[Marxism] The fetishism of reproduction (was: RE: Future Currents)
sartesian at earthlink.net
Tue Jul 29 15:53:47 MDT 2008
Let's parse the parse, with the moderator's and Les' indulgence....
----- Original Message -----
From: "Joaquin Bustelo" <jbustelo at gmail.com>
To: <sartesian at earthlink.net>
Sent: Tuesday, July 29, 2008 3:34 PM
Subject: [Marxism] The fetishism of reproduction (was: RE: Future Currents)
I continue the debate on oil prices and economics more generally, taking up
"2. We are not living in a world of supply and demand. Or more correctly,
we are living in a world where supply and demand are socially mediated
products of the world we live in, which is a world of wage labor and
capital. The governing factor of supply and demand is the reproduction of
the exchange of capital and wage-labor, its reappearance as profit.
Consequently, it is my contention that price inflation has to be analyzed
according to how it functions in the appearance and apportionment of profit.
Speculation too is socially mediated, and is the product, not the producer
of the success or failure in the reproduction of profit."
I don't know exactly what this means. It looks like a word salad to me, with
a lot of unnecessary garnish.
For instance, what does it mean to say that "supply and demand are socially
mediated products?" Sure, supply and demand are social, not mineral or
extraterrestrial. The ENTIRE ECONOMY is "social". So why muddle things up
with "mediated"? And what does calling them "products" add to our
A. sorry you can't grasp it, but that does not make it invalid. Supply and
demand do not exist extraneous to the property organization that determines
the presentation of supply and demand in the markets. That's what social
mediation means. There is no supply and no demand that will be satisfied
absent the necessary profitability.
You clearly present supply and demand as "physical" quantities, mere
functions of use, and the production of use-values, the demand "growing" in
the need or use of oil, when the "supply" can't grow because external
physical limitations. The current and past evidence is quite clear that
increases in production have matched and surpassed increases in consumption.
You say this is a world of wage labor and capital. Quite wrong. The
FIRST thing to note as materialists is that this is a world.
Made, not of labor and capital, but of matter in the liquid, solid and
Another full stop.
Labor and capital exist in societies on this world's biosphere, not
independently of the material world or the biosphere.
B. Sorry again, if you can say "supply and demand," chalking everything up
to this tweedledum and tweedledee of bourgeois political economy, I can say
wage-labor and capital.
Nothing in existsence exists independent of the "biosphere" but nothing
that is produced under capitalism escapes the determinants ( 4 syllables,
means governing factors) of commodity production.
>From his world of [abstract] labor and [abstract] capital, Sartesian
catapults to: "The governing factor of supply and demand is the reproduction
of the exchange of capital and wage-labor, its reappearance as profit."
If this reproduction sentence means anything, it is simply a high-falootin'
way of repeating the old cliché that GM isn't primarily into producing cars,
they're into producing profits. Like every other capitalist. And the same is
true of Coca Cola. But much as it might want to, Coke can't make any money
producing cars and GM can't make any money putting sugar into water (and
sometimes not even that in Coke's case) because Coke doesn't have any car
plants and GM doesn't have any bottling plants. And neither can make any
money producing grumph, as neither has grumph plants (I'll come back to the
crisis of profitability in the grumph sector in a moment).
By going stratospheric into the realms of completely ABSTRACT capital and
ABSTRACT labor, Sartesian leaves behind all specific, concrete sources of
raw materials, production facilities, distribution networks and end
products. They're all way below us on the ground. But for that very reason,
his "contention that price inflation has to be analyzed according to how it
functions in the appearance and apportionment of profit" is absurd if one is
talking about prices for specific commodities. At the level of abstraction
we have risen to, there are NO concrete products, just the abstract
"commodity" produced by abstract labor hired by abstract capital, and which
therefore CANNOT HAVE a concrete, down to earth, quantifiable price.
C. Methinks the gentleman protesteth too much, and is trying to accuse me of
the very crime he has committed. I believe I concretely pointed to the lack
of "unexceptionalism" in the growth of the "demand" for oil in this century.
I believe I concretely pointed to a matching, if not over-matching, growth
in production. I believe I concretely pointed to the rates of return for
the oil industry; I concretely pointed to the lack of increase in lifting
costs; I pointed to the failure of the peak oil "offset" theory between
declining reserves and declining production. And I concretely pointed to
the oil companies reduction in capital spending over the years, hoarding and
distributing cash. I believed I concretely pointed to the fact that the
petroleum majors hold leases for exploration onshore and offshore, an no
exploration has been undertaken on 80% of the territory covered by those
You concretely pointed to..... what? Peak theory? Notions of supply and
In other words, Sartesian, you've taken things to such a level of
abstraction that you forget the obvious. The REASON for the problems with
the reproduction of capital in the grumph sector is that GRUMPH DOESN'T
And neither, it appears, does the capacity RIGHT NOW to pump more oil of the
specific types and characteristics that can be most easily accommodated by
the really-existing crude oil market, which is an industry that, for
example, has a lot of refineries that can't handle the higher-sulfur "sour"
crude Saudi Arabia says it is willing to pump more of.
