

The bourgeoisie has through its exploitation of the world market given a cosmopolitan character to production and consumption in every country. To the great chagrin of Reactionists, it has drawn from under the feet of industry the national ground on which it stood. All old-established national industries have been destroyed or are daily being destroyed. They are dislodged by new industries, whose introduction becomes a life and death question for all civilised nations, by industries that no longer work up indigenous raw material, but raw material drawn from the remotest zones; industries whose products are consumed, not only at home, but in every quarter of the globe. In place of the old wants, satisfied by the production of the country, we find new wants, requiring for their satisfaction the products of distant lands and climes. In place of the old local and national seclusion and self-sufficiency, we have intercourse in every direction, universal inter-dependence of nations. And as in material, so also in intellectual production. The intellectual creations of individual nations become common property. National one-sidedness and narrow-mindedness become more and more impossible, and from the numerous national and local literatures, there arises a world literature.

The bourgeoisie, by the rapid improvement of all instruments of production, by the immensely facilitated means of communication, draws all, even the most barbarian, nations into civilisation. The cheap prices of commodities are the heavy artillery with which it batters down all Chinese walls, with which it forces the barbarians" intensely obstinate hatred of foreigners to capitulate. It compels all nations, on pain of extinction, to adopt the bourgeois mode of production; it compels them to introduce what it calls civilisation into their midst, i.e., to become bourgeois themselves. In one word, it creates a world after its own image.

The bourgeoisie has subjected the country to the rule of the towns. It has created enormous cities, has greatly increased the urban population as compared with the rural, and has thus rescued a considerable part of the population from the idiocy of rural life. Just as it has made the country dependent on the towns, so it has made barbarian and semi-barbarian countries dependent on the civilised ones, nations of peasants on nations of bourgeois, the East on the West.

The bourgeoisie keeps more and more doing away with the scattered state of the population, of the means of production, and of property. It has agglomerated population, centralised the means of production, and has concentrated property in a few hands. The necessary consequence of this was political centralisation. Independent, or but loosely connected provinces, with separate interests, laws, governments, and systems of taxation, became lumped together into one nation, with one government, one code of laws, one national class-interest, one frontier, and one customs-tariff.

The bourgeoisie, during its rule of scarce one hundred years, has created more massive and more colossal productive forces than have all preceding generations together. Subjection of Nature"s forces to man, machinery, application of chemistry to industry and agriculture, steam-navigation, railways, electric telegraphs, clearing of whole continents for cultivation, canalisation of rivers, whole populations conjured out of the ground " what earlier century had even a presentiment that such productive forces slumbered in the lap of social labour?

We see then: the means of production and of exchange, on whose foundation the bourgeoisie built itself up, were generated in feudal society. At a certain stage in the development of these means of production and of exchange, the conditions under which feudal society produced and exchanged, the feudal organisation of agriculture and manufacturing industry, in one word, the feudal relations of property became no longer compatible with the already developed productive forces; they became so many fetters. They had to be burst asunder; they were burst asunder.

Into their place stepped free competition, accompanied by a social and political constitution adapted in it, and the economic and political sway of the bourgeois class.

A similar movement is going on before our own eyes. Modern bourgeois society, with its relations of production, of exchange and of property, a society that has conjured up such gigantic means of production and of exchange, is like the sorcerer who is no longer able to control the powers of the nether world whom he has called up by his spells. For many a decade past the history of industry and commerce is but the history of the revolt of modern productive forces against modern conditions of production, against the property relations that are the conditions for the existence of the bourgeois and of its rule. It is enough to mention the commercial crises that by their periodical return put the existence of the entire bourgeois society on its trial, each time more threateningly. In these crises, a great part not only of the existing products, but also of the previously created productive forces, are periodically destroyed. In these crises, there breaks out an epidemic that, in all earlier epochs, would have seemed an absurdity " the epidemic of over-production. Society suddenly finds itself put back into a state of momentary barbarism; it appears as if a famine, a universal war of devastation, had cut off the supply of every means of subsistence; industry and commerce seem to be destroyed; and why? Because there is too much civilisation, too much means of subsistence, too much industry, too much commerce. The productive forces at the disposal of society no longer tend to further the development of the conditions of bourgeois property; on the contrary, they have become too powerful for these conditions, by which they are fettered, and so soon as they overcome these fetters, they bring disorder into the whole of bourgeois society, endanger the existence of bourgeois property. The conditions of bourgeois society are too narrow to comprise the wealth created by them. And how does the bourgeoisie get over these crises? On the one hand by enforced destruction of a mass of productive forces; on the other, by the conquest of new markets, and by the more thorough exploitation of the old ones. That is to say, by paving the way for more extensive and more destructive crises, and by diminishing the means whereby crises are prevented.The Communist Manifesto (http://marxists.org/archive/marx/works/1848/communist-manifesto/ch01.htm)

If you really want, I could pull out equivalent quotes from Das Kapital, the Manifesto was preferred because it's shorter and more to the point.

The internationalization of the monopolies is a logical consequence of the first point and this one dealing with the "world market".

[Die Neue Zeit]

Before I begin (and good luck on your physics research ;) ), I'll rebutt on some aspects and concede on others (the "Leninist" principle of self-criticism). I will undoubtedly look more into Marx's original accumulation theory, which I've discussed with you earlier ("homework").

Monopoly Capital (Baran, Sweezy - INTRO) (http://www.questia.com/PM.qst?a=o&docId=27261057)

And these guys, which you rejected (using Mandel's criticism), definitely read the same Das Kapital stuff as extensively as you have. :)


Engels, in some of his own writings after Marx's death and in editorial additions to the second and third volumes of Capital which he prepared for the printer, commented on the rapid growth of monopolies during the 1880's and 1890's, but he did not try to incorporate monopoly into the body of Marxian economic theory.

Like you said: "As I've said, the third volume was essentially a collection of random notes glued together by Engels."


The first to do this was Rudolf Hilferding in his important work, Das Finanzkapital, published in 1910. But for all his emphasis on monopoly, Hilferding did not treat it as a qualitatively new element in the capitalist economy; rather he saw it as effecting essentially quantitative modifications of the basic Marxian laws of capitalism [...] In an attempt to understand capitalism in its monopoly stage, we cannot abstract from monopoly or introduce it as a mere modifying factor; we must put it at the very center of the analytical effort.

I think this is the same trap you fell into, even with mathematics. As if monopoly was merely an extension of the accumulation theory, which it isn't. It's like the wide gap between microeconomics and macroeconomics, even though both accumulation and monopoly fall in the former in the mainstream term "economies of scale."

From the Das Kapital section you quoted:


It is concentration of capitals already formed, destruction of their individual independence, expropriation of capitalist by capitalist, transformation of many small into few large capitals. This process differs from the former in this, that it only pre-supposes a change in the distribution of capital already to hand, and functioning; its field of action is therefore not limited by the absolute growth of social wealth, by the absolute limits of accumulation. Capital grows in one place to a huge mass in a single hand, because it has in another place been lost by many. This is centralisation proper, as distinct from accumulation and concentration.

The problem with Marx's monopoly prediction is that his accumulation theory wrongfully predicted the end result of absolute monopolies in EVERY industry, with no room for "niche" businesses. Likewise... Lenin stumbled a bit with his "combination" stuff: true in some cases (General Electric, upstream-downstream Big Oil), and not so in others (Gazprom, JC Penney, etc.).


As we have already noted, Lenin, who was strongly influenced by Hilferding's analysis of the origins and diffusion of monopoly, based his theory of imperialism squarely on the predominance of monopoly in the developed capitalist countries. But as also noted, neither he nor his followers pursued the matter into the fundamentals of Marxian economic theory. There, paradoxically enough, in what might have been thought the area most immediately involved, the growth of monopoly made the least impression.

Perhaps this is the basis of your "Lenin's theory of imperialism is bad because it's not new," no? Like I said, Lenin made only one contribution to the accumulation theory (hourglass, a major but correct "deviation" from orthodox accumulation theory, WHOSE UNDERLYING ASSUMPTION WAS/IS THE FICTITIOUS NOTION OF PURE COMPETITION), while touching upon the whole theory in his "popular outline" superficially.

Anyhow, on to your Das Kapital stuff:


Commensurately with the development of capitalist production and accumulation there develop the two most powerful levers of centralisation - competition and credit... In any given branch of industry centralisation would reach its extreme limit if all the individual capitals invested in it were fused into a single capital... The latest English and American "trusts"� are already striving to attain this goal by attempting to unite at least all the large-scale concerns in one branch of industry into one great joint-stock company with a practical monopoly.

Careful! You are NOT referring to the entire TWO-FOLD second criterium of finance capital!

The trusts of which you quote are trying to unite NON-FINANCIAL businesses. There are obvious benefits to banks doing this, which is an example of the FIRST PART of this criterium, already alluded to by Engels above. From the "popular outline":


A steadily increasing proportion of capital in industry ceases to belong to the industrialists who employ it.

The SECOND PART of this criterium? NOT alluded to by Engels, but again from the "popular outline":


As banking develops and becomes concentrated in a small number of establishments, the banks grow from modest middlemen into powerful monopolies having at their command almost the whole of the money capital of all the capitalists and small businessmen and also the larger part of the means of production and sources of raw materials in any one country and in a number of countries. This transformation of numerous modest middlemen into a handful of monopolists is one of the fundamental processes in the growth of capitalism into capitalist imperialism; for this reason we must first of all examine the concentration of banking.

Like I said earlier, consolidations among businesses feeds and feeds from supplier consolidations. Banks, being suppliers of "bank capital," consolidate to meet the needs of the greater consolidated environment.





Side note: The link above, which is actually another critique of Hilferding, elaborates more on what Lenin said regarding my sig.


[C]ontemporary neo-Marxian theorists, contrary to Marx, have been following in the footsteps of Hilferding who doubted the applicability of the law of value to contemporary capitalism. The author precisely points out that the fault does not lie in Marx's theory but in the neo-Marxian notion of competition, whose origin resides in Hilferding's and the early neoclassicists' notion of pure competition. Consequently, the division of capitalism into laissez-faire and monopoly states leaves out competition entirely in the latter stage. The author suggests that the rejection of the above dichotomy depends on the rejection of pure competition--for competition in capitalism is neither pure nor perfect. In competition, the more powerful capitals tend to smash the weaker ones. This fight for survival, in turn, leads to further concentration and centralization of capital. Indeed, this real-world illustration has nothing to do with pure competition, an ideology dominant in modern economics, both orthodox and radical alike.

[ComradeRed]

Just for future reference, when you quote someone, please state who you are quoting as I am blindly guessing throughout reading your post who is being quoted when and where.

And after re-reading the introduction to Baran and Sweezy's Monopoly Capitalism (yeah, I've read it before), I went to Marxists.org and looked up some works by other Marxist economists on the subject. Mandel (http://www.marxists.org/archive/mandel/1967/03/ltv-mcap.htm) presents the most serious of problems to the theory quite well.

After writing this post, I apologize for how outrageously long it is, and how outrageously long the previous one was; but I couldn't make it any shorter!

Originally posted by Hammer+May 02, 2007 08:55 pm--> (Hammer @ May 02, 2007 08:55 pm)
The first to do this was Rudolf Hilferding in his important work, Das Finanzkapital, published in 1910. But for all his emphasis on monopoly, Hilferding did not treat it as a qualitatively new element in the capitalist economy; rather he saw it as effecting essentially quantitative modifications of the basic Marxian laws of capitalism [...] In an attempt to understand capitalism in its monopoly stage, we cannot abstract from monopoly or introduce it as a mere modifying factor; we must put it at the very center of the analytical effort.

I think this is the same trap you fell into, even with mathematics. As if monopoly was merely an extension of the accumulation theory, which it isn't. [/b]
This is not exactly my point.

My point is this: Lenin's theory "predicts" a list of predictions. This list was already made by Marx.

Now you wish to argue that "monopoly capitalism" is a unique phase of capitalism...or at least a set of unique characteristics of capitalism during a certain time.

The only real characteristic that is presented as to determine whether a "late enough" capitalism is "monopoly" capitalism or not is whether there are "niche businesses" along with the "non-niche" businesses. This is, speaking as a physicist, really unappealing! It's too ambiguous.

When can the capitalist mode of production develop into "monopoly" capitalism?

What defines a "niche" business as opposed to a "non-niche" business? What's the mechanism behind this?

Further, this "monopoly" capitalism is too literal an interpretation of Lenin's phrase "the concentration of production and capital has developed to such a high stage that it has created monopolies which play a decisive role in economic life" (from Imperialism the Highest Stage of Capitalism (http://www.marxists.org/archive/lenin/works/1916/imp-hsc/ch07.htm) by Lenin).

Curiously, Lenin thought that Marx had predicted this:
Originally posted by Lenin+--> (Lenin)Half a century ago, when Marx was writing Capital, free competition appeared to the overwhelming majority of economists to be a “natural law”. Official science tried, by a conspiracy of silence, to kill the works of Marx, who by a theoretical and historical analysis of capitalism had proved that free competition gives rise to the concentration of production, which, in turn, at a certain stage of development, leads to monopoly.[/b] --emphasis added

Imperialism: The Highest Stage of Capitalism (http://marxists.org/archive/lenin/works/1916/imp-hsc/ch01.htm#v22zz99h-196-GUESS) by Lenin

It appears that Lenin is confessing that his first prediction for his theory was all ready made by Marx!


[email protected]
It's like the wide gap between microeconomics and macroeconomics, even though both accumulation and monopoly fall in the former in the mainstream term "economies of scale." This would actually be a very bad argument...since the "Keynesian synthesis" there has been no difference between micro and macro economics!

A slight tangent but interesting nonetheless...


From the Das Kapital section you quoted:


It is concentration of capitals already formed, destruction of their individual independence, expropriation of capitalist by capitalist, transformation of many small into few large capitals. This process differs from the former in this, that it only pre-supposes a change in the distribution of capital already to hand, and functioning; its field of action is therefore not limited by the absolute growth of social wealth, by the absolute limits of accumulation. Capital grows in one place to a huge mass in a single hand, because it has in another place been lost by many. This is centralisation proper, as distinct from accumulation and concentration.

The problem with Marx's monopoly prediction is that his accumulation theory wrongfully predicted the end result of absolute monopolies in EVERY industry, with no room for "niche" businesses. Likewise... Lenin stumbled a bit with his "combination" stuff: true in some cases (General Electric, upstream-downstream Big Oil), and not so in others (Gazprom, JC Penney, etc.). Well after skimming through my copy of Lenin's Imperialism: The Highest Stage of Capitalism (albeit just the first chapter...on the concentration of capital), Lenin doesn't distinguish any "niche businesses" as you do...perhaps I am wrong, if so please provide a quote from Lenin (anywhere from Lenin but preferably something that's available online!) about the "niche business" concept.

Further, as Marx emphatically states at the last sentence: "This is centralisation proper, as distinct from accumulation and concentration."

Marx's law of accumulation states that there would be concentration of capital into fewer and fewer hands; he further states, in the first sentence of the quote: "It is concentration of capitals already formed, destruction of their individual independence, expropriation of capitalist by capitalist, transformation of many small into few large capitals."

