[OPE-L:4060] the railway of capital

Gerald Lev (glevy@pratt.edu)
Sat, 25 Jan 1997 14:25:08 -0800 (PST)

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"Where the capitalists have a monopoly, and are not compelled
by competition to replace obsolete machinery, etc., by new, as
for example on the railways, they therefore exclude
improvements as long as possible." (_Collected Works_, Volume
33, p. 153).

1) What is the force that compels capitalists to introduce new
machinery? Isn't Marx clearly saying above that it is *competition*?
I emphasize this point since some on this list seem to believe that
technical change should be analyzed without reference to competition.

2) Monopolies, says Marx, aren't "compelled by competition" to introduce
new technologies. Monopolies, as distinct from oligopolies, are pretty
rare in contemporary capitalism. On the other hand, one could argue
convincingly that most major branches of production in advanced
capitalist economies are dominated by oligopolies. How are we to explain
technical change in branches of production which are dominated by just a
few firms (often with a high degree of product differentiation among the
firms) that have some degree of monopoly-like powers, e.g. oligopolies?

4) Monopolies, as such, are normally created through state intervention,
e.g. by giving an exclusive franchise to a firm. Oops ... we haven't
gotten to the Book on the State, have we?

5) Oligopolies, on the other hand, could be seen as a consequence of the
process of concentration and centralization that accompanies competition.
In other words, monopolies tend to be created by the state whereas
oligopolies tend to be created by capital itself. Yet, whatever the
differences in origin, a oligopoly can come to act in significant ways
_like_ monopolies.

6) If the railways in some cases avoided investment for technical change,
there were other capitalists during the same time period like Andrew
Carnegie and Henry Clay Frick [boo! hiss! jeer!] in the steel and coke
industries who behaved more like Moses and the Prophets by re-investing
virtually all of their profit into purchasing more advanced means of
production rather than paying out dividends to stockholders. This vision
of capitalist competition personified by Carnegie and Frick may no
longer be the norm within most branches of production in capitalist
economies. Once capitalists are no longer compelled by the same force of
competition to revolutionize means of production, what then determines
the pace of technical change?

In solidarity, Jerry