new mercantalism

jones/bhandari djones at
Wed Apr 19 02:26:01 MDT 1995

Reproduced below is  an absoutely  brilliant analysis of "the ratio of
dynamic to stagnant sectors" in an individual nation.  The analysis comes
from Tilla Siegel who I believe is now a Prof (or perhaps Chair) of
Sociology at the Goethe University at Frankfurt. I am hoping it will
provoke discussion.

In its own fetishistic terms, bourgeois economics  is now groping towards
an analysis of this ratio.  This ratio is perhaps the basis of today's
mercantalism, as was once the fetish of gold.

 A chair of many influential "global competitiveness" committees, Harvard
Business Prof Michael Porter has basically equated that concept with this
ratio--as can be seen from any of his very tedious contributions to the
Harvard Business Review.  In other words, he pays careful attention to the
actual sectorial composition of economies, not the aggregates of
Keynesianism.  This sort of attention is sometimes seen as legacy of
Schumpeterian economics, as emphasized by noted American business historian
Thomas McGraw. As always, the economists  must now catch up with the
business profs if they want to have any relation to reality; hence the new
interest in Schumpeterian growth theory.

The labor secretary Robert Reich himself is groping at this idea in his
chapter on the movement from "high volume to high value" in his Work of
Nations.  He is explicitly concerned, from a natl. pot of view, with the
expulsion of certain sectors and the monopolization of others.

On the other hand, Siegel is able to analyze  the reproduction of total
capital, not (as with narrow bourgeois minds) just the "growth" an
individual nation based on its specific ratio of dynamic to stagnant
sectors.  To me this illuminates the whole/part relationship in Marx better
than can any purely philosophical treatment.

"The existence of dynamic and stagnant sectors in capitalism does not
contradict the tendency toward an equalization of profit rates.  this is
not just because the term 'tendency'already implies continually changing
inequalities between profit rates.  dyanic sectors do not grow faster just
because their profit rates, and so rates of accumulation, are above
average, but also because these profit rates attract capitals from other
sectors.  So long as the additional influx of capital does change the
relations between supply and demand in such a way that the profit rates
fall below average, they will remain dyanmic sectors.  And stagnant sectors
do not grow more slowly or shrink just because their rates of profit are
below average, but also because capitals leave these sectors for others
with higher profit rates. In general, the existence of dynamic and stagnant
sectors in capitalism is an expression of the capital movements that create
the tendency toward an average rate of profit.

"With respect to the position of the individual nation in the world market
the ratio of dynamic to stagnant sectors in its economy is very important.
Even if we assume that all nations have the same wage level and that all
nations produce at the highest levels of productivity, a ntion that has
specialized in dynamic sectors will have a higher growth rate than one that
has specialized in stagnant sectors. Through the imperialistic expansion of
capital the international distribution of these sectors has created a
partition of the capitalist world market into nations with primarily
dynamic sectors (in the center) and nations with primarily stagnant sectors
(in the periphery).

"But how did this specialization come about?  It would be wrong to take the
effect for the cause and to argue that it came about because it was
favorable for the dominant capitalist nations.  One cannot say that thie
process toward this form of specializtion was consciously created in the
sense that the nations of the center transferred staganatn sectors into the
periphery by way of state action or by concerned capitalist action.  This
process was set in motion mainly by the fact that *acquired* advantages in
productivity, i.e., advantages resulting from technological progress, have
played an increasingly important role in international trade.  meanwhile,
the nations of the center have been and are monopolizing the development of
technology while their capital have destroyed and are destryoing the
possibility of this development in the periphery.

"On the one hand, the increase of productivity in a sphere of production
creates the possibility of extra profits.  On the other hand, this increase
makes possible the capture of markets in other nations where the level of
productivity is lower, and somakes possible an increase in demand and thus
the reapoing of extra profits over a longer span of time.  This sphere of
production becomes a dynamic one (because of a higher rate of accumulation
and the influx of new capitals) and acquires more weight in the nation
concerned wthan other spheres where the relation between falling cost
prices and expanding demand is not as favorable.

"What was left for the nations of ther periphery were those sectors where
natural advantages (climate, minerals, etc) and lower wages could not be
compensated for by acquired advantages. These conditions severly limit the
possibility of making extra profits by lowering cost prices in these
sectors.  this possibility depneds primarily on the devleopment of demand
for these commodities.  And his demand comes mainly from the center.  Thus
the growth potential of the nations of the peripery are strictly limited by
the development of capitalism in the center.  (It should be said that this
applies not only to the product9on of primary good but also to the
industrial production thath has been transferred to the periphery because
of low wages there.)

This is, in its breivty, only a very rough sketch of the mechanisms that
have led to an unequal distribution of the dynamic and stagnant sectors
between the center and periphery of the world market.  Now I have to
qualify my statement above, that this distribution has not been consciously
created.  It is true that the state in private capitalism cannot tell
capitals where to invest.  This is why is so important to look at the
mechanisms that capital creates itself.  But throughout the history of
capitalism, nation states have repeatedly intervened in the economic
process, knwoing well how important is the specialization of their
economies in certain speheres of production.  By doing this they created
conditions in which these mechanisms operate in fabor of the capitals of
their nations." (!24-125)

Tilla Siegel, "Politics and Economics in the Capitalist World Market:
Methodological Problems of Marxist Analysis", International Journal of
Sociology, Spring 1984/Vol. XIV, no. 1

In my opinion, the one of the great problems today for revolutionary
politics is the fight against participation in such a programme of such
state intervention aimed at succeeding in the specialization of such
dynamic sectors--a disaster for revolutionary internationalism!

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