Re: [OPE] Marxist theory of crisis

From: Dave Zachariah <>
Date: Tue Nov 18 2008 - 07:00:20 EST

On 2008/11/18 Paula wrote
> Dave: "I would not say that the present crisis is fundamentally due to
some long-run depression of distribution of the profit rates .... Rather I
think it is due to the dramatic rise of the unproductive financial sector
and the rentier class which has been appropriating an ever greater share of
the surplus product since the late-1970s. This in conjunction with the
fundamental imbalance of the world economy the past 10 years or so ...."
> Roughly, that coincides with my initial views. The point about
imbalances relates to David's assessment that this is a crisis of
imperialism - I agree. But regarding the growth of unproductive capital I
have a question - could we call this growth over-accumulation, and if so
what kind of over-accumulation would it be? When Marx discussed the tendency
of the rate of profit to fall, he described a tendency inherent in the
development of capitalist productivity. But now we have a second and
apparently opposite development, the growth of unproductive (relative to
productive) capital.

I would not call this growth 'over-accumulation' since real capital
accumulation to me means the growth of the stock of means of production. I
emphasized 'unproductive financial sector' for two reasons:

Firstly, the growth of an unproductive sector means that profits retained in
productive firms is reduced. For the financial sector this parasitism takes
the form of payments of interests, dividends and various services. This may
lead to a crisis of profitability for productive capitalist firms, but is a
different mechanism than the one underlying the theory of falling average
profit rate.

Secondly, the financial sector has its particular effects due to its role in
the creation of credit and debt, i.e. the essential monetary operations of a
capitalist economy. A growth of financial activities leads to more
risk-taking and bubble-driven growth. A related issue that I have not
clearly understood yet is the debt-financed consumption and growth in which
the US economy has been appropriating the surplus product of other economies
through a trade deficit.

Both reasons point to the financial sector as the fundamental cause of the
current crisis.

Regarding the Marxian theory of tendency of the average profit rate to fall
I think the work of Farjoun and Machover, and Paul C and Allin C, has put it
into a more precise framework than before. I investigated this further
recently. Essentially the trend of the average profit rate is constrained by
the growth of the workforce and productivity and the share of profits going
as investments.

//Dave Z

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Received on Tue Nov 18 07:05:42 2008

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