Max Sawicky:
>We seem to be neglecting the temporal, artificial,
>and political nature of finance. If the real
>capital stock and labor force grow moderately,
>the numbers say the output will be there.
That's a big "if" based on the numbers contained in Harry Shutt's "The
Trouble With Capitalism", Zed Books, 1998, p. 38.
---
OECD: variations in rate of change in output, private consumption,
fixed investment and consumer prices (annual % change)
1953-60 60-65 65-73 73-79 79-85 85-89 89-95 50-73 73-95
Gross domestic product 2.9 5.3 5.0 2.7 2.1 3.4 1.8 4.3 2.4
Private Consumption 2.9 5.1 5.1 3.0 2.1 3.5 2.0 4.3 2.6
Fixed Capital Formation 4.4 7.1 5.9 1.2 1.1 5.3 1.8 5.7 2.1
Consumer Prices 2.5 2.6 4.8 10.3 7.5 3.5 3.4 3.4 6.4
---
The brute fact is that capitalist growth slowed down in the early '70s and
neither neo-Keynsianism, nor monetarism has worked to change that. The
reason for a slowdown in growth is that there is a slowdown in demand,
which government policy under capitalism can not change. During the 1930s,
there was a severe downturn in the economy in 1937, as Harry Magdoff
explains in an interesting MR article from earlier in the year. It is
written as a long letter to somebody named "Chris" explaining why his
article submitted to MR had one serious mistake in it: it gave credence to
Keynsianism.
Shutt's book is really an eye-opener and I recommend it strongly,
especially the chapter "The End of the Boom and the Neo-classical
Reaction," from which the above chart is found. He describes a problem of
"market saturation" in which the "increasing maturity of most consumer
markets in the industrialized countries was becoming a noticeable
constraint to economic growth in the industrialized world by the end of the
1960s. This meant that in addition to static demand for non-durable goods
(food, drink and clothing) the markets for most durable goods (automobiles,
televisions sets, etc.) tended more and more to be governed mainly by
replacement demand rather than by the continuous opening up of new groups
of first-time buyers, which had been possible throughout the 1950s and
early 1960s. Hence demand for goods generally began to grow more in line
with population--which was in any case increasing more slowly than in the
immediate postwar period--rather than at the rapid rates recorded up to the
mid-1960s.
This is a rather intractable problem for a system based on profit. That is
why Shutt's final chapter is a consideration of alternatives to capitalism.
Those of us, like Max, who remain committed to change within the capitalist
system will appear more and more irrelevant as the crisis deepens. Any
dogma, whether of the liberal left or the Marxist-Leninist variety, is
awful hard to break from. Perhaps if Max lost his job, he might lose
confidence in the capitalist system. Of course, when I lost mine, it only
helped me to focus my opposition to the system even more, because it was
the first time I was affected personally since the Vietnam draft years.
Louis Proyect
(http://www.panix.com/~lnp3/marxism.html)
