Unequal Exchange

jones/bhandari djones at uclink.berkeley.edu
Mon Jan 30 22:05:15 MST 1995

Doug discusses the following 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.
><endquote; emphasis djones>

In response Doug notes
>It is utterly incredible that capital not be aware of a decline in profits.
>It is the most urgently watched measure in capitalist society.

In the passage cited, Mattick argues that the ACCUMULATING CAPITALS may not
be immediately aware of the decline in profits.  The small rivals and
suppliers which are falling into the laps of centralized capital  or having
their prices dictated to them may well fall below the average rate of
profit, however.  This process of intra-capital transfer of value enables
the centralized firms to withstand at least temporarily the relative
stagnation of capital, while only compounding a long-term problem of
overproduction which (as I understand it) is usually most severe for
Division I goods.

In order to understand this process of intra-capital transfer of value, we
need an analysis of sufficient abstraction to understand the capitalist
system as a totality of production and exchange.  In the previous post, I
indicated writings by Reuten, Moseley and Carchedi where such an analysis
is advanced.  In this regard, Carchedi is very important, though he tends
to downplay the relationship between oligopical and competitive capital for
a more careful analysis of internal conflict among the fomer. The specific
transfer of value that obtains in the circulation process to for example
monopolies from their suppliers  remains (I think) an outstanding
contemporary problem in Marxian analysis.

 Crisis in short intensifies all sorts of contradictions, not only the
fundamental capital-labor one. It is always seemed to me that these
"pushed-to-wall" firms would be the bedrock of all sorts of reactionary
anti-monopoly capital politics from which proletarian politics (apologies
to Postone) must struggle to decouple itself.  I would be interested in
hearing any thoughts about this.

There is a very preliminary  discussion of all this in three sections of
the Blake textbook "The Role of Price in Accumulation", "Crisis Is Not an
Absolute Category" and "How the Small Business Accumulates for the

I'll respond to Doug's profit rate calculations during the Great Depression
later, as well as his argument that the post-War Boom suggests the
resilency of captitalism.



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