Re: (OPE-L) Re: Historical Explanation and Systematic Dialectics

From: Rakesh Bhandari (rakeshb@STANFORD.EDU)
Date: Fri Mar 26 2004 - 11:42:45 EST

I think it would be better if you chose select points and made them succinctly.

Brenner himself says the proximate cause of the long downturn was a
fall in the rate of profit; the question is how he explains it. You
don't show that the intra capitalist conflict could have by itself
caused a fall in the rate of profit the long downturn. Nor do you
show that any of your other factors can account for it.  Moreover, as
I have argued many times, Mattick  never argued that capitalism
suffers from only one contradiction as manifested in the falling rate
of profit--there could be and are crises from other economic causes
(underconsumption and other kinds of disproportionality) and
political causes. The theory of the falling rate of profit was meant
as an  explanation of a protracted global slump which itself gives
rise to political conflicts,

>Hello Rakesh.
>>  No, the argument is that competition tends to become fraticidal and
>>  crises protracted rather than solveable through a simple
>>  redistribution of capital only when accumulation has come to founder
>>  on a shortage of surplus value in the abode of production though said
>>  shortage manifests itself as a surplus of commodities in the realm of
>>  circulation (Mattick, 1969, 1981). Inter-class competition (sic:
>>  should it not read intra class competition?) cannot in itself explain
>>  a a protracted downturn in which competition has become fraticidal.
>When examining the causes for a world economic crisis, we have to
>grasp the world market "in which production is posited as a totality
>together with all movements, but within which, at the same time, all
>contradictions come into play." (Marx, _Grundrisse_, Penguin, p. 227).
>This means, among other things, that we must grasp capital and the
>(nation-) state as diversity on the international level.  This requires
>that we grasp foreign trade and, furthermore, ALL of the contradictions.
>To grasp ALL of the contradictions related to a specific historical
>event requires that we also grasp all of the relevant _contingent_
>contradictions.  To take an abstract tendency, such as the LTRPF,
>and assert that it _must_ be the cause of a _particular_ economic
>crisis is exactly the sort of  [reductionist] problem that Tony warned

No one is saying that falling profit rate is the cause of all
particular crises.

>  One can not assume in examining a particular historical crisis
>that class conflict between capital and wage-labour is -- 'ultimately' or
>otherwise -- the cause.


>You assert that it has been 'demonstrated' that a 'prolonged' economic
>crisis can not be caused by (contradictions associated with) capitalist

I am also saying that Brenner recognizes as much. He too ultimately
points to a rise in the real wage, though as Shaikh notes there is no
quantitative proof that there was a rise in the real wage that could
account for the magnitude of the fall in the profit rate.

>  By inference, you are suggesting that any factor which is
>not a direct expression of the class struggle between wage-labour and
>capital can not be the primary causal force behind a 'protracted'
>economic downturn.

Yes general crises require not a simple redistribution of capital but
the devaluation of capital as such and a rise in the rate of
exploitation of the working class as a whole. Classical economics
denied that a general crisis could be caused by contradictions within
the abode of production itself.

>In what follows, I will present a number of causes of a potential
>world-wide economic crises which are hypothetical in nature. All
>of the examples have in common the positing of a _primary_ causal
>force for a crisis which is _not_ class struggle between capital and
>wage-labor.   The intent is to show by example that what you have
>asserted to have 'demonstrated' is erroneous.  While these
>examples are hypothetical, they are none the less expressions of real
>material, social processes that could _in fact_ trigger a capitalist crisis.
>1.  Capitalist Competition: Cartelization
>The oil industry was once ruled by an international cartel and, if
>conditions change, a cartel could re-assert itself as a global
>economic force.  If there is 'cartel solidarity' and unity in action,
>then the cartel could multiply the price of crude oil by several-

So you disagree with Cyrus' arguments against cartelization?

>  This would then dramatically increase the costs of production
>for all firms since the rising price of oil would increase the cost
>of all oil derivatives (such as plastics and fiberglass) which can
>be both final output and/or elements of constant circulating capital.
>As the costs of production go up, firms could increase prices and
>inflation would likely result.  Yet, there is no mechanism  to assure
>that consumers will now be able to afford to pay higher prices.
>Say's Law does not hold.  This could set in motion a series of
>events that would result in a prolonged world-wide economic crisis
>-- even though one section of the world capitalist economy (in
>nation-states where the cartel is based) could prosper.

It can demonstrated that a rise in the price of oil was not the cause
of the mid 70s downturn. In the second slump Mandel did argue against
this essentially Ricardian theory of general crisis.

>2. Boycotts and Trade Sanctions
>a) A consumer boycott of French and E.U. commodities in the
>US is launched -- with or without the support of the US
>government.  If the movement -- which would be an expression
>of nationalism rather than class conflict -- is largely successful,
>it can be expected that citizen-consumers in other nations will
>likely boycott commodities produced in the US.  As this
>process continues, one can easily envision a protracted world-wide
>economic crisis.