He seems to have predicted the notion of "niche businesses", or at least understood that the idea of one "ruling firm" is absurd.



As we have already noted, Lenin, who was strongly influenced by Hilferding's analysis of the origins and diffusion of monopoly, based his theory of imperialism squarely on the predominance of monopoly in the developed capitalist countries. But as also noted, neither he nor his followers pursued the matter into the fundamentals of Marxian economic theory. There, paradoxically enough, in what might have been thought the area most immediately involved, the growth of monopoly made the least impression.Perhaps this is the basis of your "Lenin's theory of imperialism is bad because it's not new," no? No, I used common sense to stop and say "Hey there aren't any unique predictions here!" So I rejected it from that realization coupled to my strong biases as a physicist (you know, when two theories A and B make the same predictions, and when theory A is based on theory B, it's safe to reject A and accept B).


Like I said, Lenin made only one contribution to the accumulation theory (hourglass, a major but correct "deviation" from orthodox accumulation theory, WHOSE UNDERLYING ASSUMPTION WAS/IS THE FICTITIOUS NOTION OF PURE COMPETITION), while touching upon the whole theory in his "popular outline" superficially. Curiously, using this "underlying assumption" of "the fictitious notion of pure competition", Marx manages to yield identical results.

Further, the assertion that there is this "underlying assumption of pure competition" is completely unsubstantiated.

True, Marx mentions in one section that - for that section alone - of a single chapter in section 7 and 8 he will assume temporarily the use of constant competition.

He then goes on, in the next section, to state what happens if we suppose there isn't constant competition.

Since your last point appears to be that Marx and Engels never predicted the "merging of bank capital with industrial capital, and the creation on the basis of this 'finance capital', of a financial oligarchy", that should probably be the point that I address next. We have all ready seen however that 4 out of the 5 characteristics of imperialism have been predicted by Marx and Engels.

Well, given the above quotes, specifically where Marx mentions the "concentration of capital in fewer and fewer hands" and so forth, if we can prove that Marx predicts the "merging of bank capital with industrial capital" then we have proven also he predicts "the creation of a financial oligarchy".

But since the creation of a "financial oligarchy" could only occur if there is a "merging of bank capital and industrial capital", it follows that if Marx makes either prediction we're golden.

The closest thing to a straight definition of what exactly Lenin means by a "financial oligarchy" or "finance capital" is:
Lenin
Thirdly, monopoly has sprung from the banks. The banks have developed from modest middleman enterprises into the monopolists of finance capital. Some three to five of the biggest banks in each of the foremost capitalist countries have achieved the “personal link-up” between industrial and bank capital, and have concentrated in their hands the control of thousands upon thousands of millions which form the greater part of the capital and income of entire countries. A financial oligarchy, which throws a close network of dependence relationships over all the economic and political institutions of present-day bourgeois society without exception—such is the most striking manifestation of this monopoly. Imperialism: The Highest Stage of Capitalism (http://www.marxists.org/archive/lenin/works/1916/imp-hsc/ch10.htm) by Lenin

So in other words, banks centralize and use the investments as capital.

Banks definitionally use investment as capital! The latter part is rather un-necessary.

Well, the centralization of Banks could be seen as a consequence of the concentration of capital, as a Bank would fail if its investments fail...which would imply a concentration of capital process occurring.

How un-exciting of a derivation from the centralization of banks as finance capital to the concentration of capital; even less exciting is the derivation from the concentration of capital to the centralization of banks as finance capital (you simply rearrange the premises).

With firms going out of business, the bank would lose its investment. Firms naturally go out of business in capitalism, or else are merged with other firms.

So it is "possible" to derive from the concentration of capital, and by virtue of the definition of banks, this can be given a hand wavy argument to be the origin of "finance capital".

However, I admit that this last characteristic of finance capital was not explicitly stated by Marx.

But I stopped and thought about this concept of "finance capital": how accurate is it really? I mean being a scientist, I just can't help myself when it comes to testing things empirically. And this I couldn't hold myself back from, I had to test Lenin's theory of imperialism statistically with America over the last 15 years.

The two tests that I perform deal with the centralization of banks over time, and the second deals with the finance capital hypothesis.

Now being a scientist, I know insufficient data when I see it, SO I MUST PLACE A DISCLAIMER HERE! This uses 13 or 14 data entries and thus I need to use chi-squared regressions. However, having only the software in front of me available I had to press on using normal linear regressions and so forth. I will, in my next post, post the results of the chi-squared regression and see how well that goes (provided we get questionable results for the centralization of banks or the finance capital test).

Compared to say the automobile industry, where there are (what) a dozen firms, the banking sector is rather different.

In America alone, for example, there are well over fifty banks; and the fiftieth highest bank in America (in 2006) has $16,390,744 in domestic deposits and only 2 offices (oddly, there are those with one 1 office that have more in deposits!) (source (http://www2.fdic.gov/sod/sodSumReport.asp?barItem=3&sInfoAsOf=2006)).

Compare this to say Bank of America which has about 100/3 times as much in domestic deposits (and is "coincidentally" the number 1 bank by size by domestic deposits).

Let's look at some more statistics:

The number of banking institutions in America (8681 institutions in 2006)
The total assets they have ($11,860,228,515 in 2006; giving us an average of $1,366,228.374 per institution)
The total deposits they have ($7,825,099,892 again in 2006; an average of $901405.3556 per institution)
Total Interest Income: $643,458,504 an average of $74,122.625 per institution
Total Interest Expense: $313,323,452 an average of $36,093.0137 per institution
Net Interest Income: $330,135,052 an average of $38,029.6109 per institution
All of this was obtained from the FDIC website (http://www2.fdic.gov/sdi/sob/)

Hmm...this is nowhere near the centralization in other industries. Let's try comparing centralization of the banks by looking at the number of banks available over time.
In 1992: 11463
In 1993: 10959
In 1994: 10452
In 1995: 9941
In 1996: 9528
In 1997: 9143
In 1998: 8774
In 1999: 8580
In 2000: 8315
In 2001: 8080
In 2002: 7888
In 2003: 7770
In 2004: 7631
In 2005: 7526
In 2006: 7402
Note these were all taken on 31 December of the respective years.

Using a linear regression, and also setting t=number of years since 1991, we get:
N = -283.2821429*t + 11163.05714. It has an R=-0.969 and an R^2 = 0.9389625669. "Approximately 93.9 percent of the variation in the size of the numbers of institutions can be explained by time." I.e. the centralization of banks occurs over time.

The correlation coefficient, R^2, is satisfactorily high, if it were 70% or so we'd need to investigate this further, and if it were 50% or lower that would be enough to say that there is little or no influence of time in the number of institutions (if it were 50%, that would be equal chance of being on the linear regression as being off).

So it is reasonable to conclude that Banks are centralizing...which would follow from the handwavy argument I gave. Unless you are a hard core Leninist and believe it to be explicable only through Lenin's theory of imperialism.

This is the next thing under my lense of statistical scrutiny: the "merging of bank capital with industrial capital".

Logically, since this is an imperialist country, we'd be dealing with the investment in foreign capital, and the investment in securities by the banks. If there is a strong correlation, then we would have demonstrated the strength of Lenin's theory of imperialism. However if it is unsatisfactory, then we reject it as being falsified.

The approach is to find the amount invested by banks in equity securities, and the amount invested by "America" in equity securities, take the ratio of the former over the latter, and see how this behaves over time.

If Lenin was right, then the banks should have a strangle-hold over the amount invested in foreign firms. If however it turns out that there is very little relation between the percent banks invest abroad (supposing, as I have mentioned, they dedicate their entire amount spent on equity securities on foreign investment), then that pretty much falsifies the "finance capital" and "financial oligarchy" crap.

I'm just quivering with excitement :D

I am using for the investment abroad Direct Investment Abroad (https://www.bea.gov/scb/pdf/2006/07July/0706_DIP_WEB.pdf)'s Table A; and I am simply referring to the FDIC's Statistics on Equity Securities (http://www2.fdic.gov/SDI/SOB/) specifically. Note that I have notionally changed the units to be in millions of dollars.

These figures are in millions to simplify my life:
In 1992: $12,720.218 in foreign and domestic equity securities, $502,100 invested abroad
In 1993: $15,498.736 in foreign and domestic equity securities, $564,300 invested abroad
In 1994: $15,570.837 in foreign and domestic equity securities, $612,900 invested abroad
In 1995: $18,521.398 in foreign and domestic equity securities, $699,000 invested abroad
In 1996: $21,987.959 in foreign and domestic equity securities, $795,200 invested abroad
In 1997: $25,661.595 in foreign and domestic equity securities, $871,300 invested abroad
In 1998: $32,222.991 in foreign and domestic equity securities, $1,000,700 invested abroad
In 1999: $37,262.353 in foreign and domestic equity securities, $1,216,000 invested abroad
In 2000: $41,248.691 in foreign and domestic equity securities, $1,316,200 invested abroad
In 2001: $20,724.212 in foreign and domestic equity securities, $1,460,400 invested abroad
In 2002: $22,530.298 in foreign and domestic equity securities, $1,616,500 invested abroad
In 2003: $16,479.008 in foreign and domestic equity securities, $1,769,600 invested abroad
In 2004: $15,476.655 in foreign and domestic equity securities, $2,051,200 invested abroad
In 2005: $13,502.357 in foreign and domestic equity securities, $2,070,000 invested abroad

Now simply subtract from the second number that is given the first number, we get the first column, then take 1 minus divide the first column by the amount invested abroad to get the percent that the banks would've contributed had they invested all their money abroad. (The reason why it's 1 - (total investment - bank investment)/(total investment) is because we get (bank investment)/(total investment); the reason why it's done this way is because I simply plugged in the numbers to a program and it did it this way!) Here's the following data:
In 1992: $489379.782, the percent of foreign investment the bank contributes is 2.533%
In 1993: $648801.264, the percent of foreign investment the bank contributes is 2.747%
In 1994: $597329.163, the percent of foreign investment the bank contributes is 2.541%
In 1995: $680478.602, the percent of foreign investment the bank contributes is 2.650%
In 1996: $773212.041, the percent of foreign investment the bank contributes is 2.765%
In 1997: $845638.405, the percent of foreign investment the bank contributes is 2.945%
In 1998: $968477.009, the percent of foreign investment the bank contributes is 3.220%
In 1999: $1178737.647, the percent of foreign investment the bank contributes is 3.064%
In 2000: $1274951.309, the percent of foreign investment the bank contributes is 3.134%
In 2001: $1439675.788, the percent of foreign investment the bank contributes is 1.419%
In 2002: $1593969.702, the percent of foreign investment the bank contributes is 1.394%
In 2003: $1753120.992, the percent of foreign investment the bank contributes is 0.931%
In 2004: $2035723.345, the percent of foreign investment the bank contributes is 0.755%
In 2005: $2056497.643, the percent of foreign investment the bank contributes is 0.653%

Now, take a linear regression of the percent of foreign investment the bank contributes (P) against the number of years since 1991 (t):

P(t) = -.0016694833*t + 0.0344851556

It has an R^2 of 0.5458 which tells us that: "Approximately fifty five percent of the variation in the percent banks contribute to foreign investment can be explained by time." In other words, there is a crappy relation between time and the percent the bank contributes to foreign investment assuming that it is spent entirely on foreign investment.

This does not reflect the descriptions given to us by Lenin...particular because dP/dt<0&#33; In non-math terms, as time goes on, the percent the bank contributes is negative&#33;

So suppose you reject my hand wavy argument that the only distinguishable prediction for Lenin&#39;s theory of imperialism is the rise of finance capital, that&#39;s fine with me. That makes Lenin&#39;s theory a really bad theory since it overlaps so much and the overlap is identical with Marx&#39;s theory of the accumulation process.

So we go to the statistics, and low and behold&#33; The most imperialist nation in the world, the U&#036;, falsifies Lenin&#39;s theory of imperialism...more specifically the concept of finance capital as the merging of bank capital and industrial capital, "etc." That leaves the other four characteristics which have been explained using "good old fashioned" Marxism unscathed.

[Die Neue Zeit]

^^^ :lol: (In regards to the long post ;) )


Originally posted by You+--> (You)What defines a "niche" business as opposed to a "non-niche" business? What&#39;s the mechanism behind this?[/b]

Ever heard of "niche markets"? That&#39;s the basis of "niche businesses." For example, Apple was for quite a while a niche business, with its Macintosh computers being a product meeting the needs of a niche market.


Originally posted by You+--> (You)Well after skimming through my copy of Lenin&#39;s Imperialism: The Highest Stage of Capitalism (albeit just the first chapter...on the concentration of capital), Lenin doesn&#39;t distinguish any "niche businesses" as you do...perhaps I am wrong, if so please provide a quote from Lenin (anywhere from Lenin but preferably something that&#39;s available online&#33;) about the "niche business" concept.[/b]

What about my signature? And from Chapter 2 of Imperialism: The Highest Stage of Capitalism, WHICH I QUOTED EARLIER:


Originally posted by Lenin
In other words, the old capitalism, the capitalism of free competition with its indispensable regulator, the Stock Exchange, is passing away. A new capitalism has come to take its place, bearing obvious features of something transient, a mixture of free competition and monopoly. The question naturally arises: into what is this new capitalism “developing”? But the bourgeois scholars are afraid to raise this question.

Now:


Originally posted by You
It appears that Lenin is confessing that his first prediction for his theory was all ready made by Marx&#33;

That&#39;s what I said already for the most part, already. :huh:


Originally posted by You
Marx&#39;s law of accumulation states that there would be concentration of capital into fewer and fewer hands; he further states, in the first sentence of the quote: "It is concentration of capitals already formed, destruction of their individual independence, expropriation of capitalist by capitalist, transformation of many small into few large capitals."

He seems to have predicted the notion of "niche businesses", or at least understood that the idea of one "ruling firm" is absurd.

Not quite. Those "few large capitals" are, from my reading of Das Kapital, absolute monopolies in each sector of the economy (no quotes to support the continued existence of smaller firms), NOT "niche businesses and a ruling firm." You have no idea just how many niche companies and markets there are out there.


[email protected]
Compared to say the automobile industry, where there are (what) a dozen firms, the banking sector is rather different.

In America alone, for example, there are well over fifty banks; and the fiftieth highest bank in America (in 2006) has &#036;16,390,744 in domestic deposits and only 2 offices (oddly, there are those with one 1 office that have more in deposits&#33;)
around
Correct me if I&#39;m wrong, but in the United States, is there really a proper national bank that serves EVERY state? In Canada, each of the Big Five Banks has a presence in every province and territory (branches, ATMs, etc.).


You
The approach is to find the amount invested by banks in equity securities, and the amount invested by "America" in equity securities, take the ratio of the former over the latter, and see how this behaves over time.

...

This does not reflect the descriptions given to us by Lenin...particular because dP/dt<0&#33; In non-math terms, as time goes on, the percent the bank contributes is negative&#33;

So suppose you reject my hand wavy argument that the only distinguishable prediction for Lenin&#39;s theory of imperialism is the rise of finance capital, that&#39;s fine with me. That makes Lenin&#39;s theory a really bad theory since it overlaps so much and the overlap is identical with Marx&#39;s theory of the accumulation process.

