[OPE-L:6881] Re: Re: Re: Re: Re: Re: Iraq

From: Cyrus Bina (binac@mrs.umn.edu)
Date: Wed Apr 03 2002 - 15:23:46 EST

Dear Rakesh,

Just briefly, for now:  The Marxian question of the decline in the profit
rate is a tendency, which meets its counter-tendencies in the formation of
new 'value' over the cycles of production.  This is at the heart of Marx's
crisis theory.   This is totally different from the so-called long-term fall
in the rate of profit that is so popularly debated these days.  I think the
origin of this latter approach is in Smith and Ricardo.  See, for instance,
Ben Fine, Theories of Capitalist Development. 1981.



----- Original Message -----
From: "Rakesh Bhandari" <rakeshb@stanford.edu>
To: <ope-l@galaxy.csuchico.edu>
Sent: Wednesday, April 03, 2002 11:47 AM
Subject: [OPE-L:6875] Re: Re: Re: Re: Re: Iraq

> Paul C writes in 6871
> >
> >If one views things sufficiently abstractly all states are class
> >to say that the whole world is submerged within the social relations
> >of capital is in anycase not true even at the economic level.
> >What proportion of the worlds working population are wage labourers?
> One way of understanding capital as a global relation is to focus on
> the establishment of prices at production at the level of the world,
> rather than any national, market.
> For example, Grossmann wrote in 1929:
> "In effect price formation on the world market is governed by the
> same principles that apply under a conceptually isolated capitalism.
> The latter anyway is merely a theoretical model; the world market, as
> a unity of specific national economies, is something real and
> concrete. Today the prices of the most important raw materials and
> final products are determined internationally, in the world market.
> We are no longer confronted by a national level of prices but a level
> determined in the world market. In a conceptually isolated
> capitalism, entrepreneurs with an above average technology make a
> surplus profit (a rate of profit above the average) when they well
> their commodities at socially average prices. Likewise on the world
> market the technologically advanced countries make a surplus profit
> at the cost of the technologically less developed ones. Marx
> repeatedly draws out the international effects of the law of value.
> For instance, he says, 'most agricultural peoples are forced to sell
> their product *below* its value whereas in countries with advanced
> capitalist production the agricultural product rises to its value. "
> As I understand Cyrus' argument, such a global relation was not in
> fact fully developed until the 1970s.
> That is, until about 1970 the price of oil was basically determined
> by monopoly capital that then enforced that price on a global scale.
> For Cyrus--as I understand him--both imperialism and monopoly capital
> break down and the price of oil comes to determined in and through
> world-wide competition (the OPEC countries as landlord govts also
> become more effective in seizing rent the magnitude which is
> determined by the price set in and through global competition, with
> spot markets playing a leading role). Oil was the first industry to
> come under the global social relation. I believe that this is what
> Cyrus is arguing.
> Without realizing it, Robert Brenner seems to have raised recently
> the same problems that Cyrus already had.  Brenner's argument for
> example can be read as claiming that prices of production had been
> formed within regional/national blocs until the late 60s; then as
> Japanese and German production entered the global market, there was
> a period of prolonged crisis from which emerged  a structure of
> global prices of production which immediately benefited the higher
> productivity producer nations (Germany, Japan which had successfully
> built on a superior technological foundation) at the expense of the
> lower productivity ones (the US).
> However, the US competitive responses  (currency devaluation, wage
> repression) prevented the exit of the capital that was inefficient in
> terms of the new global prices of production, and this insufficient
> exit then had the effect of bringing the rate of profit down in the
> system as a whole.
> Of course there has been a lot of argument that this analysis cannot
> hold at the micro-logical level, and I have not presented it well
> either.
> But if in fact prices of production are established at the global,
> rather than the national level, then why are we interested in so
> called national profit rates at all?
> All the best, Rakesh

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