To handle it, those refineries would need an extensive retrofit that would
take years and cost millions of dollars.
D. How about some facts to back up some of your GRUMPH? How about some
facts on refinery runs, refinery profit margins, grades of crude contracted
for specific refinery runs. How aboust something concrete?
My "contention" is that since the oil capitalists were happy as pie to sell
as much in petroleum products as anyone wanted at $30/barrel price levels,
they're even MORE overjoyed, positively orgasmic, to sell the same stuff for
four times as much four years later. And the fact that the oil giants are
currently enjoying the highest profits ever for any corporations in the
entire history of the human race suggests that at the level of the oil
industry, there's no extreme shortage of profits, no lack of the
reproduction of capital.
E. You really need to look at rates of return in the industry from at
least1968 on. The issue of reproduction isn't only an issue of the
reproduction of a MASS of profits; it is an issue of reproduction of that
mass at a sufficient RATE.. So we really need to look at historical
spending patterns, investment rates, return on investment rates, costs of
production, and market prices before we make an assumption (to assume, as a
past drill sergeant liked to say to me, between push-ups, to make an ASS out
of U and ME) about the willingness, joy, and of the oil capitalists to
expand production and, as history has shown them, drive the rate of return
into the MID and LOW single digits.
Consider the apple tree. ONE apple tree. Some fruit is lower on the tree,
some is higher. Is it really reasonable to assert that there will be an
infinite supply of low-hanging fruit?
F. I love the homey touch. It makes everything so clear. I mean, let me
get out my pen-knife and start whittling away as I sit here next to the
cracker barrel (is the barrel half-full or half-empty). I apologize for
that bitter of sarcasm, but I think it's pretty well within the range you
Anyway. Well, we know we have one apple tree. And we have historical
records of millions and millions of apple trees. And we know how much it
can produce. AND BECAUSE IT CANNOT PRODUCE ENOUGH COMMODITY, USE-VALUE
WRAPPED WITHIN EXCHANGE VALUE IN ITS "NATURAL STATE, REPRODUCE PROFIT
QUICKLY ENOUGH-- we do what? We farm. We employ means of production
and wage-labor to increase the production of apples, to improve the quantity
of apples (and quality of apples) and the means of circulation to get them
to market, and all of this will make the cost of an apple fall. And when
that very act of "development" compels the rate of profit to fall? Have
the apple trees failed to produce enough apples. Are all the low hanging
apples all gone?
When the harvest remains unpicked, and the fruit is left to rot, and the
trees are no longer tended, has the world run out of apples.
But I know, oil is a fixed quantity, incapable of augmentation and
reproduction. Not so. Known, proven reserves have increased over time,
even since the time of the last oil giants. Recovery rates have improved.
And most importantly the fixed quantity of oil, in its entirety is not
Now it just so happens that Brazil has discovered what looks like could be
HUGE oil deposits but to get to them you need to go down through thousands
of feet of ocean and then drill thousands of feet below the ocean floor. How
expensive is that? Nobody is really sure, but a frequently cited guesstimate
is $100-$120/barrel. A lot of the technology to be used needs to be
developed -- for example, how to keep an untethered oil platform over the
same spot of ocean floor, or alternatively, how to anchor a rig so far from
the ocean floor.
G. Let's be clear comrade. Oil was discovered, that could be of huge
quantities. The problem is what-- supply and demand? Or is it profit and
the existing and possible cost of the means of production?
Now, if someone could GUARANTEE the oil industry that some huge new more
easily accessible deposit won't be discovered tomorrow, probably investments
like that wouldn't be such a crap shoot from big oil's point of view. But no
one can guarantee that. Nor can they guarantee that there won't be some big
economic slowdown that will send demand and the price plummeting, or some
technology breakthrough or change in social behavior that will lead to the
H. Again, abstraction, supposition, speculation, classically bourgeois
economist risk assessment theory.
But what is interesting are the factors you put into the risk: not those of
the biosphere you allude to earlier with hurricanes, and storms, etc. But
the risks are a big economic slowdown that will send demand and the price
plummeting, or some technology breakthrough or change in social behavior.
I'm sorry, you stole that from me. Give it back.
And I think I just said all I needed to say, since you said it too.
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