So we go to the statistics, and low and behold&#33; The most imperialist nation in the world, the U&#036;, falsifies Lenin&#39;s theory of imperialism...more specifically the concept of finance capital as the merging of bank capital and industrial capital, "etc." That leaves the other four characteristics which have been explained using "good old fashioned" Marxism unscathed.

Your second stats make absolutely NO sense at all.

Why not make things simpler by dividing "invested abroad" by "foreign and domestic equity securities"? There IS a definite proportional increase from 3.95% in 1992 to 15.33% in 2005, and the jump into double digits started in 2003 with 10.74% (ALTHOUGH most of the years curiously yield consistent results of only 3-4%). Furthermore, compare the growth in "invested abroad" to GDP growth. Although there&#39;s relative stagnation from 2004 to 2005, there was a sharp increase in the period prior (2003 - 2004).

[ComradeRed]

Originally posted by Hammer+May 03, 2007 05:31 pm--> (Hammer &#064; May 03, 2007 05:31 pm)
Originally posted by You+--> (You)What defines a "niche" business as opposed to a "non-niche" business? What&#39;s the mechanism behind this?[/b]

Ever heard of "niche markets"? That&#39;s the basis of "niche businesses." For example, Apple was for quite a while a niche business, with its Macintosh computers being a product meeting the needs of a niche market.[/b]
I just wasn&#39;t sure if you were assigning some sort of new definition to the term or not, even then how do you quantitatively define it? As any firm not controlling the majority of the market?



[email protected]
Well after skimming through my copy of Lenin&#39;s Imperialism: The Highest Stage of Capitalism (albeit just the first chapter...on the concentration of capital), Lenin doesn&#39;t distinguish any "niche businesses" as you do...perhaps I am wrong, if so please provide a quote from Lenin (anywhere from Lenin but preferably something that&#39;s available online&#33;) about the "niche business" concept.

What about my signature? And from Chapter 2 of Imperialism: The Highest Stage of Capitalism, WHICH I QUOTED EARLIER:


Lenin
In other words, the old capitalism, the capitalism of free competition with its indispensable regulator, the Stock Exchange, is passing away. A new capitalism has come to take its place, bearing obvious features of something transient, a mixture of free competition and monopoly. The question naturally arises: into what is this new capitalism “developing”? But the bourgeois scholars are afraid to raise this question. A peculiar quote from Lenin to say the least...as he was dead wrong about his obituary of the stock market :lol:

This however is nothing more than a passing thought from Lenin...and post factum an incorrect one.

Regardless, you are about as valid as deriving from the passage the notion of niche firms as I do of deriving finance capital from the law of accumulation. Both require some deduction from the passages...as opposed to the idea simply falling onto our laps.


Not quite. Those "few large capitals" are, from my reading of Das Kapital, absolute monopolies in each sector of the economy (no quotes to support the continued existence of smaller firms), NOT "niche businesses and a ruling firm." You have no idea just how many niche companies and markets there are out there. Not quite, look at the Illustrations of Capitalist Accumulation (http://marxists.org/archive/marx/works/1867-c1/ch25.htm#S5).

It specifies by examples that the term "few large capitals" refers to a "few large firms".


Correct me if I&#39;m wrong, but in the United States, is there really a proper national bank that serves EVERY state? In Canada, each of the Big Five Banks has a presence in every province and territory (branches, ATMs, etc.). That&#39;s why I was careful to mention institutions instead of banks.


Your second stats make absolutely NO sense at all.

Why not make things simpler by dividing "invested abroad" by "foreign and domestic equity securities"? I thought I made it clear that I had simply used a program to do it, it&#39;s the program that did it not me.

It works out mathematically though. Let B = amount the bank invests, T = total investment.

B/T = 1 - (T-B)/T = 1 + (B-T)/T = (T + B - T)/T = B/T + (T-T)/T = B/T

It&#39;s fine mathematically, it&#39;s just the program needed to do it that way...for whatever reason it was thinking.

What this tells us is how much of the total "foreign investment" is from the banks...and rather unsurprisingly it never exceeds even 3.25%.

What wretched dictatorship of finance capital is this?&#33; :o

On the other hand, if banks aren&#39;t "fused" with "industry capital", then it would follow that they would have a relatively minimal influence on investment.

Speaking about the huge sums of money we are dealing with (several trillions of dollars), 3.25% is a sizeable amount (&#036;65 Bn&#33;) but comparatively small&#33;


There IS a definite proportional increase from 3.95% in 1992 to 15.33% in 2005, and the jump into double digits started in 2003 with 10.74% (ALTHOUGH most of the years curiously yield consistent results of only 3-4%). What exactly are you referring to?

WHAT is jumping "into double digits"? WHAT proportion are you referring to?


Furthermore, compare the growth in "invested abroad" to GDP growth. Irrelevant to determining the existence of finance capital...which was the entire point of my second statistical analysis.

The point is that this "synthesis" of "bank capital with industry capital" is empirically unobservable...which leaves: 1) this is irrelevant to imperialism and unobservable, 2) Lenin was wrong, 3) it is observable but Lenin didn&#39;t describe it correctly.

Comparing "invested abroad" to GDP growth is irrelevant especially because GDP growth is for a large extent a faulty indicator&#33;

[Die Neue Zeit]

I was "exactly referring to" this:


In 2005: &#036;13,502.357 in foreign and domestic equity securities, &#036;2,070,000 invested abroad

Divide &#036;2,070,000 by &#036;13,502,357, and you&#39;ll get 15.33%. With the very figures you cited, I divided the lower numbers on the right by their corresponding numbers on the left.

[ComradeRed]

Originally posted by [email protected] 03, 2007 07:35 pm
I was "exactly referring to" this:


In 2005: &#036;13,502.357 in foreign and domestic equity securities, &#036;2,070,000 invested abroad

Divide &#036;2,070,000 by &#036;13,502,357, and you&#39;ll get 15.33%. With the very figures you cited, I divided the lower numbers on the right by their corresponding numbers on the left.
Oh, haha, the statistics deceive you, it&#39;s not &#036;13,502,357, it&#39;s &#036;13,502.357, that is thirteen thousand five hundred two point three five seven million dollars.

[Die Neue Zeit]

Originally posted by ComradeRed+May 04, 2007 03:39 am--> (ComradeRed &#064; May 04, 2007 03:39 am)
[email protected] 03, 2007 07:35 pm
I was "exactly referring to" this:


In 2005: &#036;13,502.357 in foreign and domestic equity securities, &#036;2,070,000 invested abroad

Divide &#036;2,070,000 by &#036;13,502,357, and you&#39;ll get 15.33%. With the very figures you cited, I divided the lower numbers on the right by their corresponding numbers on the left.
Oh, haha, the statistics deceive you, it&#39;s not &#036;13,502,357, it&#39;s &#036;13,502.357, that is thirteen thousand five hundred two point three five seven million dollars. [/b]
^^^ But the U&#036; investment abroad CAN&#39;T by definition be THAT low - in the millions only (&#036;2 million bucks only???)&#33; We&#39;re talking TRILLION-DOLLAR institutions here&#33;

[ComradeRed]

Originally posted by Hammer+May 03, 2007 07:44 pm--> (Hammer @ May 03, 2007 07:44 pm)
Originally posted by [email protected] 04, 2007 03:39 am

[email protected] 03, 2007 07:35 pm
I was "exactly referring to" this:


In 2005: &#036;13,502.357 in foreign and domestic equity securities, &#036;2,070,000 invested abroad

Divide &#036;2,070,000 by &#036;13,502,357, and you&#39;ll get 15.33%. With the very figures you cited, I divided the lower numbers on the right by their corresponding numbers on the left.
Oh, haha, the statistics deceive you, it&#39;s not &#036;13,502,357, it&#39;s &#036;13,502.357, that is thirteen thousand five hundred two point three five seven million dollars.
^^^ But the U&#036; investment abroad CAN&#39;T by definition be THAT low - in the millions only&#33; We&#39;re talking TRILLION-DOLLAR institutions here&#33; [/b]
I don&#39;t think I explained the statistics too well.

The &#036;13,502.357 figure is the bank&#39;s investment in equities in millions of dollars I think.

That significantly larger figure is the total amount invested in foreign equities &#036;2,070,000 Mn = &#036;2.07 Tn.

So again the smaller number = the bank&#39;s investment both domestically and abroad, the ridiculously huge number = the total American investment in foreign equities.

Sorry for the confusion.

[Die Neue Zeit]

Originally posted by [email protected] 04, 2007 02:38 am
The point is that this "synthesis" of "bank capital with industry capital" is empirically unobservable...which leaves: 1) this is irrelevant to imperialism and unobservable, 2) Lenin was wrong, 3) it is observable but Lenin didn&#39;t describe it correctly.

Comparing "invested abroad" to GDP growth is irrelevant especially because GDP growth is for a large extent a faulty indicator&#33;
I just came about this interesting article (which probably leans towards #3):

Globalization, Speculative Capital and U.S. Hegemony (http://www.lrna.org/2-pt/v16ed5art2.html)


Just as the stage of monopoly capitalism and imperialism arose out of the quantitative stages of development of classic capitalism, speculative capital has emerged from finance capital as the dominant form of capital in the era of globalization. Classic finance capital, as described by Lenin, is the merger of bank capital and industrial capital under the control of the banks. This bank capital is lent to business owners and corporations for investment in production of commodities. Thus, finance capital is an essential part of the circuit of capital.

Speculation is the act of trading financial instruments (such as foreign currencies, stocks, bonds, and various financial derivatives) with the goal of making money. The amounts involved are staggering. Over &#036;25 trillion in currency moves through the world financial markets daily. Unlike finance capital, speculative capital is removed from the circuit of productive capital and does not create surplus value, but only “re-distributes” it. Speculative capital is not reinvested in hiring more workers, expanding plants and equipment, purchasing raw materials or new technology. Instead, these vast amounts are diverted into speculation where investors gamble on changes in the prices of financial instruments.

[ComradeRed]

I&#39;ll have to read this when I get the time, but if it is indeed the case that number 3 is correct that means that Lenin&#39;s theory of imperialism is indeed wrong...as its only unique prediction is wrong&#33;

Perhaps this fellow&#39;s idea of "speculative capital" would have something to test whether it is correct or not.

I&#39;ll worry about this a little later though, at my convenience ;)

[ComradeRed]

After carefully reading the first couple of paragraphs in the section "Speculative Capital", I have some major problems with this theory.


Unlike finance capital, speculative capital is removed from the circuit of productive capital and does not create surplus value, but only “re-distributes” it. So it works by means of magic?

There is an exchange going on, we begin with some investment M and we end up with some return M&#39;. That is to say M-M&#39;. All exchanges have at least this relationship at the end.

What you do buy as the commodity is money, C. The characteristic of this money is of its use as a commodity rather than its use as a medium of exchange.

So this is still a circuit of capital, M-C-M&#39;.

Now the question arises: does it make a difference?

Well, it changes this fellow&#39;s conclusion as a certainty. The surplus value is used to obtain more commodities, be they capital or personal.

If it&#39;s used to reinvest in "speculative capital" (supposing such a thing exists), they are reinvesting it in capital.

If it&#39;s used to buy commodities, then whoopdy-do it&#39;s still part of the circuitry of capital.

So the big difference in speculative capital is nonexistent.

Now, my favorite question, can this be empirically observed?

I&#39;m really tired and lazy right now, so I&#39;m going to say no so I won&#39;t have to look for it :P But in all odds it probably is observable, I&#39;ll have to look at this some more when I get the chance.

[edit] Just some a propos remarks.

First, it has been demonstrated that Lenin&#39;s theory of imperialism is a rather poor theory as it makes only one distinguishable prediction relative to the list of predictions presented from the Law of Accumulation.

This prediction has been tested and proven well wrong.

A serious problem is the last 4 empirical observations throw the theory completely off. But we can&#39;t ignore it as 4/14 = 28.57% of the data&#33; So, as I stated in the original post, I will use a chi-squared "goodness fit" test here of the linear approximation to tell us whether the theory can be salvaged or not.

If however we use the linear regression, that is the equation P(t) = -.0016694833*t + 0.0344851556 and use the Chi-squared goodness-of-fit test for this prediction, we first simplify the P(t) form to be naturally in percents and multiply the right hand side by 100, i.e. P(t)=-.16694833*t + 3.44851556.

Now we do the chi-squared goodness of fit test: &#092;sum^{15}_{i=1} (O(i)-P(i))*(O(i)-P(i))/P(i) = &#092;Chi^{2} = 2.61601527163948. The degrees of freedom are defined for the Chi-Squared test as df=(r-1)(c-1)=(14-1)(2-1)=13.

Cramer&#39;s phi = sqrt(&#092;Chi^{2}/(28)) = sqrt(2.61601527163948/28) = 0.093429117. This is treated like the correlation coeffecient, that is to say that "9.3429117% of the variation of the ratio of bank investment to total foreign investment can be explained by time", i.e. the advancement of capitalism.

This would allow a daring Leninist to guess about the possibilities of "hidden variables" that would make this a better approximation.

But as it stands, having a function that accounts for less than one tenth of the value of the range is lousy&#33; If anything I would say that Lenin&#39;s theory of imperialism has been completely "falsified"&#33;

Now being a nerdy fellow, I tried various other regressions other than a linear regression.

For example, I tried using the power regression and I got:
P(t)=a*b^t
For a=0.0432071609, b=0.8987345787, and the correlation coeffecient r^2 = 0.6199339187. This is significantly better, it can explain 62% of the variation in the ratio of bank investment over total investment.

Then I tried the exponential regression:
P(t) = a*t^b
For a=0.042123512, b=-0.4308750954, the coeffecient of correlation r^2 = 0.3457252349 telling us that "34.57% of the variation in the ratio of the investment of banks over the total foreign investment is describable by time". This is not as good as the power regression.

Then I tried doing a quadratic and quartic regression, but realized that the leading coeffecients will vanish as the degree of the polynomial goes to infinity (that is a*x^N + b*x^(N-1) + ... + constant, a is incredibly small and for all practical purposes zero, b is slightly larger but still zero for practical purposes, leaving an approximate line around 2% -- which basically says the variations are negligibly correlated with time).

Last but not least was the logarithmic regression:
P(t) = a + b*Ln(t)
For a=0.0338141334, b=-0.0065856846, and the correlation coefficient being r^2 = 0.2908433654, i.e. "29.08% of the variation of the ratio of investment of banks over total investment abroad is explainable through time alone".

The best regression was the power regression. First thing to do is to check the residuals to see if there is some sort of pattern. If you look at the P(t)-O(t) plot of the difference between the predicted outcome and the observed outcome, you&#39;ll notice there is a distinct pattern that is somewhat resembling a cosine wave. It looks roughly speaking as .014*cos(pi*t/7), so I will plug that in and see what we get for the residuals.

That is to say that we subtract from the P(t) equation this quantity, as this quantity describes the residuals left over from P(t)-O(t). So we have P&#39;(t) = a + b*Ln(x) - 0.014*cos(pi*t/7). There is, unsurprisingly, residuals still.

