[OPE-L] Six book plan, foreign trade

From: Jurriaan Bendien (adsl675281@TISCALI.NL)
Date: Mon Sep 25 2006 - 15:03:31 EDT

>Why though? Why not study foreign trade from this theoretically
controlled perspective?

Just quickly, I suppose you can, but what for? Basically I tend to side with
Rosdolsky/Mandel on this issue, i.e. the *necessity* of crises cannot be
inferred from the reproduction schemes, only their *possibility*. Various
kinds of uneven or imbalanced development can occur.

As I've illustrated, each year, the net gain to the US qua "the capital
value of imported goods AND services" is nearly equal to the GDP of Italy.
Every year, chomp, there goes the GDP of Italy into the US. So you can say
that foreign trade in goods and services (disregarding for the moment some
other important capital flows) makes a rather large net contribution to US
capital accumulation, we're talking about a value of more than 10% of US GDP
here (a shelf dropped on my writing desk, crushing my calculator so I cannot
calculate the percentage easily - perhaps a sign from God to better my
ways!? Not being particularly superstitious, I tend to blame it on screws
which are too small and the condition of the wall...).

Marx's aim with the reproduction schemes is somewhat different from Quesnay.
Marx is specifically studying:

(1) the circulation of newly produced surplus value
(2) the modalities of the accumulation process,
(3) the general motion of total social capital,
(4) the components of the value of the gross product.

Marx is trying to show, that his theory of surplus value and capital
accumulation will also hold in the simplest/purest cases when the
reproduction and circulation of the total social capital is considered.

It's a very ABSTRACT and incomplete discussion, leading up to an analysis of
the reproduction and growth of the national income &product, which however
he did not write down beyond comments here and there (bear in mind he was
writing this about 60-70 years or so before the first national product
accounts were devised).

These days we would refer to national accounts, input-output tables,
flow-of-funds tables, and balance of payments data.

Marx comments methodologically for instance: "But we take it that the gold
mines are in a country with capitalist production whose annual reproduction
we are here analysing, and for the following reasons. Capitalist production
does not exist at all without foreign commerce. But when one assumes normal
annual reproduction on a given scale one also assumes that foreign commerce
only replaces home products by articles of other use- or bodily form,
without affecting value-relations, hence without affecting either the
value-relations in which the two categories "means of production" and
"articles of consumption" mutually exchange, or the relations between
constant capital, variable capital, and surplus-value, into which the value
of the product of each of these categories may be divided. The involvement
of foreign commerce in analysing the annually reproduced value of products
can therefore only confuse without contributing any new element of the
problem, or of its solution. For this reason it must be entirely discarded.
And consequently gold too is to be treated here as a direct element of
annual reproduction and not as a commodity element imported from abroad by
means of exchange."


"We revert once more in general terms to the objection raised against Tooke;
how is it possible that every capitalist draws a surplus-value in money out
of the annual product, i.e., draws more money out of the circulation than he
throws into it, since in the long run the capitalist class itself must be
regarded as the source of all the money thrown into circulation? We reply by
summarising the ideas developed previously (in Chapter XVII): 1) The only
assumption essential here, namely, that in general there is money enough for
the exchange of the various elements of the mass of the annual reproduction,
is not affected in any way by the fact that a portion of the commodity-value
consists of surplus-value. (...) 2) Every industrial capital, on beginning
its career, throws at one fling money into circulation for its entire fixed
constituent part, which it recovers but gradually, in the course of years,
by the sale of its annual products. (ibid.).

Generally, in Marx's discussion, two types of reproduction and circulation
are at issue: the reproduction of specific types of use-values (common to
all societies), and the reproduction of exchange-values, or more
specifically the reproduction of capitals and their components (which are
specific to a capitalist society, in which production of output is
conditional on capital accumulation). This is explicated more clearly by
Kozo Uno.

Engels (who was supposed to clear up Marx's manuscripts) commented that Marx
made an effort to revise Part III of Cap. 2 and compress it - in the end he
felt Marx said basically what he wanted to say, but his treatment was
sometimes "gappy" and "fragmentary". I don't have all that Marx wrote in
this regard available here. But it should be clear that no theory of capital
reproduction is complete without a consideration of credit and capital

I am not sure what you take Grossmann and Tony Smith to be saying (haven't
read Tony's book).

