[OPE-L:1642] Re: Britain's crisis

Paul Cockshott (wpc@clyder.gn.apc.org)
Sat, 30 Mar 1996 08:20:16 -0800

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But Paul, I can't help observing that in the very
article of yours which you cite, and by your own figures,
the organic composition of capital rises (p121) in every
single year except 1954 from 1948 onwards, the
first year in which the statistical office began
making reliable estimates of capital stock.

Why didn't you cite this data also in your posting?

I am not arguing that capital never accumulates, nor
that the organic composition of capital never rises.
What I am arguing is:

1) Rises in the organic composition of capital
depend upon the relative rates of accumulation
of capital and the working population.

2) That the rate of accumulation depends upon a
a complex of social economic and political factors
and varies widely between societies and time

My investigations lead me to believe that there have
been a number of distinct phases of capital
accumulation in the UK :
a) in the late 19th century there was a slow decline
in the organic composition associated with a low
rate of accumulation
b) In the period between 1900 and 1914 accumulation
picked up,
c) In the inter war period it was erratic
d) in the 1948-1978 period accumulation accelerated
and there was a rising organic composition
e) in the 1979-92 period accumulation has been
slow or negative and any rise in the organic
composition is due to a shrinking of the productive
I believe that some further research is need before
we can come up with a good explanation for this
periodisation, but I do agree that as you say:
"a remarkably different period of British capitalism
opened up in 1948".

The different period coincides with what Hobsbawm
calls the capitalisms golden age. It was a genuinely
progressive era of capitalist development, when,
thanks primarily to the political influence of the
working classes and the demand for full employment,
state policy was aimed at ensuring rapid accumulation.
The paradox is, that it was only under the influence
of working class pressure and state intervention that
the classic marxian contradictions fully manifested
themselves. The period 1945 ( 1948 is an artifact
of when the figures start ) to 1975 is almost a
textbook example of the contradictions of capital

Freed from that state intervention to ensure full
employment, capitalism has reverted to its classic
late 19th century mode of accumulation. I would say
that the debate on Okishio is a total irrelevance here,
given that its conditions are so artificial - constant
real wages, equalisation of profit rates, disregard for
interest rates etc. What we ought to be looking at
are factors like the determination of interest rates
in different historical periods, the relation between
these and average profit rates, direct accumulation
by state capital, the relative share of accumulation
by private and public companies.

In looking at the late 19th century we also have
to look at the extent to which there may have been
over investment in railways in 2nd quarter of the
century, the subsequent depreciation of which may
partially account for the subsequent decline in
the organic composition. Perelmans work on the
over investment in the US railway system and the
stagnation it engendered is interesting here.

(2) the *accounting* fact that, for *any* set of
accounting data involving capital goods which get
cheaper over time, temporal methods (when
corrected for misreported data) yield the same
rate of profit as the capitalists' accounts, and
simultaneous methods do not.

I dont understand this.

I am only concerned to defend the simultaneous
definition of value, which is, to my mind something
quite different from prices. I consider arguments
about determinations of prices of production, whether
simultaneous or not, to be irrelevant given real
disparities in profit rates.

But as the paper that I gave you on dynamic value
analysis shows, there is no reason why a simultaneous
value definition precludes one from accounting for
stock appreciation/depreciation.