If I were less lazy, I&#39;d use fourier analysis here. But I am lazy, so I won&#39;t. However, I couldn&#39;t resist having another go at it&#33; So I got the newest form:
P&#39;&#39;(t) = a + b*Ln(x) - 0.014*cos(pi*t/7) - (0.0034325203*sin(2.091820119t + 0.1195354886) - 5.460274*10^-4)
Now my obsessive compulsive side has come in, and I decided to program a little pseudo-Fourier analysis program that will keep checking the regression until it is satisfactorily negligible :D

However, that does not mean that Lenin&#39;s theory of imperialism is saved. The addition of a single year&#39;s worth of data and the fourier analysis goes out the window. This expansion I&#39;m doing works only around the given data, so really all this elimination of error is meaningless except as a distraction from boredom.

One rather glaringly serious problem is, if we are to accept the power regression as correct, there is still a serious problem presented to Lenin&#39;s theory: as t goes to infinity, P(t) vanishes (i.e. as we advance forward and forward through imperialism, the amount of investment from banks decreases exponentially).

So it appears that statistics really couldn&#39;t save Lenin&#39;s theory of imperialism, it&#39;s been conclusively "falsified".

Now, from that article referenced to me, Leninists appear to be trying to save the theory by formulating replacements for the falsified component of the theory. This I believe is a mistaken approach, there is no intuitive reason to accept a replacement for "finance capital" (there wasn&#39;t even one to accept "finance capital" in the first place&#33;).

I personally think it&#39;s time to leave Lenin&#39;s theory of imperialism in the dust bin of history. It&#39;s of no use to us today.

[Die Neue Zeit]

This prediction has been tested and proven well wrong.

Not really. Read the quote above again:

1) Contrast "classic finance capital" with speculative capital.
2) Isn&#39;t it possible that the U&#036; may actually be a DECLINING imperialist power ("the highest stage of capitalism" isn&#39;t the last, but rather just where it is at its peak), which would explain its net import of capital (current account deficits, increase in national debt to foreign holders, etc.)? Why didn&#39;t you use stats from EU countries (GERMANY leads the world in EXPORTS (http://www.chinadaily.com.cn/china/2007-04/12/content_849420.htm)), or from the Orient (Japan and/or China, the latter of which is catching up to Germany)?

Overall, I really think you&#39;ve limited yourself too much to U&#036; imperialism, when you&#39;ve got to take stats from the system AS A WHOLE.

After all, the French during Lenin&#39;s time weren&#39;t exactly on the ascendant.



My take: thanks to the Iraq BLUNDER (US Big Oil can&#39;t even get their production-sharing agreements right, losing to other countries here AND ELSEWHERE), a multipolar world is emerging (fifth criterium: spheres of influence). The trade blocs are only the beginning of a NEW international monopoly (fourth criterium). Overall, there is already more export of capital (third criterium) AND proliferation of GLOBAL finance capital.

[ComradeRed]

Originally posted by [email protected] 04, 2007 04:46 pm
^^^ Not exactly. Read the quote above again:

1) Contrast "classic finance capital" with speculative capital.
Well, speculative capital being defined as: "foreign currencies, stocks, bonds, and various financial derivatives"? What indicators would be acceptable to you for me to add together and call the "speculative capital" indicator (since it&#39;s all splitting hairs to me)?



2) Isn&#39;t it possible that the U&#036; may actually be a DECLINING imperialist power, which would explain its net import of capital (current account deficits, increase in national debt to foreign holders, etc.)? Why didn&#39;t you use stats from EU countries (GERMANY leads the world in EXPORTS (http://www.chinadaily.com.cn/china/2007-04/12/content_849420.htm)), or from the Orient (Japan and/or China, the latter of which is catching up to Germany)?

Overall, I really think you&#39;ve limited yourself too much to U&#036; imperialism, when you&#39;ve got to take stats from the system AS A WHOLE. I actually am looking in to statistics from the UK, Germany, and Japan; but it only takes one counter-example to disprove a proof...

I&#39;ll look at the "classical finance capital" and the "speculative capital"...the former being the Bank&#39;s foreign and/or domestic investment in securities whereas the latter has yet to really be defined well in terms of bourgeois indicators and time series and so forth.

[ComradeRed]

Originally posted by Hammer
My take: thanks to the Iraq BLUNDER (US Big Oil can&#39;t even get their production-sharing agreements right, losing to other countries here AND ELSEWHERE), a multipolar world is emerging (fifth criterium: spheres of influence). The trade blocs are only the beginning of a NEW international monopoly (fourth criterium). Overall, there is already more export of capital (third criterium) AND proliferation of GLOBAL finance capital. Possible, but we don&#39;t really know how other "imperialist" powers are in this regard. It could be that all imperialist nations have this same phenomena.

Further, you attributing this to "imperialism" alone is rather "too quick" a leap; there isn&#39;t enough statistics to back you up on this&#33;

Perhaps most importantly here, the theory of imperialism is indistinguishable in its predictions compared to Marx and Engels&#39; theories predictions...except for the finance capital bit.

More Statistical Fun&#33;

The German statistics are hard for me since: 1) I don&#39;t speak German, so it&#39;s difficult to use the government sites, 2) the English sites with German data are not free, 3) the data starts from the unification of Germany in the 1990s so we wouldn&#39;t have much better data sampling.

So I went to England. Lo and Behold&#33; It has become popular to invest in England so much so that people are uninvesting abroad and investing in England&#33;

I took a few statistics from the Pink Book. Here is the FDI (foreign direct investment) net flows ordinary shares in £ Mn
In 1987: £ -3789
In 1988: £ -4311
In 1989: £ -4185
In 1990: £ 2755
In 1991: £ 296
In 1992: £ 1047
In 1993: £ 1007
In 1994: £ -5007
In 1995: £ 4717
In 1996: £ 2512
In 1997: £ -10686
In 1998: £ -19753
In 1999: £ -55177
In 2000: £ -88613
In 2001: £ 5015
In 2002: £ -13873
In 2003: £ -13580
In 2004: £ 7160
In 2005: £ 61033
There is no linear regression here against time or against population.

Just for comparison, here is the Combined overseas ordinary shares balances in £Mn
In 1964: £ 1345
In 1965: £ 1432
In 1966 : £ 1369
In 1967 : £ 1848
In 1968 : £ 2485
In 1969 : £ 2200
In 1970 : £ 2115
In 1971 : £ 2395
In 1972 : £ 4047
In 1973 : £ 3591
In 1974 : £ 2781
In 1975 : £ 3898
In 1976 : £ 5302
In 1977 : £ 4645
In 1978 : £ 5716
In 1979 : £ 6250
In 1980 : £ 10723
In 1981 : £ 14489
In 1982 : £ 21299
In 1983 : £ 33907
In 1984 : £ 40927
In 1985 : £ 48899
In 1986 : £ 70545
In 1987 : £ 58216
In 1988 : £ 79130
In 1989 : £ 121390
In 1990 : £ 89937
In 1991 : £ 116066
In 1992 : £ 128871
In 1993 : £ 182421
In 1994 : £ 173444
In 1995 : £ 197566
In 1996 : £ 214563
In 1997 : £ 237103
In 1998 : £ 255086
In 1999 : £ 357577
In 2000 : £ 337183
In 2001 : £ 324895
In 2002 : £ 264134
In 2003 : £ 300247
In 2004 : £ 331695
In 2005 : £ 432554
(Just for nerds like me who want to follow my trail, this is from Current Release : Investment by insurance companies, pension funds and trusts; Current Table : TOTAL NET INVESTMENT BY ASSET TYPE - COMBINED(1) from the statistics.gov.uk website)

This statistic is significantly better. The problem is that there is no easy way to figure out the amount that banks are investing in securities. So I generalized it to be all financial corporations, and I got the statistics very nicely:
In 1987 : £ 429
In 1988 : £ 610
In 1989 : £ 352
In 1990 : £ 99
In 1991 : £ 524
In 1992 : £ 513
In 1993 : £ 2348
In 1994 : £ 1689
In 1995 : £ 3002
In 1996 : £ 3854
In 1997 : £ 4365
In 1998 : £ 3092
In 1999 : £ 5178
In 2000 : £ 5060
In 2001 : £ 4223
In 2002 : £ 5278
In 2003 : £ 8897
In 2004 : £ 8211
In 2005 : £ 10204
In 2006 : £ 11448
Again, in £Mn. So I simply plugged this into my statistic-o-matic, using the data from 1987 to 2005 (only 19 pieces of data&#33;).

Here are the percents (rounded to the 3d decimal place):
In 1987: 0.737%
In 1988: 0.771%
In 1989: 0.290%
In 1990: 0.110%
In 1991: 0.451%
In 1992: 0.398%
In 1993: 1.287%
In 1994: 0.974%
In 1995: 1.519%
In 1996: 1.795%
In 1997: 1.841%
In 1998: 1.212%
In 1999: 1.448%
In 2000: 1.501%
In 2001: 1.300%
In 2002: 1.998%
In 2003: 2.963%
In 2004: 2.475%
In 2005: 2.359%

Again, none of these percents even exceed 3%. Somewhat indicative that Lenin&#39;s theory is more wrong than right.

Nonetheless, here is the linear regression of the percent against time (the percents put in decimal form, i.e. 5.35% = 0.0535) (with t=number of years since 1986):
P(t) = 0.0011966723*t + 0.0014179434
with the r^2 = .7381347202. That is to say "73.8% of the fluctuation in the ratio of financial corporations&#39; property over the total net investment abroad is explainable by time."

But notice the entry for the year 1990 for the property assets of financial corporations is only 99 Mn pounds, it appears to be an outlier. It actually isn&#39;t. The linear regression for the ratios against t=number of years since 1986, we get the following regression:
P(t) = 0.0011359121*t + 0.0023293474
with an r^2=0.7251946517, so it actually has a weaker correlation with this entry surgically removed (the 1994 percentage rather completely gone).

Using Ratios: JUST SAY NO&#33;

dP/dt>0 which tells us that as time goes on the ratio of property owned by financial corporations over investment abroad would increase.

This is actually an interesting problem though...because after a suitably long period of time banks would account for over 100% of the foreign investment&#33;

Now mind you, according to the regression that will be precisely 20 January 2719 at 8:48 AM and 19.3392 seconds :lol: :lol: :lol:

But it will happen, and that&#39;s bothersome...what it means is that I&#39;ll have to think of some way to have a regression with the result being between 0 and 1. It&#39;s a PERCENT after all, a portion of the total over the total&#33;

One glaringly obvious approach is to use the proportion z-test since we are using proportions&#33;

Perhaps it is my use of the property of the financial corporations since I could not easily find the capital of financial corporations? I will be looking for a replacement statistic for that.

I&#39;ll have to recalculate the U&#036;&#39;s data with this test too in order to be fair. The regression has a similar problem except it is that U&#036; banks will apparently contribute a negative amount to the foreign investment :lol:

[edit: NEW RESULTS&#33; Theory Falsified&#33;]

Approach

Lenin thought that the fusion of bank capital and industry capital would give rise to a new "finance capital" in imperialist societies.

We test this by looking at the difference between the foreign investment of a given imperialist nation and the investment by banks. If the difference is zero, then 100% of the investment abroad is from banks. This seems a little cartoonish, so we notionally change this to be 50%.

Our null hypothesis is then: .5*f(t) - b(t) = 0.

For the observed foreign investment of the nation f(t) and the observed bank investment b(t) of the same nation.

Our alternative hypothesis is: .5*f(t) - b(t) > 0.

That is, that the amount of foreign investment supposedly done by banking capital is done instead by something else.

How we approach this rather simple. First recall from calculus that the average of a function over a range 1 to T is

(1/(T-1))&#092;integral^{T}_{1} f(t)dt = avg(f(t))

So we simply do the same for our hypothesis, changing integrals to sums since this is a discrete number of data entries:

(1/18)* SUM^{19}_{i=1} .5*f(i)-b(i) = avg(difference in investment and banks) = X

We use this for t-testing:

Null hypothesis: X = 0
Alternative hypothesis: X>0

By virtue of this method of testing, we can give an actual probability of Lenin being right.

The United Kingdom

Well, we find X:

X = (1/18)*(2033156) = 112953.111

and the standard deviation is:

s = 49530.2703

Now, we find X/s = 2.280486467, and in order to get the probability of the hypothesis being correct we find the probability cumulative distribution from -infinity to -2.280486467 (because we need to move 2.280486467 standard deviations to the left of the median to get to the tested median).

We find that the probability cdf gives us 1.71474579%; that means that, with 98.28525421% confidence, we reject the null hypothesis in favor of the alternative.

The United States

Now we do the same thing,

X = (1/13)(16265799.8) = 1251215.369

and the standard deviation is:

s = 522678.1657

We find X/s=2.39385427, use the normal cdf to find that the value to be 0.83361769%, which means with 99.16638231% confidence we can reject the null hypothesis in favor of the alternative.

Conclusion So Far

So far things don&#39;t look too good for dear Lenin and his theory of imperialism. The only observable prediction he made is supported less than 2% of the time with statistical data, and even then it could be chalked up to statistical anamolies.

Frankly, if we were scientists, this would be good grounds to dismiss his theory of imperialism which also entails dismissing his theory of the vanguard.

I will be looking for Japanese data and German data for more testing, but in the United States, perhaps the most reknown imperialist country present, Lenin&#39;s theory is supported with less than 1% of the statistical data present.

Just with these two countries alone, Lenin&#39;s theory of imperialism has been falsified.

If we increase the amount that the banks are supposed to play a role in the foreign investment, things get worse. But I got bored so I wrote a program to see how far we can go until things appear to support Lenin&#39;s theory of imperialism.

Well it got to see if the banks could be attributed to 5% of the total foreign investment (only 1 tenth of what we originally began with&#33;) and lo and behold: we can still reject Lenin&#39;s theory with 91.01385341% confidence&#33;

I will however do more testing with "speculative" capital and foreign investment to see if the Leninists&#39; new theory of imperialism is worth its weight in paper and megabytes but my hypothesis is it&#39;s just as useless as Lenin&#39;s "Theory of Imperialism: Classic".

[Die Neue Zeit]

Do you really understand what stats you&#39;re doing? Nowhere in Lenin&#39;s pamphlet did he make correlation between total investment and just foreign investment (that borders more along the third criterium of capital exports). In fact, he used entirely different statistical criteria: financial control over national capital. That&#39;s the basis for speculative capital.

Capital and Empire: An Interview with John Bellamy Foster (http://www.monthlyreview.org/mrzine/aguiar230307.html)
The limits of banking capital in organising industrial production (http://www.soas.ac.uk/SED/Issue2-1/bassam4.html)

Against the Grain - Was Lenin Defective? (http://www.politicalaffairs.net/article/view/197/1/76/)

That&#39;s just trying to disprove Lenin&#39;s fifth criterium by pointing out the obvious colonialism example that he used. The second criterium (HILFERDING&#39;s finance capital) is really all about a shift in control over capital away from industrial capitalists.

