Jim D attempts to assure us: > >actually, it's not an "argument" in the sense of a "quarrel" (and definitely >not a "contradiction" à la Monty Python). It's a discussion. (In this >thread, I had a argument with someone else. Or was it a contradiction? >Whatever, it was a waste of time.)
But Jim D had also wrote: >the capitalists recogizing that wage increases would be >in their interests. It's true that social democracy in Europe was better for >the capitalists there than neo-liberalism is Yet no self respecting Marxian or at least no Marxian who has even the most superficial sense of the history of Marxian debates about crisis should not argue forcefully with a social democrat which is what Jim D quite obviously is. Jim D's theory leads him straight to the conclusion that the contradictions of capitalism can be overcome or sufficiently attenuated even even if the institutions of private property and wage labor remain in tact as long as capital is hemmed in to some extent by social democratic institutions that tinker with the distribution of income. Which is exactly not to personalize the argument, but to politicize it. Yet Jim D seems unaware that he is taking an extremely provocative, i.e., revisionist, position, i.e., a Keynesian and national populist position. Which is fine. It is a respectable position but it is indeed in irresolvable conflict with Marxian theory. > > >Greenspan emphasized again in a speech last week that "weak profits and >investment" is a reason for continuing concern about the economy. < > >Hasn't he also said that consumer spending is what's been holding up the >U.S. economy? My point -- and that of Godley & Izureta, who also go beyond >surface appearances to think about the determinants of private-sector >spending -- is that this prop can't last. It can last as long as the demand for for constant capital last since consumption is itself determined by employment in the means of production...so long as that demand endures. Again such are the ABC's of Marx. > >I agree with Michael: the capitalist economy, as Marx pointed out, is >holistic. Pointing out one factor as a shock to the system (e.g., the fall >in the rate of profit seen since the 1960s) is no substitute for a holistic >theory. It's not a matter of pointing to one factor, it's about placing factors in a cause and effect relation. Some factors are effects which then can compound the underlying problem. Which is obviously what Fred said. He agreed that the crisis could be compounded by a weakness if consumer's demand which has already been mortgaged to the future. > >That's why I referenced my simple (Harrod-Domar) version of Marx's >reproduction schemes, which brings the various components of aggregate >demand and the full-capacity profit rate into a single equation. > >Now, no single equation could ever be a substitute for a holistic >political-economic analysis, but I'm sketched that too: I view capitalism as >having an inherent tendency toward over-accumulation. Yet the world is obviously undercapitalized--so in what sense have means of production been overaccumulated? Relative to demand? What kind of demand? Why has that demand weakened? Demand for new means of production weakens because profit cannot be made therewith. Why? Because consumption is not high enough. Can't be since investment demand picks up without rising prices and stronger demand. it may pick up with even greater difficulties on the consumption side. It picks up because constant capital has been cheapened, allowing for the rate of profit to be greater. Rakesh
