[OPE-L:8498] Brenner in LRB

From: rakeshb@stanford.edu
Date: Sun Feb 23 2003 - 15:32:12 EST

Can't remember whether this was already sent to OPE-L

[OPE-L:7999] Brenner

From: Rakesh Bhandari (rakeshb@stanford.edu)
Date: Wed Nov 13 2002 - 14:14:59 EST 

I attended Robert Brenner's lecture at a Berkeley bookstore last 
night. Fact filled and well organized and extremely thoroughly 
argued, Brenner's lecture held the non academic audience in rapt 
attention  for close to two hours.

Before I raise a few questions, just a few highlights from Brenner's 
argument (I assume that most know of his novel explanation for 
falling rate of profit the tendency to which is based on the severity 
of international competition rather than a rising OCC or enhanced 
worker power and the countertendencies to which include currency 
devaluation and wage repression):

*most recent corporate crimes have been perfectly legal, e.g., 
companies could defraud the public because of the often 
enormous gap 
in pro forma earnings which they report to the public and GAP 
earnings which they report months later to the SEC. RB 
that the gap did not hold just for fly-by-night start ups but for the 
grey eminences of NASDAQ--Cisco, Dell, MSFT, Intel.

*RB argued that Greenspan, though probably aware that actual 
profitability had peaked in 1996,  fed the bubble because he hoped 
that it would make it easier for companies to raise capital and 
restructure on easier terms. Which in fact did lead to an 
boom, which in turn led to productivity and wage advances. But 
profitability was still falling on new investments, so that there was 
in fact no financial justification for further investment. Which 
meant that a whole new layer of overcapacity was added to the 
no where more so than in telecom which has now lost almost 
95% of its 
market capitalization. More than 700,000 workers were laid off in 
telecom industry in one year while it took the US auto industry two 
decades to release 500,000 workers.

*RB put forth in absorbing detail the extent of insider and 
investment fraud during the bubble. Which led to one audience 
plaintively wondering how his pension fund managers who were 
putatatively looking out for his long term could have been so 
up in the hype when little to no profit growth and often profits 
themselves had been reported by the overwhelming number of 
high tech 
companies whose astronomical market caps should have been 
evidence that a bubble had formed. RB did not say what 
percentage of 
IPOs are now trading below their offering price, if still trading at 
all. I remember Intel Founder Andrew Grove saying in press that 
IPO market was proof of the democratization of the venture capital 
business as it allowed the mass of people to make bets on future 
technological stalwarts; of course what IPO's did was transfer 
capital to insiders and investment banks in what amounted to a 
massive expropriation of the small investor.

*In question and answer RB made some provocative claims about 
nature of US foreign policy towards Iraq which tied in to his 
analysis of how profound the underlying problems are in the US 
economy. But I'll save that for another post.

Here are a couple of empirical questions:

+If the Plaza dollar devaluation helped the US to recover market 
share and boost profitability, why hasn't the reverse Plaza Accord 
helped Japan in the same way? Moreover, does Brenner think that 
profitability hit its peak in 1996 because the post 95 strong 
dollar--both an engineered and natural consequence of recession 
elsewhere--came to bite on US profit growth?

++In terms of RB's own theory, shouldn't have the 2 year credit 
crunch led by now to the bankruptcy of enough high cost/low profit 
capacity that the conditions for a new boom have been created? 
Moreover, since the debt which was incurred was so cheap, will 
interest payments prove unmanageable if there is some 
resurgence in 
profit growth to which tech led increases in productivity and 
efficiency (reduced circulation costs as a result of on line buying, 
massively reduced telephony costs, better inventory management, 
will contribute?

And here are a couple of theoretical questions:

+If capital is existentialy the appropriation of unpaid labor time, 
won't major crises in the functioning of the capitalist system tend 
to have resulted from difficulties in said appropriation, that is, in 
capital's inability to attain a sufficient rate of exploitation in 
the abode of production? And doesn't Brenner's focus on the 
horizontal relations of production--that is, competitive 
intercapitalist relations of production--obfuscate the vertical 
relations between capital and labor?

++Doesn't Brenner's argument that with a constant real wage 
change  only results in a declining average rate of profit with a 
defacto relapse in the productive forces depend on the 
assumptions of 
bourgeois equilibrium economics, viz., input=output prices as in 
comparative static Okishio Theorem, now repudiated by its own 
Wasn't it Marx's intention to demonstrate the the development of 
productive roces would increase difficulties in the appropriation of 
unpaid labor time even with a rising rate of exploitation? Didn't 
Marx intend to show how those difficulties would then lead to 
intercapitalist competition, a termination of co-respective 
competition and a breakdown in the global fraternity of capitalist 
brotherhood? Yet if one makes competition and international 
competition in particular  explanatorily fundamental, then 
and intl capitalist coordination may succeed in stabilizing the 
system. National protection of markets may also be stabiizing. But 
Marx wanted to show why all truces could only be temporary.

All the best, Rakesh

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