Rakesh Bhandari wrote:
I must say that I am rather
surprised that Doug thinks it possible to evaluate the "long-wave" vitality
of US capitalism, independently of the situation as a whole.
May I quote myself, from LBO #80?
quote
Long upswing? Maybe the estimable Anwar Shaikh, a Marxian economist at the
New School, is right, and the long crisis that began in 1973 is over, and
we're in the early stages of a long upwave of prosperity. Shaikh argues
that that crisis was the result of a decline in corporate profitability
from the late 1940s into the early 1980s, but thanks to the assault on
labor that succeeded in cutting real wages, profitability has been
restored, and is now in an upswing -- at least in the U.S. According to the
laws of classical Marxism, that should mean higher growth rates, strong
stock markets, and maybe even some gains for labor.
Maybe Shaikh is right; as Marx himself said, "permanent crises do not
exist." Lefties have often lusted after crises so passionately that they've
even conjured up a few that turned out to be illusions. Presumably this
craving is motivated by a belief that hard times will prompt a leftward
turn in politics. But during this quarter-century of semi-hard times we've
seen just the opposite -- a sharp right turn in elite political thinking,
and resignation and despair among the masses. It may be that rising
expectations are better fertilizer for radical politics than falling ones.
But outside the U.S., it's hard to make the case for a long upwave. German
unemployment is at levels unseen since the days of Weimar, Russia is a
wreck, Africa is as well, and Asia, once the world's brightest economic
spot, is dimming rapidly. An unidentified U.S. Treasury official worried to
the New York Times that there was a potential for a great "train wreck" in
Japan, South Korea seems on the verge of imploding, and much of the rest of
Asia is sinking into recession. Can the U.S. be in the early phases of a
boom while the rest of the world is stuck in the mud? Or is the rest of the
world entering the endgame of its crisis in preparation for joining America
in an upswing?
[...]
It seems unlikely, though, that the U.S. stock market could head seriously
southwards without Greenspan turning seriously hostile and raising interest
rates, something he's unlikely to do as long as world markets remain
skittish. But he still must worry about three things simultaneously -- the
dangers of the Wall Street bubble reflating; the dangers that persistently
tight labor markets will lead to sustained increases in real wages, and
with that, a serious squeeze on corporate profits; and the risk of the
Asian sickness worsening (and even spreading to Latin America, should
investors get nervous and pull capital out of the region). In Greenspan's
recent public testimony, he's been professing hope that the Asian slump
will slow the U.S. economy enough to take the pressure off our labor
markets -- in effect, to do his tightening work for him. But if Southeast
Asia is now joining Japan in an extended recession, and if the Japanese
slump is deepening rather than climaxing, then the effects on the rest of
the world could be a lot less benign.
The verge of deflation, or the early phases of a generation-long boom? Who
knows? There's nothing more frustrating to a pundit than to confess to
confusion and uncertainty, but honesty demands just that right now.
endquote
So it seems to me that I reported Shaikh's analysis as something to be
taken seriously - he's no dummy - but that there were reasons to be
skeptical too. I don't think anyone can say with any kind of confidence
what the hell is going on. As I've argued here before, you could read the S
Korean bailout as a U.S. takeover of that country, turning a rival into a
subordinate. From the U.S. point of view, that could be very bullish news.
Given their track record over the last 20-25 years, you have to give U.S.
crisis managers the benefit of the doubt in their ability to turn potential
disaster to their advantage. That's not to say they can do it forever,
but
I hope I'm not betraying any confidences, but in a private email to me
yesterday, Rakesh said that Marxism isn't a theory of upswings, but one of
crisis. I can't agree. For one, Marx was a theorist of the expansiveness of
capital, of its ability to break beyond apparent barriers to its expansion,
as much as he was a theorist of contradiction and disaster. And for two,
since capitalism spends most of its time in expansion, you're condeming
Marxism to marginality. And for three, if you believe in crisis, you'll see
one everywhere all the time. So you end up looking really silly when the
crisis passes. So for all these reasons, I think we have to take seriously
the possibility that Shaikh is right, and the long crisis is over in the
U.S. at least.
Doug
