[Marxism] Financial crisis not related to overaccumulation
spalmer999 at yahoo.com
Mon Dec 8 20:34:37 MST 2008
Of all the cases Heartfield could have chosen to illustrate supposed 'subjectivism' (aka psychologism), he made an unfortunate choice.
There is absolutely nothing novel about the burgeoning of finance and its attempts to distance itself from capitalist production. The case of the money market is *precisely* the one which Engels uses in his classic letter to Schmidt (Oct 27 1890) about historical materialism to discuss the relative independence of certain social developments from production - without ever having to resort to a deus ex machina or any form of idealism.
His account of the reception of Mattick's 'Marx and Keynes' is ignorant - it was one of Merlin Books' Book Club choices and was widely read and debated on the British left in the '70s. Mattick remarks:
'A depression may “sneak” into existence by a gradual slowing down of economic activity, or it may be initiated by a dramatic “crash” with sudden bank failures and the collapse of the stock market. The crisis itself is merely the point at which the reversal of business conditions is publicly recognized. ... Even the last phases of the boom preceding the crisis are, viewed in retrospect, already unprofitable; but recognition of this fact has to await the verdict of the market. Commitments made on the assumption of a continuous upward trend cannot be met. The conversion of capital from commodity to money form becomes increasingly more difficult. The crisis of production is at the same time a financial crisis. The need for liquid funds and the attempt to avoid losses intensify the fall of securities and commodity prices.' p84.
As for copy-editing Grossman, Heartfield seems to have skipped several pages, at the end of Chapter 3, where Grossman clearly, if briefly explains how the expansion into finance is actually a consequence and symptom of overaccumulation!
'I have shown how the course of capital accumulation is punctuated by an absolute overaccumulation which is released, from time to time, in the form of periodic crises and which is progressively intensified through the fluctuations of the economic cycle from one crisis to the next. At an advanced stage of accumulation it reaches a state of capital saturation where the overaccumulated capital faces a shortage of investment possibilities and finds it more difficult to surmount this saturation. The capitalist mechanism approaches its final catastrophe with the inexorability of a natural process. The superfluous and idle capital can ward off the complete collapse of profitability only through the export of capital or through employment on the stock exchange.' p 191 and so on for pages.
As an alumni of the RCP, Heartfield seems to have forgotten, probably for good reason, 'RC Papers' tedious attack on Yaffe and Bullock's 'Inflation, the Crisis and the Post-War Boom'.
There, several pages (22-26) describe in detail exactly the evolution of the financial crisis showing how it comes about precisely because of the constraints imposed by overaccumulation! Although developed to explain the limits on state expenditure (since Keynesianism was still the dominant economic ideology) the article is virtually a tutorial on the relationship of Marx's theory of credit to his theory of overaccumulation, and can readily be used to understand the current financial crisis.
Heartfield is clearly well aware of these three sources which refuted him in advance. Yet he either fails to mention them or gives the impression that they don't address the issue of the connection of the financial crisis with overaccumulation.
So, on these long cold dark winter nights, drawn up a chair close to the fire, pull down volume three and take another gander through parts 4 and 5, perhaps with some help from Yaffe and Bullock, the latter end of Grossman's chapter 3, and Mattick's analysis of the Great Depression, all conveniently online ... and reassure yourself that things are undoubtedly going to get worse - thanks to the overaccumulation of capital, not to the fleeting whims and tastes of capitalists.
--- On Mon, 12/8/08, Louis Proyect <lnp3 at panix.com> wrote:
> From: Louis Proyect <lnp3 at panix.com>
> Subject: [Marxism] Financial crisis not related to overaccumulation
> To: "Steve Palmer" <spalmer999 at yahoo.com>
> Date: Monday, December 8, 2008, 11:46 AM
> (Interesting piece by Spiked online's token Marxist)
> Living Marxism
> James Hartfield December 2008
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