Unequal Exchange

jones/bhandari djones at uclink.berkeley.edu
Sun Jan 29 21:14:31 MST 1995

>Crisis for capital? Where? It seems quite solidly in control of everything.
>Of course that could always change, but I want evidence of a present

Doug's question poses all sorts of empirical and theoretical problems.  It
is also I think an old one: it has figured in the debates between Bernstein
and Luxemburg, Kautsky and Lenin, Hilferding and Grossmann, Marcuse and
Mattick.     As the accumulation process is also one of concentration and
centralization, capital can indeed administer prices, delay devaluation
(which however, as Doug himself as noted in previous posts, only only
fetters use-value production  in order to maintain exchange value, thereby
threatening an overproduction of capital in the long run),  avoid
bottlenecks through forward planning,  benefit from the bankrupticies of
smaller firms, stimulate demand through advertising techniques in order to
meet production quotas-- in short, seemingly be in the control of

All this may suggest that  concentration and centralization enables capital
to increase both the rate and mass of surplus value. There would then be no
breakdown tendency from a shortage of surplus value, no breakdwon crisis
for capital.

This is indeed a very difficult issue, one beyond my present competence.
But reading I have done, and I can recommend (whatever that's worth) the
following readings:

Geert Reuten, "Accumulation of capital and the foundation of the tendency
of the rate of profit to fall", Cambridge Journal of Economics, 1991 (don't
have the issue and volume no.)  See esp. Section 8 on the restructuring and
centralization of capital, but what is important, I think, is the question
of the level of abstraction at which the Marxian analysis is conducted.

Fred Moseley's work careful conceptual an empirical work has been mentioned
many times: The Falling Rate of Profit in the Postwar American Economy.
Fred's work has stimulated a lively exchange in both RRPE and Science and

Guglielmo Carchedi's chapter on crisis, growth and inflation in his
Frontiers of Political Economy is also helpful (I appreciate these works
more and more as I begin to understand what the questions are).

But I have mentioned these works before, as I have also underlined the
importance of Mattick (see in this context especially Economic Crisis and
Crisis Theory  which also includes a  critique of underconsumption  theory)
and Blake's 1939 textbook (see especially the chapter on finance capital
and imperialism where Kautsky's arguments for stabilization are given a
Leninist reply).

Here's a passage from Mattick:

But as the accumulation of capital is also a concentration processs and
thus plays larger profits into fewer hands, the accumulating capitals were
not for some time aware of the decline in profits.  And because the
centralization process can raise the rate of profit even in the absence of
capital concentration, simply by the reorganization and different
utilization of the existing capital, a relative stagnation of capital does
not at once express itself in lower profits.  On the other hand, the
hastened concentration and centralization of capital can also be seen as
measures forced upon capital to maintain its profitability. Insofar as
these measures compensate for a lack of sufficient new investments, they
hold down the rising organic composition of capital, thus bolstering the
rate of profit at the expense of accumulation.  But while the profit rate
may be maintained, general economic activity stagnates, for it cannot
advance without the production of additional capital.  Sooner or later, the
stagnation leads to a crisis, which can be overcome throught the resumption
of the accumulation process.

Marxism: Last Refuge of the Bourgeoisie, p. 132 (he also discusses Kuznet's
and Gottheil's data in this chapter).

The possibilities for reorganization and different utilization were
highlighted in Eduard Bernstein's revisionist  theory that the capitalist
system need not imply upward pressure on the organic composisiton of
capital, which threatens, as Marx wrote to Engels on 4/30/68, the rate of

  But as Mattick points out here, this can only threaten long-term
stagnation, especially given the rapid accumulation necessary to prevent
overproduction of fixed capital, which has a slower turnover time than
consumer goods.  But these are elements of the crisis, already brewing,
which Doug, more than anyone on this list, has been pointing to.


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