From a Maoist website (DISCLAIMER: I&#39;m by far NOT a Maoist):

Intermeshing and contention of imperialist capitals: international integration of finance capital (http://www.etext.org/Politics/MIM/mt/imp97/imp97c1.html)


There are those who would claim to follow Marx and not Lenin that say that Lenin was wrong about finance capital being the dominant sector of imperialism. These anti-Leninists are wrong, because no industrial capitalist can avoid the competition engendered by banking capital&#39;s activities, and because as Poulantzas points out, it is wrong to separate industrial and banking capital. The only exceptions are those commodity-producing capitalists about to go out of business. For that matter, the CEOs and treasurers of industrial corporations have increasingly taken on direct functions of banking capital and not industrial capital. Marston shows how IBM actually pioneered the exchange rate swap future by which fluctuations in exchange rates are eliminated in cross-country operations. Other companies are known for buying companies not because they have anything to do with their own line of business, but simply because they are profitable. Moreover, Marston has shown that industrial corporations internationally float their own bonds increasingly based on their future profit flows, so industrial capital is thus converted to liquid forms of finance capital. Bankers who refuse to assist with the creation of liquidity for industrial capital simply lose the business to other bankers. Bankers think like treasurers and treasurers think like bankers to such a degree it is meaningless to draw the distinction, except in Japan where the government has consciously empowered the industrial capital side of finance capital. This should be thought of as a faction of finance capital&#39;s thinking on competition. Other finance capitalists also compete for market share, just by less conscious design.

The United &#036;tates is especially oriented toward finance capital, relative to industrial capital. Citing Dean Baker of the Economic Policy Institute, William Greider also shows that industrial capital in the United &#036;tates has increasingly lost its power to finance capital. "The retained earnings that corporations traditionally held for future capital investments had declined drastically as a percentage of profits since the 1970s. Corporate profits were 34 percent of corporate debt in 1960; by 1990, profits were only 15 percent of debt. In that sense, the corporate managers had lost real power--the power to make capital decisions on their own, independent of the discipline from financial markets." When in July, 1984 ITT announced "it was cutting its dividend by nearly two-thirds so that it could afford heavy investments in the U.S. telecommunications business, the stock price dropped by roughly a third in one day, making ITT a prime takeover target." Numerous CEOs have been fired for similar reasons. The average return to bondholders is now in the 8 percent range, which is five times the average for the century according to Greider, and despite this in the last several years central bankers everywhere are doing what they can to make credit tight and expensive. In fact, if it were not for interest payments to bond-holders, the U.&#036;. government would be running a budget surplus of &#036;100 billion in 1996. This also means that central bankers are deliberately causing budget deficits as a political means of forcing savings, putting pressure on the welfare state and stimulating the spirits of bond-holders. MIM agrees with Greider that we do not care about the budget deficits. Let the bondholders not be paid. That would be a redistribution of wealth. Cutting interest rates and taxing the return on bonds is an example of a progressive reform, but capitalism might not be able to sustain it, because there might not be enough reason within the system for saving or investment to occur. On the other hand, to continue to pay the bondholders is to choke the economy. The power of bond-holders today could be no greater vindication of Lenin&#39;s theory of imperialism as the highest stage of capitalism and dominated by finance capital.

From my knowledge on securities, the value and volume of bonds being traded everyday FAR EXCEEDS those of stocks being traded.

[ComradeRed]

Originally posted by [email protected] 06, 2007 12:59 pm
Do you really understand what stats you&#39;re doing? Nowhere in Lenin&#39;s pamphlet did he make correlation between total investment and just foreign investment (that borders more along the third criterium). In fact, he used entirely different statistical criteria: financial control over national capital. That&#39;s the basis for speculative capital.
My lack of sleep is getting to me, so you are saying that I just tested speculative capital?

OK, supposing I didn&#39;t test for finance control over industry capital, how do you propose that I test for this? It isn&#39;t my theory I&#39;m putting forward, so I don&#39;t think I should be responsible for spending a great deal of time trying to figure out how to test it.



That&#39;s just trying to disprove Lenin&#39;s fifth criterium by pointing out the obvious colonialism example that he used. The second criterium (HILFERDING&#39;s finance capital) is really all about a shift in control over capital away from industrial capitalists. OK, now how would you test Lenin&#39;s second criteria? :huh:

[Die Neue Zeit]

^^^ Sleep a lot more, damn it&#33; ;) [Really, you&#39;ll need it for what I&#39;m about to say.]

Out of all the criteria, the second criterium is the most complex of them all to test, given the multiplicity, and given its origins in Hilferding&#39;s work Finance Capital. :( For the purposes of the discussion, I&#39;ll limit you to the U&#036;, and I can wait while you go about with your physics research for the time being. ;)

1) You already tested one: centralization of banks (indirectly linked to the first table in Chapter 2, which deals with deposits in banks and % in regards to small vs. big banks). :)

2) The Maoist link tested PART of another, while referring to a certain "Economic Policy Institute." Wikipedia (http://en.wikipedia.org/wiki/Financial_ratio) provides more, particularly the leverage ratios. Of course, there are websites out there with overall year-to-year comparative data on the "average" company&#39;s leverage (http://en.wikipedia.org/wiki/Financial_leverage) ratios.

EDIT: HOWEVER, I NEED YOUR HELP HERE&#33; The ratio data elaborating upon what was stated on the Maoist website MAY be skewed as a result of concentration (the bigger companies tend to invest less relative to smaller companies, and they aren&#39;t as profitable).

3) Since Big Banks are consolidated companies themselves, are each of the 7,402 banks that you cited as of December 31, 2006 independent? For all we know, many there could be subsidiaries (whether 1st degree, 3rd degree, etc.) of the bigger banks. Furthermore, even if they are independent, how much higher are the number of independent banks and their subsidiaries? [This is the second table in Chapter 2.]

For example, JPMorgan Chase (http://en.wikipedia.org/wiki/JPMorgan_Chase#Banking_Subsidiaries) has five subsidiaries, including Pier 1 National Bank. How are those legal entities counted towards 7,402: 1 (the consolidated entity), 5 (just the banking subsidiaries), or 6 (the consolidated entity plus the banking subsidiaries)?

[Incidentally, here in Canada there is great debate in terms of the stalled merger plans for our Big Five, which would create sufficient economy of scale to compete internationally. Even the Royal Bank of Canada by itself isn&#39;t big enough.]



4) As a general note, you might want to do more research on the general proliferation of consolidated companies in the U&#036; (not just the banks as mentioned above), because Lenin talked about a case of accounting fraud not unlike Enron in Chapter 3.

5) Now, in regards to speculative capital, Lenin actually said the word explicitly in Chapter 3, with a table providing data OF HIS DAY. The proliferation of speculation is the fifth aspect for statistical testing.



PLEASE CORRECT ME IF MY APPROACH IS WRONG.

[ComradeRed]

Well, a remark first on what exactly I analyzed.

I analyzed something proportional to the variance of the difference between the expected and actual values of investment for finance capital (Let v=variance of the investment of finance capital := (1/N)*&#092;sum (x_{i} - &#092;bar{x})^2 for the i-th piece of data x_{i} and the mean &#092;bar{x}, for N pieces of data. I tested for &#092;sum (&#092;bar{x} - x_{i}) and found out that it is statistically significantly away from zero...something like 98% of the data indicates that it is away from zero implying that bank capital is not investing the amount it is supposed to. I can test if &#092;sum (x_{i} - &#092;bar{x})^2 is close to zero, but I guess that it isn&#39;t).

Now on to your suggestions for testing Lenin&#39;s unique prediction for imperialism...

I am assuming of course that the other four predictions that Marx made are correct by simply looking at the various statistics...a periodic growth of the labor force, corresponding rises and dips in real GDP, etc. etc. etc. I will not (at least right now) test Marx&#39;s law of accumulation (I plan to do that over the summer, provide fresh evidence for Marx&#39;s Das Kapital :)).


2) The Maoist link tested PART of another, while referring to a certain "Economic Policy Institute." Wikipedia provides more, particularly the leverage ratios. Of course, there are websites out there with overall year-to-year comparative data on the "average" company&#39;s leverage ratios. I have no clue what the hell you&#39;re talking about, could you please elaborate a little more?


3) Since Big Banks are consolidated companies themselves, are each of the 7,402 banks that you cited as of December 31, 2006 independent? For all we know, many there could be subsidiaries (whether 1st degree, 3rd degree, etc.) of the bigger banks. Furthermore, even if they are independent, how much higher are the number of independent banks and their subsidiaries? I&#39;ll look into this though I don&#39;t see its relevance to the existence of finance capital and the financial oligarchy.


4) As a general note, you might want to do more research on the general proliferation of consolidated companies in the U&#036; (not just the banks as mentioned above), because Lenin talked about a case of accounting fraud not unlike Enron in Chapter 3.

5) Now, in regards to speculative capital, Lenin actually said the word explicitly in Chapter 3, with a table providing data OF HIS DAY. The proliferation of speculation is the fifth aspect for statistical testing. So, not to be rude but just reword what you have just stated, go to Lenin&#39;s imperialism and look at the data he "tests" (admit it: it really wasn&#39;t tests&#33;) and try to reproduce it?

After looking at the data in chapter 3 of Imperialism, it&#39;s not really all that convincing of the existence of finance capital.

I mean just from the definition Lenin quotes from Hilferdin is most unsatisfactory a definition&#33;
Originally posted by Lenin&#39;s definition quote
"A steadily increasing proportion of capital in industry," writes Hilferding, "ceases to belong to the industrialists who employ it. They obtain the use of it only through the medium of the banks which, in relation to them, represent the owners of the capital. On the other hand, the bank is forced to sink an increasing share of its funds in industry. Thus, to an ever greater degree the banker is being transformed into an industrial capitalist. This bank capital, i.e., capital in money form, which is thus actually transformed into industrial capital, I call ‘finance capital’." "Finance capital is capital controlled by banks and employed by industrialists."--emphasis added

Wouldn&#39;t the test that is directly proportional to the variance of the expected investment of finance capital minus the observed be damning evidence enough? Admittedly, it was not the variance (that I shall calculate after this post), but still it is damning evidence&#33;

Perhaps I should ask: what noticeable difference does this financial oligarchy make? How do you distinguish finance capital from bank capital? What set of indicators could indicate the existence of finance capital? :huh:

[edit: Calculation of the variance, and the null hypothesis that the variance is close to zero]

OK, so we have our data (I am rounding the data, they are in millions):
In 1992: &#036;12,720 in foreign and domestic equity securities, &#036;502,100 invested abroad
In 1993: &#036;15,499 in foreign and domestic equity securities, &#036;564,300 invested abroad
In 1994: &#036;15,571 in foreign and domestic equity securities, &#036;612,900 invested abroad
In 1995: &#036;18,521 in foreign and domestic equity securities, &#036;699,000 invested abroad
In 1996: &#036;21,988 in foreign and domestic equity securities, &#036;795,200 invested abroad
In 1997: &#036;25,662 in foreign and domestic equity securities, &#036;871,300 invested abroad
In 1998: &#036;32,223 in foreign and domestic equity securities, &#036;1,000,700 invested abroad
In 1999: &#036;37,262 in foreign and domestic equity securities, &#036;1,216,000 invested abroad
In 2000: &#036;41,249 in foreign and domestic equity securities, &#036;1,316,200 invested abroad
In 2001: &#036;20,724 in foreign and domestic equity securities, &#036;1,460,400 invested abroad
In 2002: &#036;22,530 in foreign and domestic equity securities, &#036;1,616,500 invested abroad
In 2003: &#036;16,479 in foreign and domestic equity securities, &#036;1,769,600 invested abroad
In 2004: &#036;15,477 in foreign and domestic equity securities, &#036;2,051,200 invested abroad
In 2005: &#036;13,502 in foreign and domestic equity securities, &#036;2,070,000 invested abroad

The variance is defined as:
v = (1/N)*&#092;SUM (x_{i} - &#092;bar{x})^2
Iff each of the entries are equally weighted. Here however we take to be the mean 50% of the i-th invested abroad, and the weight to be F_{i}/2:
v = &#092;SUM (2/F_{i})*(B_{i} - .5*F_{i})^2
for the actual bank investment for the i-th year after 1991 B_{i}, and the actual invested abroad for the i-th year after 1991 F_{i}.

The null hypothesis is:
v = 0
The alternative hypothesis is:
v>0

Well, we find that the variance we have is:
v = 7713642.109
and a mean of the variance of:
&#092;bar{V} = 550974.4364
and a standard error of:
s = 269386.3777
so we have a t-score of:
t = (7713642.109 - 0) / (269386.3777/sqrt(14)) = 7.655632593
which means we have a p-value of:
P = 1.8039377*10^-6
which means, there is staggeringly significant evidence (99.99981961%&#33;) that we can reject the null hypothesis and accept the alternative.

I then changed the amount that banks are expected to play a role down to 10% of the foreign investment. I won&#39;t show all my tedious calculations as it would interest no one but myself, but the P-value there was 5.4893409*10^-5, which means we can still reject the null hypothesis in favor of the alternative with 99.99451059% statistical significance.

I then decided to try 3%. The p-value was 0.148023516, and we have the statistical significance at 98.51976484%.

Then I stopped because this was taking up too much of my time. It&#39;s statistically insignificant the contribution to investment that banks contribute. That&#39;s the only real observable prediction, and even at 3% of the total foreign investment alone it didn&#39;t even contribute 3% (if it did, it&#39;s variance would be close to zero, and the null hypothesis would not have been rejected - which means that Hilferding&#39;s "finance capital" would be an accurate description of reality; however, the variance is not close to zero, and the null hypothesis was rejected, which means Hilferding&#39;s theory is not an accurate description of reality).

I&#39;ll try your approach to this, although it doesn&#39;t seem to test the idea of finance capital at all, but Lenin&#39;s theory of imperialism seems pretty falsified to me.

[Edit again]

Actually, if you take the data, and let x>0 be a variable, the variance is defined then as:
v= &#092;sum (x/F(n))*(B(n) - F(n)/x)^2
after doing some calculations we can rearrange this as:
v = x*&#092;sum B(n)^2 /F(n) - 2 &#092;sum B(n)F(n) + (1/x)*&#092;sum F(n)
and then we get the following:
v = 7.378.054577*x + (7.32503*10^11) + 16635400/x
if we notionally are looking for v=0, then we can multiply this through by x and find the quadratic equation:
v = 0 = 7.378.054577*x^2 + x*(7.32503*10^11) + 16635400
solving for it we get the solutions:
1) -2.23636188*10^-5
2) -99281320.35

I would suspect that since these are solutions for X(&#33;) as the inverse of the fraction that it indicates that the bank capital IS NOT a significant part of the foreign investment capital (it has to be a negative fraction of the foreign investment&#33; That&#39;s a serious problem&#33;).

(By the by the "real" fractions are if you a third observer is too lazy to calculate them out:
1) -44715.48228
2) -1.00723882 * 10^-8
or if you prefer percents:
1) -4471548.228%
2) -0.000000000100723882%
respectively.)

