Brenner, Foster, & McNally: Class Struggles, Competition, &Monopoly (was Re: replying to Yoshie again was Re: God & Bhaskar)

Yoshie Furuhashi furuhashi.1 at SPAMosu.edu
Thu Dec 21 14:23:13 MST 2000


Gary writes:

>Yoshie asks the above question and appends a review by Lou.
>Interesting.  I cannot really say I have read a lot by Kovel or
>Foster.  I liked Foster on Brenner but then my inability to grasp
>even the basic of economics is such that I could not offer a defence
>of Foster to a Brennerite.  I have read some of Kovel's stuff and am
>sympathetic.  I suppose my trajectory is taking me towards an
>embrace of spiritualism and that would put me much closer to Kovel
>than Foster.

There are at least two questions at stake here, with regard to
competing explanations of "why the long boom gave way to a long
downturn,...why stagnation has persisted on an international scale
for such an exceedingly long period, and finally...how the failure to
resolve the problems underlying the long downturn opened the way to
the world economic crisis of 1997-1998" (Robert Brenner at
<http://www.monthlyreview.org/1299bren.htm>).

1.  Which is the source of stagnation -- intensified competition or
increasing monopoly?  Robert Brenner emphasizes the former, while
John Bellamy Foster the latter.  The question concerns how to
evaluate P. Baran and P. Sweezy, Monopoly Capital (New York: 1966 and
1969); and P. Sweezy, "Competition and Monopoly" (1981), in J. B.
Foster and H. Szlajfer, eds., _The Faltering Economy_ (New York:
1984):

*****   The bottom line for Foster seems to be that the
concentration, centralization, and prevalence of large firms are
incompatible with my thesis because they lead to monopoly, and, for
that reason, a tendency for the surplus, and for the rate of profit,
to rise, which goes against my argument that cost-cutting competition
brings about a tendency for the rate of profit to fall as a
consequence of its impact on already-existing fixed capital. As an
adherent of the Monthly Review school, Foster finds the roots of the
long downturn in a problem of insufficient demand that results from
the aggregate inability to realize the tendentially rising surplus,
especially due to monopoly firms' interest in keeping down output to
secure higher prices and holding back investment to protect already
existing capital. Monopolies have the potential to restrict output
and investment, of course, because they are freed from the
competitive constraint. Insufficient demand manifests itself, in
turn, in falling capacity utilization and slowed capital
accumulation.   (Brenner,
<http://www.monthlyreview.org/1299bren.htm>)   *****

2.  Which should be more prominent in an explanation of the long
downturn -- class struggles or inter-capitalist competition?  McNally
& Foster say that Brenner displaces the former from the center of
explanation:

*****   At the root of the misgivings of both McNally and Foster
seems to be a concern that I am displacing the "vertical"
capital-labor relationship from the center of the analysis of
capitalist development in favor of the "horizontal" capital-capital
relationship. However, my denial that the deep roots of economic
downturn in general, or of the current long stagnation in particular,
should be sought in class struggle-in either capital or labor being
"too strong"-in no way implies that I doubt that the source of
capitalist profits are to be found solely in the exploitation of
workers. Nor, Foster notwithstanding, do I place "the question of
capital versus labor in the background" (32); on the contrary, as any
reasonably careful reader will attest, I analyze the class struggle
and its often significant impact on profitability in each of the
successive phases of the postwar epoch. But, although exploitation
constitutes the only source of surplus value, and although class
struggle is significant for the distribution of income, there is no
reason to take it as a matter of dogma that the mechanism driving
economic crisis and stagnation should be sought directly in the
capital-labor relation. Indeed, the thesis Foster himself favors, of
a rising rate of surplus leading to problems of realization, depends
on the capacity of firms in concentrated/centralized industries to
raise prices over money wages, which itself derives from these firms'
horizontal oligopolistic relationships with one another, and
explicitly not from the class struggle.8 In the same way, McNally
strongly endorses the point of departure and basic structure, if not
the concrete results, of the traditional version of the Marxist
thesis of the falling rate of profit. Yet this theory derives the
falling rate of profit, as he says, from firms' attempts to cut costs
so as to respond to horizontal competition by bringing in new
techniques that raise the organic composition (capital-labor ratio)
"in order to raise productivity and win the battle for market share"
(44, emphasis added). Class struggle plays no part in it.