Again beggar thy neighbor policies may well compound a global crisis.
But the breakdown in cooperation itself has material causes.

>b) The US government decides to levy a special tax on
>imported goods to help pay for US military interventions which,
>it claims, benefit the rest of the world.  Even though this would
>be a violation of international law, that has not stopped the
>US government before on numerous occasions. Other
>countries might respond by levying tariffs on commodities produced
>in the US.  Of course, the US government would have anticipated
>retaliation when they levied the tariff but they might  have believed
>-- on balance -- that they might gain more than they would lose.
>Events could demonstrate that they miscalculated.  Again, this
>competition among capitalists and  nation-states could result in a
>prolonged period of economic crisis.

Sure this could happen but such destructive competition is more
likely to obtain in the conditions of a global slump rather than
itself being the cause of it.

>3.  War
>It's true that there have been historical examples of war among
>capitalist nations promoting the accumulation of capital and growth.
>One could, however, envision circumstances in which wars could
>trigger a prolonged economic crisis.  E.g.
>-- A nuclear exchange between India and Pakistan; or
>-- A nuclear exchange between N. Korea and the USA; or
>-- A nuclear exchange between Israel and Iran; or
>-- The US uses WMD when invading a country in Latin
>      America.
>While it may be the case that class conflict was the underlying
>factor that led to these wars, it could be the case that it was not.
>Nationalism, after all, is a very strong force in the world and
>nationalism can lead to actions which could be viewed as
>'irrational' and undesirable from the perspective of  _world_
>capitalist class interests.
>One could expect de-accumulation as a consequence as the
>'investment climate' and stability  in  international markets would
>likely be severely undermined.  I.e. having observed these events,
>capitalists might likely anticipate further conflict and instability
>and withhold funds for accumulation in the presence of heightened
>international uncertainty.

These were not the causes of the long downturn that Brenner is trying
to explain.

>4.  Religious Fundamentalism
>One could envision a coalition of many different nations which
>are united by Islamic fundamentalism which could decide not to
>sell or buy any commodities from 'the West'.  This would close
>off entire sections of the world from imperialist investment.
>While it could be expected to lower the standard of living in the
>nations imposing the boycott, it could nonetheless be done and
>perhaps in some regions (if popular perceptions change) be
>popular.  Yet, it would also likely push the world capitalist
>economy into a prolonged economic crisis.

Nor was this.

>5.  Other Contingencies
>A new plague -- whether manufactured in the laboratory or naturally
>occurring -- could spread out of control throughout the world.  Even
>if nations closed off borders (which itself would severely impact
>world trade) it might not be stopped.  Of course, this might have
>nothing to do with the LTRPF (or its counteracting factors) or
>class struggle between capital and wage-labour but it could
>nevertheless trigger a prolonged economic crisis.

Perhaps the destruction of public health could have something to do
with the LTRPF>

>I have thus demonstrated that any 'demonstration' which alleges
>to show that only the class struggle can be the primary cause of
>a particular economic crisis is manifestly false.

Please, Jerry, if you are going to invent strawman, invent new names
for them. Don't use my name.

>   Any specific
>economic crisis must be analyzed concretely and all of the
>relevant contradictions and causal factors must be examined
>to ultimately locate primary cause.  We can not _a prior_ know
>what that primary cause is for a specific crisis based on abstract
>theory and assertions of theoretical primacy that are derived from
that abstract theory.
>>  I immediately made this argument on LBO-talk in response to Brenner's
>>  NLR book upon its publication. Werner Bonefeld made a similar
>>  argument.
>Yes, Bonefeld comes from a tradition which privileges class struggle
>to the exclusion of other causal factors.

The point remains that class relations though manifested in things
and prices are not just another causal factor.

>>  The inability of intra capitalist competition in itself to
>>  explain a protracted downturn has been demonstrated by several of
>>  Brenner's critics. Ultimately Brenner explains a depression in the
>>  profit rate as a result of a rise in the real wage, though he insists
>>  that the real wage does not rise as a result of working class
>>  militance. That is, Brenner himself does not ultimately explain the
>>  long downturn as a result of simply intra capitalist competition; he
>>  too turns to a change in the real relationship between capital and
>>  wage labor in the division of net product.
>If Brenner 'ultimately' grounds the current economic downturn in
>the  struggle between capital and labour then all of the efforts by
>Brenner's critics to 'demonstrate'  that competition can not 'in itself'
>cause  a protracted downturn were misplaced.

How does this follow?

>   A classic 'straw
>man' type argument by the critics of Brenner.

What are you saying here? Why don't you spend time actually
developing your criticism of what I wrote rather than attacking

>In solidarity, Jerry

This archive was generated by hypermail 2.1.5 : Sat Mar 27 2004 - 00:00:02 EST