Who knew that you could avoid all this statistics with simple algebra? :lol:

[Die Neue Zeit]

Originally posted by ComradeRed+May 07, 2007 06:16 pm--> (ComradeRed &#064; May 07, 2007 06:16 pm)
2) The Maoist link tested PART of another, while referring to a certain "Economic Policy Institute." Wikipedia provides more, particularly the leverage ratios. Of course, there are websites out there with overall year-to-year comparative data on the "average" company&#39;s leverage ratios. I have no clue what the hell you&#39;re talking about, could you please elaborate a little more? [/b]

Sorry for using finance jargon, but to put in into layman&#39;s terms, financial leverage = debt. The PERTINENT leverage ratios in the wiki article all have to do with LONG-term debt (debts outstanding for over a year, like bonds payable) as either a numerator or a denominator (with the exception of "interest coverage": net income / interest expense).

What that Maoist site talked about are two not-so-much-used financial ratios:


Originally posted by Site+--> (Site)The retained earnings that corporations traditionally held for future capital investments had declined drastically as a percentage of profits since the 1970s.[/b]

The first part here refers to appropriated retained earnings (http://www.answers.com/topic/appropriated-retained-earnings) (per accounting standards) divided by net income.

Appropriated retained earnings
------------------------------------
Net income

The less appropriated retained earnings, the more retained earnings are used for other purposes (dividend payments, OR DEBT-COVENANT RESTRICTIONS ON R/E BY OUTSIDE PARTIES, preventing dividend payments).


[email protected]
Corporate profits were 34 percent of corporate debt in 1960; by 1990, profits were only 15 percent of debt. In that sense, the corporate managers had lost real power--the power to make capital decisions on their own, independent of the discipline from financial markets.

Net income
-----------------------------------------------------------------------------------
Long-term liabilities (bonds payable being the most notable form of LTD)



HOWEVER, I NEED YOUR HELP HERE&#33; The ratio data elaborating upon what was stated on the Maoist website MAY be skewed as a result of concentration (the bigger companies tend to invest less relative to smaller companies, and they aren&#39;t as profitable).


You
I&#39;ll look into this though I don&#39;t see its relevance to the existence of finance capital and the financial oligarchy.

Actually, that IS relevant, ESPECIALLY to the latter (financial oligarchy). I doubt all those 7,402 listed banks are independent (at least half, IMO, are subsidiaries).


So, not to be rude but just reword what you have just stated, go to Lenin&#39;s imperialism and look at the data he "tests" (admit it: it really wasn&#39;t tests&#33;) and try to reproduce it?

Well obviously not using the EXACT data of back then, no&#33;

Just today, for example, NY-based Alcoa made a "hostile" takeover bid to RETAKE Alcan (http://en.wikipedia.org/wiki/Alcan) (after the split in 1928 ;) ) in order to have a stranglehold on the aluminum industry.

I suppose they aren&#39;t "tests" because they&#39;re just raw data, and no regression predictions or whatever other statistical analyses are made. ;)


I&#39;ll try your approach to this, although it doesn&#39;t seem to test the idea of finance capital at all, but Lenin&#39;s theory of imperialism seems pretty falsified to me.

Read up on the ratios, gather the data, do the NON-STATISTICAL calculations first (it&#39;s easy to calculate financial ratios ;) ), and THEN do the regression/variance/etc. calculations. ;)

Then there are the consolidations, but that&#39;s Part 2 (more business and/or economics research but LESS statistical calculations). :D

[ComradeRed]

Semantically speaking, I think I just said "no" in the thread. It&#39;s not just "foreign" investment, as I said. I think you&#39;re confusing Lenin&#39;s second criterium (the plain emergence of finance capital) with his third (export of such finance capital).

How did you come up with the conclusion of considering just "foreign," when almost all Leninist and even "pure Marxist" sites out there consider the proliferation of bank capital everywhere (including the domestic economy)? :huh: Well, look, it requires a negative fraction for the variance of only the foreign investment alone to be zero...would adding domestic investment help it any? No, as a matter of fact it weakens the Imperialist theory&#39;s validity.

If it cannot even take into account a positive fraction of the foreign investment alone, adding more to it won&#39;t help.

I admit that I knowingly looked at half of the data that was predicted for Lenin&#39;s theory of value (only the foreign investment as opposed to foreign and domestic investment). However, since it isn&#39;t even supportable with the foreign investment alone, adding more to it (the contribution of domestic investment) would not help one bit.

But since I don&#39;t have a mathematical proof to show this, I&#39;ll have to get the statistics on the domestic investment of American companies by "America".

Brief Aside on the statistics if we include Gross Domestic Investment component of U&#036; Real GDP

So from the National Bureau of Economic Analysis (http://www.bea.gov/national/nipaweb/Index.asp) we find the Gross Domestic Investment to be:
In 1992: &#036;864,800 Mn
In 1993: &#036;953,400 Mn
In 1994: &#036;1,097,100 Mn
In 1995: &#036;1,144,000 Mn
In 1996: &#036;1,240,300 Mn
In 1997: &#036;1,389,800 Mn
In 1998: &#036;1,509,100 Mn
In 1999: &#036;1,625,700 Mn
In 2000: &#036;1,735,500 Mn
In 2001: &#036;1,614,300 Mn
In 2002: &#036;1,582,100 Mn
In 2003: &#036;1,664,100 Mn
In 2004: &#036;1,888,000 Mn
In 2005: &#036;2,057,400 Mn
So add this to the foreign investment and we get the total investment:
In 1992: &#036;1,366,900 Mn
In 1993: &#036;1,607,700 Mn
In 1994: &#036;1,710,000 Mn
In 1995: &#036;1,843,000 Mn
In 1996: &#036;2,035,500 Mn
In 1997: &#036;2,261,100 Mn
In 1998: &#036;2,509,800 Mn
In 1999: &#036;2,841,700 Mn
In 2000: &#036;3,051,700 Mn
In 2001: &#036;3,074,700 Mn
In 2002: &#036;3,198,600 Mn
In 2003: &#036;3,433,700 Mn
In 2004: &#036;3,939,200 Mn
In 2005: &#036;4,127,400 Mn

So now, we simply do the quadratic approach again except we use this new total investment T(x) instead of foreign investment:
v = 0 = x*&#092;sum B(n)^2 /T(n) - 2 &#092;sum B(n)T(n) + (1/x)*&#092;sum T(n)
so we then multiply both sides by x:
0 = x^2 &#092;sum B(n)^2 /T(n) - 2x &#092;sum B(n)T(n) + &#092;sum T(n)
and for the following sums we have:
&#092;sum B(n)^2 /T(n) = 3066.766285
2&#092;sum B(n)T(n) = 1.6551*10^12
&#092;sum T(n) = 37001000

So we have our quadratic equation:
3066.766285 x^2 - 1.6551*10^12 x + 37001000 = 0

We plug it into the quadratic equation and it turns out that the the b value (the term involving 10^12) is so large that the discriminant is (according to every computational tool at my disposal) rounded to b. So we have x=0 and x=-539688990.4, and since the fraction is the inverse of x we get: infinity and -1.85291903*10^-9 respectively.

We can throw out infinity as a solution and accept the other, negative one. That&#39;s the decimal of the role of banks in foreign and domestic investment. If you prefer a percent, it is: -0.000000185291903%. Adding domestic investment didn&#39;t really change all that much.

Legitimacy of Lenin&#39;s Theory of Imperialism as a Theory

As for going through the centralization of the banks, etc. That is not explicable through Lenin&#39;s theory of imperialism alone.

Actually, come to think of it, it&#39;s little more than a baseless assertion that Lenin makes. It&#39;s not really coherently weaved into Lenin&#39;s theory, it just seems placed there for no apparent reason.

What I mean is that Lenin says point blank "The merging of bank capital and industry capital gives rise to finance capital"...as opposed to saying "This is the theory of imperialism...and here are a set of consequences why we should give a damn."

Lenin&#39;s theory seems little more than a collection of "These things will happen" but he does not explain why satisfactorily.

There really isn&#39;t a legitimate theory of imperialism that Lenin has...just an assortment of semi-observable predictions. By a legitimate theory I mean a theory that gives rise to the semi-observable predictions as a logical conclusion.

Just my ramblings about how upset I am with Lenin&#39;s theory as a scientist ;)

[Die Neue Zeit]

Originally posted by [email protected] 09, 2007 02:47 am
What I mean is that Lenin says point blank "The merging of bank capital and industry capital gives rise to finance capital"...as opposed to saying "This is the theory of imperialism...and here are a set of consequences why we should give a damn."

Lenin&#39;s theory seems little more than a collection of "These things will happen" but he does not explain why satisfactorily.

There really isn&#39;t a legitimate theory of imperialism that Lenin has...just an assortment of semi-observable predictions. By a legitimate theory I mean a theory that gives rise to the semi-observable predictions as a logical conclusion.

Just my ramblings about how upset I am with Lenin&#39;s theory as a scientist ;)
What do you expect from a "popular outline" as brief as the Manifesto of the Communist Party? :D

[Which also means "show me the money" in regards to Das Kapital stuff for capital exports, international monopoly, and political division ;) Using your logic processes, if the Manifesto were the Marx&#39;s only basis of #3, 4, and 5, then those criteria are merely "semi-observable predictions," too. :P ]

[ComradeRed]

Originally posted by [email protected] 08, 2007 07:08 pm
What do you expect from a "popular outline" as brief as the Manifesto of the Communist Party? :D

[Which also means "show me the money" in regards to Das Kapital stuff for capital exports, international monopoly, and political division ;) Using your logic processes, if the Manifesto were the Marx&#39;s only basis of #3, 4, and 5, then those criteria are merely "semi-observable predictions," too. :P ]
There is a difference though. There is an underlying theory that Marx and Engels derive from, and get a number of observable predictions.

Lenin on the other hand delivers onto us a number of predictions without a really coherent explanation or derivation from an underlying theory.

It makes sense that from the class antagonisms and the role of the bourgeoisie to expand capital that there would be a world market. Asserting, on the other hand, "In capitalism, there will be a world market" is meaningless.

Lenin does the latter, Marx and Engels do the former. The former is good, the latter is bad.

Oddly enough, in some slim tome, Marx and Engels still manage to do it while Lenin cannot <_<

[Die Neue Zeit]

^^^ You might want to read this 2005 Trotskyist article (http://www.permanentrevolution.net/?view=entry&entry=317).


The article considers which of these features became more pronounced during the 20th century and which proved of less significance.

...

"The boom at the end of the nineteenth century and the crisis of 1900-03. Cartels become one of the foundations of the whole of economic life. Capitalism has been transformed into imperialism." (Imperialism: the highest stage of capitalism, p202)

Without any doubt, the boom at the end of the twentieth century and the crisis of 2000-2003 has revealed that cartels and monopolies remain central to imperialism and its crises. The feverish and unprecedented wave of mergers and acquisitions in the 1990s created ever more gigantic monopolies in old and new sectors of production and the service industry.

By the 21st century 300 largest corporations account for one-quarter of the world&#39;s productive assets. Five firms control more than 50 percent of the global market in consumer durables, steel aerospace, electronic components, oil, PCs, media, airline and auto-industries.

In the USA two or three corporations control 90 percent of the market in computer software and hardware, airline and aerospace.

Lenin&#39;s central observation that imperialism is the monopoly stage of capitalism has been vindicated, as has his view that this domination has not led to an easing of capitalist crises but rather an intensification of them.

But Lenin&#39;s Imperialism: The Highest Stage of Capitalism contained more than this central observation. It was written a popular synthesis of the three strands of thought on the subject that had emerged in the previous 15 years. It combines the British liberal economist Hobson&#39;s view of the "parasitism" of the metropolitan countries (and hence the basis for the concept of a labour aristocracy and opportunism) with Hilferding&#39;s analysis of finance capital.

Lenin took from Rosa Luxemburg (and Nikolai Bukharin) their central focus on the division of the world by monopolies and imperialist powers, the notion of imperialism as a stage and not simply a policy and hence the inevitability of imperialist crisis, war and proletarian revolution.

Lenin did not originate any new concepts in his pamphlet but by his own admission he presents a "composite picture".

Isn&#39;t that the same thing you said regarding Marx and his theoretical combinations (Scottish and German philosophy, classical political economy, French socialism)?

Also, if there&#39;s one thing I&#39;ve gotta say again, it&#39;s that Marx didn&#39;t really care about #3, 4, or 5 very much, given his focus on LTV and accumulation. It was up to "Red" Rosa and the "Golden Boy" to THEORIZE these features. Granted, even Lenin&#39;s finance capital stuff wasn&#39;t original, but:


Nevertheless, this does not mean it is just a summary of other people&#39;s positions. He infuses it all with his own dialectical view of the crisis-ridden nature of the evolution of capitalism (i.e. "moribund" and in transition to socialism) and removes all traces of Hilferding&#39;s developing reformism in relation to the taking over of the state and using it to build socialism.

But it was his keen sense of the uneven development of imperialist states, monopolies, finance capital and capital exports that allowed Lenin to at once understand the dynamic of conflict between states and finance capital that stood behind them, as well as avoiding all schematic generalisations about the future based on only one or another aspect or form of development of imperialism.

For this very reason one can usually detect in his evaluations and descriptions the germ of future development that was to become dominant but which at the time of writing was secondary and underdeveloped.

For Lenin the "composite picture" is meant to suggest the essential, defining elements of the stage but which may be strongly or weakly developed in one or other nation at the time of writing but which represented their future destiny...

But then monopolies, however powerful, had only extended their reach over their own country. Multinationals - firms operating in several or all of the big global markets and trying to monopolise them - were not the norm.

Ford - one of the earliest to expand abroad - was established in 1900 built its first overseas plant in Canada the next year. But when Lenin wrote his work none of the big monopolies were dependent on overseas markets for the bulk of their sales then nor did they have to have global ambitions to survive the competition.

Today that is no longer true. Today a number of the biggest players, such as IBM and ICI, rely for over half of their revenue on foreign sales. More than 98% of Nestlé&#39;s sales are outside Switzerland.

All firms in mass consumer or production goods have to have global presence. Even those operating in niche markets find they must have global ambitions or risk losing out.

That last bit above is very relevant to the subject matter of this thread. :D

Here&#39;s more:


In point four of his composite picture he does say that imperialism is characterised by:

"the formation of international monopolist capitalist associations which share the world among themselves".

It could be argued that this anticipates the growth of MNCs in the 20th century; however, his treatment of capital export (chapter 4) and the division of the world among economic trusts (chapter 5) are separated out completely because for Lenin capital export is only banking capital and not the export of industrial capital. As a result the subject matter of chapter 5 can only be about dominance of foreign markets by commodity exports. This is not the same as the spread of foreign direct investment in the form of new plant and machinery so typical of the post-second world war period.

Not even Marx could have foreseen the export of industrial capital, still independent of bank capital&#33; Remember this link (http://www.soas.ac.uk/SED/Issue2-1/bassam4.html) I posted awhile back?