In the one place where he does specify a theoretical disagreement
with my argument, McNally asserts (not, perhaps, entirely
consistently) that the actual source of the expansion of fixed
capital that occupies such a prominent place in my analysis is to be
found in the exigencies of capital's class struggle against labor and
not, as I would have it, in capitals' struggle for survival against
other capitals (43). McNally's contention is that capitalists
increase their reliance on fixed capital to reduce their reliance on
a labor force that will tend to resist the extraction of surplus
value. His argument is of a piece with other Marxists' assertion that
employers mechanize primarily to de-skill, so as to reduce their
dependence on craft labor.

Now, I obviously have no reason to deny that the resistance of
workers, not least skilled workers, at the point of production, plays
an essential part in shaping capitalists' methods of extracting
surplus value and making a profit. McNally is surely right to contend
that, all else being equal, capitalists will seek to impose
mechanized techniques that leave them less rather than more dependent
on workers, especially skilled ones. But, when McNally accuses me of
failing to "derive the growth of fixed capital from the capital-labor
relation in general and labor's resistance to work in particular"
(43, emphasis added), I can only plead guilty. For it seems to me all
but self-evident that the growth of fixed capital cannot be derived
from the capital-labor relation at all, unless the latter is
considered in connection with the pressures of competition. The main
reason that capitalists have to worry about worker resistance to the
intensification of labor is that, unless they take hold of the labor
process, they are under competitive threat from rival producers who
have done so. In the absence of the competitive threat, capitalists
have no compulsion to intensify the labor process at all; indeed, how
much they try to do this would then depend only on each capitalist's
thirst for greater consumption. Why would capitalists be concerned
with most effectively fighting the class struggle, if they did not
have to worry about maximizing profits in order to compete and
survive? The systematic drive to intensify work and secure control of
the labor process is generated only by the rigors of competition.9

To the foregoing, it seems to me that one need only add the crucial,
if hardly controversial, point that capitalists have, historically,
been driven to expand fixed capital so as to cut costs not only by
the exigencies of controlling the labor process, but, even more, by
the demands of technology and (increasingly) science, i.e., the need
to bring in ever more powerful productive forces. Of course, this
process of mechanization has itself been powerfully shaped by the
capital-labor relation and the class struggle. It is no accident that
investments in improving technique are, under capitalism, "biased" to
such a great extent toward investment in machines as opposed to
investment in human beings. Capitalists are anxious to avoid, if at
all possible, increasing the bargaining power and autonomy of their
workers by endowing them with increased skill, and, by the same
token, surely pursue de-skilling to the extent feasible. Given,
moreover, the freedom of the labor market, capitalists are obviously
afraid that workers in whose skills they invest will move to another
firm. The fact remains that capitalists are sometimes obliged to
invest in their workers' skill and education, because this is the
most effective way to cut costs, so as to increase profitability and
survive in competition. In any case, however they cut costs (by
improving their control over the labor process or by improving
technique, by de-skilling or by re-skilling), the exigency to which
they are responding is the need to remain competitive.

The foregoing point can be put more generally.10 On the one hand, it
is impossible to derive the law of capital accumulation merely from
the existence of wage labor alone. On the other hand, the tendency to
invest surpluses and innovate is inherent in economies structured by
social-property relations in which the direct producers have been
rendered dependent upon the market by their separation from the means
of subsistence, even if they have yet to be proletarianized by their
separation from the means of production.   (Brenner,
<http://www.monthlyreview.org/1299bren.htm>)   *****

In my opinion, both class struggles & market competition play roles
in determining the downturns & upturns of the mature capitalist world
economy (while at the origin of capitalist social relations, one must
look to class struggles, for the discipline of capitalist market
competition is a result -- not the cause -- of capitalist social
relations), so this isn't the question of "which side are you on?"

See also John Bellamy Foster, "Is Overcompetition the Problem?," at
<http://www.monthlyreview.org/699jbf.htm>; and David McNally,
"Turbulence in the World Economy," at
<http://www.monthlyreview.org/699mcnal.htm>.

Yoshie

P.S.  If we can conduct debates here in the spirit that Brenner,
Foster, & McNally do on this subject, that is, treating disagreements
as those _among comrades_, as opposed to those _among mortal enemies_
(one side for capitalism & imperialism, the other against them),
we'll raise the level of discourse here, as well as practicing the
lesson of love & tolerance you draw from Bhaskar.





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