[Marxism] Fwd: Richard Wolff and the deepening crisis | Michael Roberts Blog

Ralph Johansen mdriscollrj at charter.net
Fri Jun 3 12:15:11 MDT 2016

    Louis Proyect wrote

    For Wolff, the “classic contradiction” of capitalism is that
    capitalists “paid insufficient wages to enable workers to purchase
    growing capitalist output” (p166). But the main contradiction, in my
    view, lies not in ‘insufficient wages’ but in Marx’s law of the
    tendency of the rate of profit to fall. This tendency can for
    periods (sometimes long) be counteracted by more exploitation and
    new technology, but it eventually operates to drive down
    profitability and total profits, leading to a collapse in investment
    and then incomes and employment.

    This explanation is entirely missing in Wolff’s book. Wolff’s five
    reasons for the Long Depression are true only because they describe
    the nature of the current low-growth world, but the explanation lies
    with continued low profitability (near post-war lows), a failure to
    reduce debt levels and the failure of business investment to recover
    as a result. It’s not too much cash and capacity but too little profit.


This is what Michael Perelman has to say about this [at Left Forum 2016, 
Marxist Laws of Motion & Today s Economic Collapse 
https://www.youtube.com/watch?v=xTg7fCh8u1M at 28:22]:

"I think that what he [Marx] wrote is so kaleidoscopic, so deep, so 
intense, that he is very, very difficult to understand. Then we get to 
the idea of the laws of motion. The problem with the laws of motion is 
it was a very good idea, but it creates a temptation where academic 
people want to reduce Marx down to some sort of algebra. How many hours 
have been wasted trying to solve the transformation problem? How many 
people have tried to figure out the mathematical explanation for the law 
of the falling rate of profit? Of course, Marx never had a law of the 
falling rate of profit, but Marxists do. And they waste their time and 
our time on these proofs. He had tendencies, and that's fine. But it 
wasn't a law that would command people to mathematize economics."

Later, Bertell Ollman responds [at 1:21:38]: "I'd like to say a word 
about Marx's laws of motion and tendencies. There are no differences. 
There are no differences. Marx says in a couple of places that by "law" 
he means "tendencies". And you find in Marx that other outcomes can come 
about than what seems to be a "tendency",... where he gives you a whole 
series of what he calls "counter-tendencies", which is a way of showing 
that these tendencies are sometimes stronger than they are at other 
times, and so, when they are, the word "law" is more appropriate, and 
when they're not, the word "tendency" is. And that suggests, of course, 
that other outcomes can come about than what seems to be a tendency, and 
what we've had today

[referring to what Hudson has said, that

    "America has taken off into a higher and higher level of debt in
    relation to government income, of family income and of corporate
    income, and I think we've finally reached the limit. And I think
    we're now in what used to be called "the final crisis. "The final
    crisis" is when the environment can't continue along the laws that
    it's been doing. It can't restore the status quo ante because
    there's only one way to restore equilibrium, and it's not a
    self-stabilizng, an automatic stabilizer. If the problem is the
    credit system taking more and more personal income, for mortgage
    debt, student loans, for bank loans and the credit card debt, the
    only way that you can restore equilibrium is to wipe out the debt to
    the financial class ... the exponential growth of finance overcomes
    the ability of the economy to produce a surplus in order to pay the
    debt ... it's merging with industrial capital, but it's going to be
    subordinate to industrial capital, because that's what capitalism
    does: it subordinates all these preexisting modes of production,
    existing laws of motion. But instead of finance being
    industrialized, industry is being financialized, as Michael just
    said. So, this is something that Marx would not have expected. He
    thought that capitalism was going to move forward towards socialism,
    but it's not moving towards socialism. And if it's not  moving
    towards socialism, where is it moving. You can call it fascism or
    barbarism, but it's certainly not moving towards socialism as part
    of the industrial process, because when finance capital takes over,
    it's downsizing, it's outsourcing, its way of making money is the
    bubble economy, using debt leverage to increase the price of stocks
    and bonds. This is not real wealth, this is not tangible wealth.
    this is not a means of production. Stocks, bonds and bank loans are
    not means of production; they're financial claims on production ...
    And that's the problem. That dynamic has a closer kinship to
    feudalism and to the ancient mode of production than it does to
    industrial capitalism. So, industrial capitalism failed, and the
    revolutionary task that Marx set for us was to free ourselves from
    that mode of production. And it ended up not freeing itself and
    being overcome by  (financial capital) ."]

is clearly some outcomes which are different from what Marx thought were 
most likely to come about, certainly by the time in which we're living 
and talking here today. So, I think that this is the way to look at 
this, and then of course, if the outcome is different from what Marx 
expected, I think that more than one of the different ways of labeling 
it, the language used to express it, is appropriate, depending on what 
aspect is occurring and being developed and emphasized. I don't see that 
much difference in what the different labels that people want to give to 
what's happening in our period."

And then it remains to explain why a description of these laws or 
tendencies is important in analyzing what are characterized as the laws 
of motion of capital. I would say that if you don't have an accurate and 
more complete  map then, as has been well said, any direction would 
serve; that is, under-consumption explanations, for instance, as opposed 
to the tendency of the rate of profit to fall, lead to the assumption 
that by raising wages you induce re-investment.

This email has been checked for viruses by Avast antivirus software.

More information about the Marxism mailing list