Here&#39;s where your contentions on finance capital come in, I guess:


We can see a similar limitation in Lenin&#39;s understanding of imperialism when he notes in the second part of his composite picture that imperialism is also about "the merging of bank capital with industrial capital, and the creation, on the basis of this &#39;finance capital&#39;, of a financial oligarchy;"

At the time this view was criticised for being based too narrowly on the experience of Germany (and hence on Hilferding&#39;s work). This fusion was much more underdeveloped in France or the USA for example. But just as importantly, at the heart of the concept of finance capital lay the idea that it was essentially loan capital (e.g. French loans to Russia to finance its capitalist development). This is a very narrow concept of capital but one that corresponds to the historical underdevelopment of international capital at the time.

On the export of capital:


But again we have to note a certain onesidedness in Lenin&#39;s account of this process in the late 19th and early 20th century; For example, he says:

"Notwithstanding the absolute increase in industrial output and the export of manufactured goods, there is an increase in the relative importance of income from interest and dividends."

Again, it flows from Lenin&#39;s concept of finance capital as essentially loan/banking capital that investment income is conceived entirely as income from "interest and dividends" and hence "speculation" and the source of "parasitism." But as the last century wore on it was more and more the case that income from abroad was profits repatriated from fixed assets operated by MNCs in other countries.

Conclusion (and here&#39;s where Sweezy comes in):


Any contemporary problems with the structure of Lenin&#39;s "composite picture" lie largely with the relative underdevelopment of imperialist capital 100 years ago.

But there remain other problems with the dynamics of Lenin&#39;s model, the tendencies towards crises etc.

Lenin&#39;s problem was that he relied on Hobson for a theory of capitalist crisis: stagnation induced by lack of investment, which he supplemented partially by adding a theory of disproportionality which derives capitalist crises from the uneven distribution of capital investments between industries and between countries.

He never integrated an understanding of the role of the tendency of the rate of profit to fall in the generalised overaccumulation of capital into his theory of crisis.

Hence his link between monopoly and imperialism, but the continued absence of a link between monopoly and accumulation :(



From an aforementioned link: Against the Grain - Was Lenin Defective? (http://www.politicalaffairs.net/article/view/197/1/76/)


It is true that Lenin could not foresee the specific historical development that has resulted in "neoliberal" globalization dominated by one "superpower." But it is also true that the theory laid out by Lenin in Imperialism: The Highest Stage of Capitalism remains the best starting point for any attempt to understand the contemporary world.

[ComradeRed]

Originally posted by [email protected] 09, 2007 05:00 pm
^^^ You might want to read this 2005 Trotskyist article (http://www.permanentrevolution.net/?view=entry&entry=317).
<snip>
Isn&#39;t that the same thing you said regarding Marx and his theoretical combinations (Scottish and German philosophy, classical political economy, French socialism)?
No, it&#39;s nothing at all like what I was talking about with regards to Marx.

Marx took a number of independent ideas that weren&#39;t really related whatsoever and combined them into a number of new theories. Remember my Einstein analogy?

Lenin on the other hand failed to do that.


Also, if there&#39;s one thing I&#39;ve gotta say again, it&#39;s that Marx didn&#39;t really care about #3, 4, or 5 very much, given his focus on LTV and accumulation. It was up to "Red" Rosa and the "Golden Boy" to THEORIZE these features. Well now, let&#39;s think about this assertion.

So before we go further, Marx "didn&#39;t really care" about Lenin&#39;s latter three "predictions". That&#39;s irrelevant to the fact that Marx did call them first.

It&#39;s as if one would say "Einstein didn&#39;t really care about Brownian motion...so he shouldn&#39;t get credit for discovering it."

Now you would probably say something along the lines of "Yes, well, that still doesn&#39;t change the fact that <insert slutty versions of revolutionaries&#39; names here> had to theorize these features."

Perhaps, but it wasn&#39;t like Dirac&#39;s relation to path integral quantization...it&#39;s not as though Marx said "Oh, this would be interesting to look into...".

Marx said explicitly those three "predictions".

(The reason I say "predictions" in quotations is because you predict things from a given theory. After looking through Lenin&#39;s work, there is no theory presented, only a grocery list of "predictions" and then it is somehow imperialism by means of magic.)


Granted, even Lenin&#39;s finance capital stuff wasn&#39;t original, but:


Nevertheless, this does not mean it is just a summary of other people&#39;s positions. He infuses it all with his own dialectical view of the crisis-ridden nature of the evolution of capitalism (i.e. "moribund" and in transition to socialism) and removes all traces of Hilferding&#39;s developing reformism in relation to the taking over of the state and using it to build socialism.

But it was his keen sense of the uneven development of imperialist states, monopolies, finance capital and capital exports that allowed Lenin to at once understand the dynamic of conflict between states and finance capital that stood behind them, as well as avoiding all schematic generalisations about the future based on only one or another aspect or form of development of imperialism.

For this very reason one can usually detect in his evaluations and descriptions the germ of future development that was to become dominant but which at the time of writing was secondary and underdeveloped.

For Lenin the "composite picture" is meant to suggest the essential, defining elements of the stage but which may be strongly or weakly developed in one or other nation at the time of writing but which represented their future destiny...

But then monopolies, however powerful, had only extended their reach over their own country. Multinationals - firms operating in several or all of the big global markets and trying to monopolise them - were not the norm.

Ford - one of the earliest to expand abroad - was established in 1900 built its first overseas plant in Canada the next year. But when Lenin wrote his work none of the big monopolies were dependent on overseas markets for the bulk of their sales then nor did they have to have global ambitions to survive the competition.

Today that is no longer true. Today a number of the biggest players, such as IBM and ICI, rely for over half of their revenue on foreign sales. More than 98% of Nestlé&#39;s sales are outside Switzerland.

All firms in mass consumer or production goods have to have global presence. Even those operating in niche markets find they must have global ambitions or risk losing out.

That last bit above is very relevant to the subject matter of this thread. :D The points raised would be good points if we completely ignore the works of Marx and Engels.

Especially if we ignore the times that Marx and Engels were living in (apparently the East and West indies companies are irrelevant?).

But since you would prefer direct quotations:

However, this creation of capital requires that one essential prerequisite be fulfilled: "For the conversion of his money into capital the owner of money must meet in the market with the free labourer, free in the double sense, that as a free man he can dispose of his labour-power as his own commodity, and that on the other hand he has no other commodity for sale, is short of everything necessary for the realisation of his labour-power." But this relation between the owners of money or of commodities on the one hand, and those who possess nothing beyond their own labour-power on the other, is not a natural relation, nor is it one that is common to all historical periods: "It is clearly the result of a past historical development, the product ... of the extinction of a whole series of older forms of social production." And in fact we first encounter this free labourer on a mass scale in history at the end of the fifteenth and the beginning of the sixteenth century, as a result of the dissolution of the feudal mode of production. With this, however, and with the bringing into being of world trade and the world market dating from the same epoch, the basis was established on which the mass of the existing movable wealth was necessarily more and more converted into capital, and the capitalist mode of production, aimed at the creation of surplus-value, necessarily became more and more exclusively the prevailing mode. The Anti-Durhing (http://www.marxists.org/archive/marx/works/1877/anti-duhring/ch19.htm), by Frederick Engels

French industry is more developed and the French bourgeoisie more revolutionary than that of the rest of the Continent. But was not the February Revolution aimed directly against the finance aristocracy? This fact proved that the industrial bourgeoisie did not rule France. The industrial bourgeoisie can rule only where modern industry shapes all property relations to suit itself, and industry can win this power only where it has conquered the world market, for national bounds are inadequate for its development. But French industry, to a great extent, maintains its command even of the national market only through a more or less modified system of prohibitive duties. While, therefore, the French proletariat, at the moment of a revolution, possesses in Paris actual power and influence which spur it on to a drive beyond its means, in the rest of France it is crowded into separate, scattered industrial centers, almost lost in the superior number of peasants and petty bourgeois. The struggle against capital in its developed, modern form — in its decisive aspect, the struggle of the industrial wage worker against the industrial bourgeois — is in France a partial phenomenon, which after the February days could so much the less supply the national content of the revolution, since the struggle against capital&#39;s secondary modes of exploitation, that of the peasant against usury and mortgages or of the petty bourgeois against the wholesale dealer, banker, and manufacturer — in a word, against bankruptcy — was still hidden in the general uprising against the finance aristocracy. --emphasis added

Class Struggles in France (http://www.marxists.org/archive/marx/works/subject/hist-mat/class-sf/ch01.htm) by Karl Marx

Whereas on the one hand the improvement of the means of transportation and communication brought about by the progress of capitalist production reduces the time of circulation of particular quantities of commodities, the same progress and the opportunities created by the development of transport and communication facilities make it imperative, conversely, to work for ever more remote markets, in a word — for the world-market. The mass of commodities in transit for distant places grows enormously, and with it therefore grows, both absolutely and relatively, that part of social capital which remains continually for long periods in the stage of commodity-capital, within the time of circulation. There is a simultaneous growth of that portion of social wealth which, instead of serving as direct means of production, is invested in means of transportation and communication and in the fixed and circulating capital required for their operation. Das Kapital, vol. II (http://www.marxists.org/archive/marx/works/1885-c2/ch14.htm) by Karl Marx

Within its process of circulation, in which industrial capital functions either as money or as commodities, the circuit of industrial capital, whether as money-capital or as commodity-capital, crosses the commodity circulation of the most diverse modes of social production, so far as they produce commodities. No matter whether commodities are the output of production based on slavery, of peasants (Chinese, Indian ryots). of communes (Dutch East Indies), of state enterprise ( such as existed in former epochs of Russian history on the basis of serfdom) or of half-savage hunting tribes, etc. — as commodities and money they come face to face with the money and commodities in which the industrial capital presents itself and enter as much into its circuit as into that of the surplus-value borne in the commodity-capital, provided the surplus-value is spent as revenue; hence they enter in both branches of circulation of commodity-capital, The character of the process of production from which they originate is immaterial. They function as commodities in the market, and as commodities they enter into the circuit of industrial capital as well as into the circulation of the surplus-value incorporated in it. It is therefore the universal character of the origin of the commodities, the existence of the market as world-market, which distinguishes the process of circulation of industrial capital. Das Kapital, vol. II (http://www.marxists.org/archive/marx/works/1885-c2/ch04.htm) by Karl Marx

So much for that whole "Marx couldn&#39;t ever know about the export of capital" argument <_<

[Die Neue Zeit]

Originally posted by ComradeRed+May 10, 2007 02:14 am--> (ComradeRed &#064; May 10, 2007 02:14 am)That&#39;s irrelevant to the fact that Marx did call them first.

...

Marx said explicitly those three "predictions". [/b]
Sorry for my lateness, but I don&#39;t see any direct predictions of multinational corporate monopolies in your Das Kapital quotes anymore than I do in the "popular outline." However, a closer link to today&#39;s phenomenon of such is found in the latter than in the former. :)


(The reason I say "predictions" in quotations is because you predict things from a given theory. After looking through Lenin&#39;s work, there is no theory presented, only a grocery list of "predictions" and then it is somehow imperialism by means of magic.)

Yes there is&#33;

"If it were necessary to give the briefest possible definition of imperialism we should have to say that imperialism is the monopoly stage of capitalism."


Especially if we ignore the times that Marx and Engels were living in (apparently the East and West indies companies are irrelevant?)

If you want to talk about historical context (and I just read your quotes extensively), then I reiterate from that Trotskyist site (and what those monopolies&#39; businesses were):


Originally posted by Site+--> (Site)As a result the subject matter of chapter 5 can only be about dominance of foreign markets by commodity exports. This is not the same as the spread of foreign direct investment in the form of new plant and machinery so typical of the post-second world war period.[/b]


Das [email protected]
Within its process of circulation, in which industrial capital functions either as money or as commodities, the circuit of industrial capital, whether as money-capital or as commodity-capital, crosses the commodity circulation of the most diverse modes of social production, so far as they produce commodities. No matter whether commodities are the output of production based on slavery, of peasants (Chinese, Indian ryots). of communes (Dutch East Indies), of state enterprise (such as existed in former epochs of Russian history on the basis of serfdom) or of half-savage hunting tribes, etc. — as commodities and money they come face to face with the money and commodities in which the industrial capital presents itself and enter as much into its circuit as into that of the surplus-value borne in the commodity-capital, provided the surplus-value is spent as revenue; hence they enter in both branches of circulation of commodity-capital, The character of the process of production from which they originate is immaterial. They function as commodities in the market, and as commodities they enter into the circuit of industrial capital as well as into the circulation of the surplus-value incorporated in it. It is therefore the universal character of the origin of the commodities, the existence of the market as world-market, which distinguishes the process of circulation of industrial capital.

Since you brought up the subject of Russian history, you might want to read up Marx&#39;s First Draft of Letter To Vera Zasulich as quoted in my Kautsky thread (now your comments on industrial farming would be greatly appreciated). He started to come around to an anti-diffusionist position from his earlier diffusionist position:

Evaluating Imperialism (http://www.columbia.edu/~lnp3/mydocs/Blaut/imperialism.htm)


Evaluating Imperialism
Willoughby argues that Lenin&#39;s theory is little more than "a succinct, synthetic popularization of the newly developed Marxian theory of imperialism (322). The main author of the latter theory, he says, was Hilferding, whose Finance Capital became "the consensus statement for most of the high priests of Marxism&#39;s &#39;golden age&#39;" (324). The principal error here comes in the fact that Willoughby reads Lenin only from the Imperialism pamphlet. As we noted above, this work was indeed a popularization, and was "a specifically economic analysis." Much of this economic analysis did indeed come from Hilferding, Hobson, and (prewar) Kautsky. But the originality, importance, of Lenin&#39;s work stems mostly from the fact that it gave a comprehensive analysis of imperialism as a total social system.

...

Marx and Engels were diffusionists. They believed, as did every thinker of their time, that capitalism and modernity were spreading out over the world. But unlike mainstream thinkers, they believed that this was the spread of a plague, not a blessing, and that capitalism was under siege at the center: the proletariat would overthrow it in Europe, then would march, victorious, to the gates of Peking and beyond, spreading socialism across the world. Socialist theorists of the Second International saw things somewhat differently. Either before the World War (Bernstein) or later (Kautsky, Hilferding, Bauer), they came to believe, not only that capitalism is maturing into a fully international system (etc.), is diffusing progress and civilization to the periphery, but that capitalism at the center is not under siege: with the help of the proletariat (acting through the socialist parties in power, trade unions, Fabian societies, academic Marxists), capitalism was gradually ascending toward socialism. This is a classically diffusionist belief: progress at the center, diffusion of progress to the periphery.

Lenin did not share these views. His theory of imperialism was an alternative, non-diffusionist model of the world. It was uniformitarian (Blaut, 1993) in the sense that it ascribed revolutionary activism to the people of the periphery as well as the center. The exploiters in the center were now confronting the exploited masses in the periphery as well as in their own countries. The world as a whole was now divided into two sectors, the monopoly-capitalist countries and the oppressed countries. Capitalism could only survive at the center, maintaining profit levels and pacifying the workers with minimally acceptable wages, working conditions, job security, and living conditions, by intensifying the exploitation of workers in the periphery, even translocating masses of workers from the periphery to the center with its sweatshops, ghettos, secondary labor markets (Lenin, 1917, 168). This theory was the first strong challenge to the Eurocentric world models which dominated European thought, Marx-and non-Marxist, in the early years of the 20th century.

