I appreciate Louis' interesting report but note that all the
speakers, while substantive, seemed to be of the same
mind. Does everybody here buy the view reflected in the panel?
I don't have time today to respond in detail because I'm trying to
work through a blizzard of Paul Davidson posts on PKT, but a few
comments:
> Recently the "globalization" theorists have begun to target "finance
> capital" as the root of all evils. In a glossy newsletter that I received
You don't have to have an exaggerated view of globalization, nor to
do you have to buy Korten, to see a noteworthy distinction between
finance and industrial capital.
> recently from the Forum on Globalization, David Korten, the group's
> executive director and author of "When Corporations Ruled the World",
> makes the case that "finance capital" has to be resisted. This "finance
> capital" has no sense of duty; it just goes where profits are to be made.
> Implicit in Korten's article is the belief that industrial capital is warm
> and fuzzy, while the world of banks and brokerage houses is cold and
I haven't followed Korten but I very much doubt that 'warm and
fuzzy' does justice to his view.
> . . .
> The next speaker was Randy Martin, who teaches at Pratt University in New
> York and is on the Board of Directors of the Brecht Forum. He said that
> there is tendency on the part of the left, particularly the
> "globalization" current, to dichotomize industrial and financial capital.
> Industrial capital = the productive, the local and the real, while
> financial capital = the unproductive, the global and the fictitious. Randy
> punctured this view with a passages from Capital that make the point that
> financial capital is part of the overall chain of commodity exchange and
> the accumulation of capital. If you limit yourself to volume one of
> Capital, you will tend to miss this aspect of Marx's theory.
That industry and finance are related is a truism.
To some extent, however,
a) industry and finance are directed by different people;
managers on the one side and brokers/traders/bankers
on the other;
b) business owners, entrepreneurs, absentee owners via stock,
and bond-holders are affected differently by changes in the
price level and the employment level;
c) the combination of these two ingredients makes for political
conflict which could be helpful to the working class;
d) U.S. history is replete with cases where such differences
assisted progressive politics (e.g., populism from about
1870 to 1920, and possibly over the next decade).
> After a lunch break, Anwar Sheikh spoke. He made the case for the
> existence of a "communistic" association of the capitalist class. He used
> the term ironically to indicate that there is a commonality of interests
> in the various components of capital. What explains the commonality is the
> law of the equalization of profit rates. Investment will flow to
This sounds like a non-sequitur. Cut-throat competition could be
associated with a convergence of prices, but that hardly seems to be
a basis for imputing any communal feeling to the participants in this
game. Why accept a low-profit situation unless forced to? Clearly
the incentive for each participant is to change the game and gain
some kind of edge (e.g., product differentiation, Mafioso behavior).
> commercial, financial or industrial capital on the basis of expected
> yields. The credit system facilitates these flows since it operates on the
> basis of future rewards and is itself composed of the accumulate capital
> returns of historic investment. He used charts and graphs that showed the
> tendency of financial, commercial and industrial profit rates to be
> consistent with each other over a 40 year period. No sector is privileged.
> He also made the point that the power of the capitalist system is
> exaggerated by the left. It is important to remember that since nobody is
> control of the capitalist system, it will work against its own long-term
> viability. He presented a rather dramatic chart that showed the profit
Isn't this inconsistent with the 'communistic' idea above?
> rate has been declining steadily over the past 40 years as well. The only
> upturn occurred in 1982 when an attack on labor was first unleashed,
> coinciding with the airline controllers strike.
Work at EPI by Dean Baker and Larry Mishel is counter-evidence; it
finds profit rates have risen and are at record highs. (See our
'profits' briefs on our web site).
> The next speaker was Doug Henwood who provided a historical account of how
> corporations and central banks were invented as a response to the needs of
> capital accumulation. He said that one school of thought, including
> Gabriel Kolko, views these institutions as signs of clashing interests
> between the Eastern states and the Western frontier. A more scientific
> understanding would be based on the insight that capital creates these
> institutions so as to better regulate its own functioning. In any case,
> they serve as a form of social control. Doug began his presentation with a
Sure. That doesn't eliminate the possibility of conflict.
To some extent, the insistence on a 'unified system' concept may be a
different form of the perennial reform versus revolution debate.
Differences between finance and industry make for political
opportunities which are eschewed by revolutionists. Alternatively,
differences could be invented by reformers to evade the revolutionary
imperative.
Evasively,
MBS
===================================================
Max B. Sawicky Economic Policy Institute
[EMAIL PROTECTED] 1660 L Street, NW
202-775-8810 (voice) Ste. 1200
202-775-0819 (fax) Washington, DC 20036
http://tap.epn.org/sawicky
Opinions above do not necessarily reflect the views
of anyone associated with the Economic Policy
Institute other than this writer.
===================================================
