Re: [OPE-L] SV: [OPE-L] what is irrational in the functioning of capitalism?

From: Rakesh Bhandari (bhandari@BERKELEY.EDU)
Date: Thu Nov 30 2006 - 11:32:07 EST

Paul Z wrote:

>Rakesh, We are so far apart I wouldn't no where to start.

Ok but I don't think my emphasis on luxury spending as motivation is
neoclassical, and describes a feudal situation.

To be sure, even to perpetuate their present luxury fund capitalists
have to maintain a viable on going enterprise, upkeep of which will
force technological innovation and accumulation. Investing in the
enterprise holds out the promise of a larger luxury fund in the
future even if prevents an immediate increase in the luxury fund.
Yet the maintaining of the enterprise won't likely come at the
expense of luxury consumption. If it did, the capitalists would
simply divest. That's what seems likely to me.

Now you seem to be saying that capitalists virtuously drive in small
cars so as to control as much surplus value as possible! I think
you're bending the stick too far in the other direction.

  Let's not forget that capitalists may hide their luxury spending
when they are using public handouts to supplement the wages they pay
(this is of course what Wal Mart has done). But I wouldn't make too
much of this propaganda stunt.

Capitalists  reinvest much of their gross receipts so they can
perpetuate and even increase their own consumption fund for luxury
spending even if they hide or defer their expenditures. Jain
merchants were famous for this. And most often they do not hide them.
Think here the Gilded Age and Reagan's Second Gilded Age. Yachts,
mansions, expensive cars, summer homes,  mistresses, jewelry,
professional sports teams, art collections, wine cellars, endowments,
vacations, exotica. etc. Consumption is conspicuous, competitive or
positional and extravagant. It's what motivates the accumulation of
capital; even if competitively imposed the accumulation of capital
cannot go so far as to reduce luxury spending. Indeed for the most
part the accumulation of capital prevents expenditures on luxuries
all at once only to increase in absolute terms the fund available for
luxuries in the future (though this can change).

Well  we'll need a lot of sociological evidence to settle this
debate. I am obviously worried here that we are giving too flattering
portrait to the capitalist as a socially useful ascetic; I am
suggesting that the role capitalism gives him to play is not as
socially respectable as you seem to be saying.

Also,  what happens if the capitalization of surplus value yields
less surplus value in absolute terms than yielded in the previous
round of production?

Here the accumulation of capital is contrary to the production of as
much surplus value as possible.

It seems to me that accumulation would cease.

For this reason it seems inaccurate to define capitalism as an
imperative for accumulation or to equate that imperative with the
maximal production of surplus value.


>  The founder of
>Walmart empire-built. In fact somewhere I heard that he drove around in a
>relatively old car.
>The object of capital is to control as much surplus value as possible.
>His/her personal choice thereafter regarding how much to use for luxury
>consumption is just that, but a capitalist who likes luxury consumption too
>much is violating his/her social function and that is NOT virtue.  That's
>in Marx, but I don't feel like finding the exact passage in 'Conversion of
>Surplus Value into Capital'.
>--On Wednesday, November 29, 2006 2:10 PM -0800 Rakesh Bhandari
><bhandari@BERKELEY.EDU> wrote:
>>We also know that the capitalist will not accumulate if
>>it means that he must forgo luxury consumption as such. He may of
>>course restrain from overindulgence in order to make investments to
>>maintain over time a luxury fund or even to increase of the fund. But
>>the imperative of accumulation won't be allowed to diminish his fund
>>for luxury consumption in real terms over time....
>THE HIDDEN HISTORY OF 9-11-2001   --"a benchmark in 9/11 research", review
>Volume 23 (2006), RESEARCH IN POLITICAL ECONOMY, P.Zarembka, ed., Elsevier

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