[ComradeRed]

Originally posted by Hammer+May 11, 2007 04:28 pm--> (Hammer &#064; May 11, 2007 04:28 pm)
Originally posted by ComradeRed+May 10, 2007 02:14 am--> (ComradeRed &#064; May 10, 2007 02:14 am)That&#39;s irrelevant to the fact that Marx did call them first.

...

Marx said explicitly those three "predictions". [/b]Sorry for my lateness, but I don&#39;t see any direct predictions of multinational corporate monopolies in your Das Kapital quotes anymore than I do in the "popular outline." However, a closer link to today&#39;s phenomenon of such is found in the latter than in the former. :)[/b]Yes, the world market has absolutely nothing to do with...the world market.

I&#39;m glad Lenin really pointed that one out&#33; Well he didn&#39;t, but he was closer to talking about it than Marx was...despite Marx and Engels talking about it rather openly...



(The reason I say "predictions" in quotations is because you predict things from a given theory. After looking through Lenin&#39;s work, there is no theory presented, only a grocery list of "predictions" and then it is somehow imperialism by means of magic.)

Yes there is&#33;

"If it were necessary to give the briefest possible definition of imperialism we should have to say that imperialism is the monopoly stage of capitalism." That&#39;s meaningless as a theory...worse, it&#39;s not even a theory, it&#39;s a definition&#33;

There is a difference between a definition and a theory. The latter explains a phenomena, the former names it.

It&#39;s nice that Lenin can name "the monopoly stage of capitalism" as "imperialism"...but that&#39;s not a theory. As it stands, it&#39;s just sophistry.

The longer I think about it, there really is no theory that Lenin has formulated. He makes a set of predictions, though that is not a theory, and he presents definitions and statistics...which is also not a theory.

He doesn&#39;t really explain how imperialism comes about...it&#39;s just a deus ex mechina. He doesn&#39;t explain the evolution of imperialism, it&#39;s simply a mystery.

There is simply no theory behind his predictions, most unsatisfactory&#33;


Especially if we ignore the times that Marx and Engels were living in (apparently the East and West indies companies are irrelevant?)

If you want to talk about historical context (and I just read your quotes extensively), then I reiterate from that site (and what those monopolies&#39; businesses were):


[email protected]
As a result the subject matter of chapter 5 can only be about dominance of foreign markets by commodity exports. This is not the same as the spread of foreign direct investment in the form of new plant and machinery so typical of the post-second world war period. What site are you referring to? You&#39;ve given me at least half a dozen.



Das Kapital
Within its process of circulation, in which industrial capital functions either as money or as commodities, the circuit of industrial capital, whether as money-capital or as commodity-capital, crosses the commodity circulation of the most diverse modes of social production, so far as they produce commodities. No matter whether commodities are the output of production based on slavery, of peasants (Chinese, Indian ryots). of communes (Dutch East Indies), of state enterprise (such as existed in former epochs of Russian history on the basis of serfdom) or of half-savage hunting tribes, etc. — as commodities and money they come face to face with the money and commodities in which the industrial capital presents itself and enter as much into its circuit as into that of the surplus-value borne in the commodity-capital, provided the surplus-value is spent as revenue; hence they enter in both branches of circulation of commodity-capital, The character of the process of production from which they originate is immaterial. They function as commodities in the market, and as commodities they enter into the circuit of industrial capital as well as into the circulation of the surplus-value incorporated in it. It is therefore the universal character of the origin of the commodities, the existence of the market as world-market, which distinguishes the process of circulation of industrial capital.

Since you brought up the subject of Russian history... And that emphasis is yours, with which you derail the subject to talk about Russian history (which you don&#39;t even do&#33;).


But the originality, importance, of Lenin&#39;s work stems mostly from the fact that it gave a comprehensive analysis of imperialism as a total social system. Yes, presenting random statistics can be considered an analysis; a theory does not do that however.

It explains phenomena as opposed to giving a grocery list of predictions.



Marx and Engels were diffusionists. They believed, as did every thinker of their time, that capitalism and modernity were spreading out over the world. But unlike mainstream thinkers, they believed that this was the spread of a plague, not a blessing, and that capitalism was under siege at the center: the proletariat would overthrow it in Europe, then would march, victorious, to the gates of Peking and beyond, spreading socialism across the world. Socialist theorists of the Second International saw things somewhat differently. Is that why Marx supported Free Trade, because he thought it was a plague?

Clearly the author here has no clue what they are talking about with regards to Marx and Engels "diffusionism".

Further, the author is pulling this bit "the proletariat would overthrow it in Europe, then would march, victorious, to the gates of Peking and beyond, spreading socialism across the world" from his ass.

Marx explicitly states that the revolution could only occur in industrialized capitalist societies with the majority of the population being peasantry.

Someone should inform Marx that he was wrong :lol:

This theory was the first strong challenge to the Eurocentric world models which dominated European thought, Marx-and non-Marxist, in the early years of the 20th century. Yes, Historical Materialism is a "Eurocentric model"...that&#39;s why there&#39;s the asiatic mode of production <_<

[Die Neue Zeit]

Originally posted by ComradeRed+May 12, 2007 01:26 am--> (ComradeRed &#064; May 12, 2007 01:26 am)
Originally posted by Site+--> (Site)As a result the subject matter of chapter 5 can only be about dominance of foreign markets by commodity exports. This is not the same as the spread of foreign direct investment in the form of new plant and machinery so typical of the post-second world war period.[/b]What site are you referring to? You&#39;ve given me at least half a dozen. [/b]
The Trotskyist web article on the relevance of Lenin&#39;s Imperialism for today&#39;s world <_<


Originally posted by You
Yes, Historical Materialism is a "Eurocentric model"...that&#39;s why there&#39;s the asiatic mode of production <_<

Huh? :huh:


Originally posted by You
Marx explicitly states that the revolution could only occur in industrialized capitalist societies with the majority of the population being peasantry.

Someone should inform Marx that he was wrong :lol:

What are you talking about in regards to the peasants? :huh:

I think you need to edit your post (because the "Evaluating Imperialism" returned only one search result), unless you are referring to Marx&#39;s letter. In that case, you should read the letter AND the 1882 Preface to the Russian language version of the Communist Manifesto, because there Marx himself came about to the idea that some type of revolution in Russia could serve as a trigger for socialist revolutions in Europe:


Communist [email protected] 1882 Russian Edition Preface
The Communist Manifesto had, as its object, the proclamation of the inevitable impending dissolution of modern bourgeois property. But in Russia we find, face-to-face with the rapidly flowering capitalist swindle and bourgeois property, just beginning to develop, more than half the land owned in common by the peasants. Now the question is: can the Russian obshchina, though greatly undermined, yet a form of primeval common ownership of land, pass directly to the higher form of Communist common ownership? Or, on the contrary, must it first pass through the same process of dissolution such as constitutes the historical evolution of the West?

The only answer to that possible today is this: If the Russian Revolution becomes the signal for a proletarian revolution in the West, so that both complement each other, the present Russian common ownership of land may serve as the starting point for a communist development.


First Draft of Letter To Vera Zasulich
To save the Russian commune, a Russian revolution is needed. For that matter, the government and the “new pillars of society” are doing their best to prepare the masses for just such a disaster. If revolution comes at the opportune moment, if it concentrates all its forces so as to allow the rural commune full scope, the latter will soon develop as an element of regeneration in Russian society and an element of superiority over the countries enslaved by the capitalist system.

[ComradeRed]

Originally posted by Hammer+May 11, 2007 07:40 pm--> (Hammer &#064; May 11, 2007 07:40 pm)
Originally posted by [email protected]
Yes, Historical Materialism is a "Eurocentric model"...that&#39;s why there&#39;s the asiatic mode of production <_<

Huh? :huh: [/b]
The Asiatic Mode of Production (http://www.marxists.org/archive/marx/works/1859/critique-pol-economy/preface-abs.htm) <_<


You
Marx explicitly states that the revolution could only occur in industrialized capitalist societies with the majority of the population being peasantry.

Someone should inform Marx that he was wrong :lol:

What are you talking about in regards to the peasants? :huh: The part "the proletariat would overthrow it in Europe, then would march, victorious, to the gates of Peking and beyond, spreading socialism across the world."

The quotes you gave did not demonstrates Marx&#39;s view that the proletariat would do any such thing. Marx spoke about the revolution in Russia, yeah, but he didn&#39;t talk about the "European proletariat emancipating humanity" or any such rubbish that your site is claiming.

The author is simply pulling this from his ass.


I think you need to edit your post (because the "Evaluating Imperialism" returned only one search result), unless you are referring to Marx&#39;s letter. What the hell are you talking about?

[Die Neue Zeit]

^^^ There are two parts to that last quote in your post:

1) I was merely confused by your rather contradictory "industrialized capitalist societies with the majority of the population being peasantry" remark, until you elucidated.

2) In regards to Marx&#39;s letter, you&#39;ve got two PMs. :)

[Die Neue Zeit]

That&#39;s meaningless as a theory...worse, it&#39;s not even a theory, it&#39;s a definition&#33;

There is a difference between a definition and a theory. The latter explains a phenomena, the former names it.

It&#39;s nice that Lenin can name "the monopoly stage of capitalism" as "imperialism"...but that&#39;s not a theory. As it stands, it&#39;s just sophistry.

The longer I think about it, there really is no theory that Lenin has formulated. He makes a set of predictions, though that is not a theory, and he presents definitions and statistics...which is also not a theory.

Sorry for the long-delayed reply, but you forced me to think really well about the five criteria set out in the "popular outline." It seems to me that what Lenin was trying to do was explain WWI, an imperialist war, in purely economic terms (all of the mainstream-accepted "causes" of WWI - complex alliances, militarism, nationalism, etc.).

It seems to me that the criteria are ascending somewhat (albeit occuring relatively at the same time, especially #1 and #2), starting down low from the emergence of the hourglass, going further up with more players in the game of capital control (banks, speculators, execs, etc.), still going further up with the capital exports needed to establish the economic then political division of the world, "superprofits," etc. That ultimately leads to inter-imperialist conflict, which counters Kautsky&#39;s and Negri&#39;s ultra-imperialism crap. That&#39;s Lenin&#39;s theory of "imperialism."

[There&#39;s more to what Lenin says about "imperialism" than his "popular outline." The term "superprofits" is more prominent in Imperialism and the Split in Socialism.]

Funny enough that you mentioned elsewhere the exception of the US IMPORTING capital. Well, perhaps, but notice that it is importing capital from economies with more prominent manufacturing sectors (I&#39;m looking at Germany, Japan, and China)? This still meets Lenin&#39;s criteria #3, because the export of capital during his day came from manufacturing countries.

[вор в законе]

Originally posted by Comrade[email protected] 09, 2007 04:07 am
[QUOTE=Hammer]
I assume it to be the former. If so, then this was all ready predicted by Marx: General Law of the Accumulation of Capital (http://marxists.org/archive/marx/works/1867-c1/ch25.htm).

If you mean the latter -- that the bourgeoisie are somehow "disappearing" into the night -- I find that quite hard to believe and an under-analyzed assessment.
This was written during the late 19th century. Specifically, it was written about Capitalism in England 150 years ago. The material reality though has changed, and the Capitalists have created the welfare state and have realized that if the proletarian doesn&#39;t have money to buy their commodities and services, the system would collapse.

Essentially they used Marx&#39;s analysis of Capitalism to save the system.

Anyway, my point is that we should stop seeing Marxism in a religious manner and think reasonably.

[Die Neue Zeit]

^^^ Neither of us said anything about having religious affections for Marx&#39;s thought (and ComradeRed is a physicist ;) ). :huh:

As I emphasized earlier, there isn&#39;t enough emphasis in Das Kapital on the subject of monopoly. Even Engels said per the quotes above that one or two mere attempts at monopoly were being made.

While related to accumulation, monopoly is a whole new dynamic.

[Die Neue Zeit]

Somebody brought this up today in the Learning thread, something which hasn&#39;t come to my attention even in my business studies or my free-time studies of monopoly capitalism ( :( ):

Venture Capitalism (http://www.revleft.com/index.php?act=ST&f=36&t=67961&st=)


Originally posted by redcannon+--> (redcannon)What is Venture Capitalism? I&#39;m very confused as to the whole concept of venture capital and who venture capitalists are.[/b]


Originally posted by [email protected]
http://en.wikipedia.org/wiki/Venture_capital


Venture capital is a type of private equity capital typically provided by professional, outside investors to new, growth businesses. Generally made as cash in exchange for shares in the investee company, venture capital investments are usually high risk, but offer the potential for above-average returns. A venture capitalist (VC) is a person who makes such investments. A venture capital fund is a pooled investment vehicle (often a partnership) that primarily invests the financial capital of third-party investors in enterprises that are too risky for the standard capital markets or bank loans. Venture capital can also include managerial and technical expertise. Most venture capital comes from a group of wealthy investors, investment banks and other financial institutions that pool such investments or partnerships. This form of raising capital is popular among new companies, or ventures, with limited operating history, who cannot raise funds through a debt issue. The downside for entrepreneurs is that venture capitalists usually get a say in company decisions, in addition to a portion of the equity.


Janus
In other words, they provide the funds and capital which entrepeneurs need.

[ComradeRed]

Originally posted by Red [email protected] 17, 2007 01:47 pm
This was written during the late 19th century. Specifically, it was written about Capitalism in England 150 years ago. The material reality though has changed, and the Capitalists have created the welfare state and have realized that if the proletarian doesn&#39;t have money to buy their commodities and services, the system would collapse.
And yet amazingly, the laws controlling the dynamics of capitalism 150 years ago is still controlling capitalism today.


Essentially they used Marx&#39;s analysis of Capitalism to save the system. :lol: Keynesian economics is nothing remotely similar to Marxist economics.


Anyway, my point is that we should stop seeing Marxism in a religious manner and think reasonably. Uh, no, not quite right.

Marx got a number of predictions right, like the Law of Accumulation and the dynamics of capitalism. You can even see this naively from the statistics out without even calculating a single equation out.

He also got a number of theories wrong, like dialectics.

Old Karl was a mere mortal, not a demigod; no one here but you suggests otherwise.

Hammer

There is a section of The Grundrisse which blows your whole "Marx&#39;s Law of Accumulation presupposes constant competition" theory to pieces (which I don&#39;t really understand how you got to such a conclusion in the first place):
Competition generally, this essential locomotive force of the bourgeois economy, does not establish its laws, but is rather their executor. Unlimited competition is therefore not the presupposition for the truth of the economic laws, but rather the consequence -- the form of appearance in which their necessity realizes itself. For the economists to presuppose, as does Ricardo, that unlimited competition exists [45] (http://marxists.org/archive/marx/works/1857/grundrisse/f551-600.htm#45) is to presuppose the full reality and realization of the bourgeois relations of production in their specific and distinct character. Competition therefore does not explain these laws; rather, it lets them be seen, but does not produce them. --emphasis added

The Grundrisse "Ramsay&#39;s view that capital is its own source of profit" (http://marxists.org/archive/marx/works/1857/grundrisse/ch10.htm#p549) by Karl Marx (1857).