What I take Grossmann to be saying is that there is a logic to the
reproduction process of the total social capital, such that it must
inevitably lead to one specific disproportionality, i.e. excess constant
capital invested in production, depressing the average rate of industrial
profit (but various causal chains are conceivable that lead to such an

What I take Luxemburg to be saying is that imperialism grows necessarily out
of the conditions for the enlarged reproduction of capital, specifically the
realisation and capitalisation of newly produced surplus value (this is a
somewhat "economistic" interpretation of imperialism). Luxemburg does not
discuss the principle of comparative advantage at all, as far as I recall.
This principle anyhow became popularised mainly after World War 2, probably
because it seemed to show the benefits of foreign trade. But Luxemburg's
general definition of imperialism (start of chapter XXXI in The Accumulation
of Capital) is quite good.

Marx also doesn't really discuss Ricardo's theory of foreign trade very much
at all in the known manuscripts, except in relation to the balance of

There is as I recall:

(1) a fragment in the Grundrisse (relating more to monetary matters)
(2) the bits in Cap. 3 on foreign rate vis-a-vis the TRPF, and vis-a-vis the
national balance of trade and payments
(3) a few comments in TSV,
(4) some comments in journalistic articles.

Note here that Marx says in Cap. 3 re TPRF the additional question he raises
about foreign trade is "beyond the scope of our analysis", i.e. it really
belonged to the analysis of international trade. Ricardo had, he says,
"overlooked" the contradictory outcomes of foreign trade, and instead
suggested that economic harmony would result from foreign trade, i.e. the
trading parties would gain in equal amounts, at least in the long term.

The only directly relevant passage I know of in Cap. 3 is:

"What Ricardo fancies is mainly this: with the higher prices realised abroad
commodities are bought there in return and sent home. These commodities are
thus sold on the home market, which fact can at best be but a temporary
extra disadvantage of these favoured spheres of production over others. This
illusion falls away as soon as it is divested of its money-form. The
favoured country recovers more labour in exchange for less labour, although
this difference, this excess is pocketed, as in any exchange between labour
and capital, by a certain class. Since the rate of profit is higher,
therefore, because it is generally higher in a colonial country, it may,
provided natural conditions are favourable, go hand in hand with low
commodity-prices. A levelling takes place but not a levelling to the old
level, as Ricardo feels."
http://www.marxists.org/archive/marx/works/1894-c3/ch14.htm (the Pelican
translation is bettter).

I did not mean "Michel Husson" but "Michael Hudson", sorry typo. The
relevant work by Hudson is: "Trade, Development and Foreign Debt" (2 vols).
He discusses the evolution of comparative advantage/cost theories.

Carchedi criticizes comparative advantage/cost theories in his book "For
Another Europe". So does Robert Went, in his dissertation about
globalisation. Pierre Salama and Jacques Valier in France have also
commented on it (also from the export-led development versus
import-substitution angle). Theories of "unequal exchange" such as those of
Prebisch, Emmanuel and Amin are a direct critical response to the ideology
of comparative advantage/cost theories. I'm not really familiar with the no
doubt extensive Japanese Marxian literature on this.

My impression is that most of the conventional Ricardo-based (or
Hechsler-Oehlin) theories about the "gains from international trade" are now
in fact discredited among real economic policy makers, even although they
are still being taught as "economic wisdom" in universities and

As the World Bank says nowadays "Different policies can have the same
effect, and the same policies can have different effects, depending on the

International trade is supposed to be *beneficial to all*, and ideologically
Ricardian-type theory just seemed to provide the outline for an economic
argument of why that is. But the underlying idea is simply, that "you grow
wealthy through trading", which is the classic bourgeois idea (the
corrollary of which seems to be that you cannot grow wealthy if you do not
trade, except through crime or conquest). The idea that you could grow
wealthy through sharing or producing for the common good, is a completely
alien "socialistic" idea in this context.

An excellent, clear introduction to recent economic thinking about
international trade is: Nigel Grimwade, "International Trade; New Patterns
of Trade, Production and Investment" (second edition), 2000. By its clarity,
it shows at the same time there exists nowadays no coherent theoretical
framework anymore for the explanation of patterns of foreign trade, only an
eclectic one (various theories or facets that are not mutually consistent).

Haven't got time to go into greater depth, too much to do...


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