[OPE-L:5322] Re: use-value of money

Gerald Levy (glevy@pratt.edu)
Fri, 4 Jul 1997 07:46:08 -0700 (PDT)

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Hans wrote in [OPE-L:5321]:

> [...] Too bad Marx never wrote his
> book about competition arguing in more detail why he thinks this must
> be so.

Yes, it's too bad. I think that Lipietz's _Le monde enchante'_ was a
valiant attempt to "extend Marx" in this direction.

> Lipietz stresses the relative autonomy and, with monopoly regulation,
> increasing rigidity of the exoteric sphere. The exoteric is able to
> move on its own and separate itself more and more from the esoteric
> base, so that reconciliation is often only possible by crisis. For
> instance if the markup is too big for the amount of surplus value
> generated, this may lead to stagflation: either the workers cannot
> maintain their consumption, or the capitalists cannot replace their
> fixed capital.

Slow down, please. What do you see as the cause (or causes) of

Lipietz relates stagflation to the "crisis of Fordism" and the
"esoteric/exoteric divergence" which led to a "realization crisis":
"the crisis stems from the fact that, *with prices that are considered
'normal"*, (and which are determined by external conditions, for example,
guaranteeing a 'normal' rate of profit), the distributed incomes can no
longer validate production" [Lipietz, 1983, p. 109].

This point is made even stronger when Alain writes: "The internal
relations no longer assure more than a declining rate of profit, and the
attack on real wages by a rise in nominal prices stifles demand. It is not
possible to have sufficient demand and sufficient profitability at the
same time" [Ibid, pp. 109-110].

Do you agree with the above points?

This stagflation and "realization crisis", it is claimed, is "what
happened between 1974 and 1983 when all the major capitalist countries in
turn adopted 'austerity' policies designed to make the workers pay for
the crisis" [Ibid, p. 109]. But, if that was the case, since one of the
pillars of the current period is also austerity policies, why isn't there
still stagflation?

I think that an examination of both the "oil crisis" of the 1970's and
state monetarist monetary policies are important for understanding the
stagflation that occurred during that period. Of course, Alain also
discusses these subjects (in Ch. 7). For instance, he writes that "The
rise in the price of oil is the appearance of a social relation -- State
landed property -- in the distribution of global incomes. Esoterically,
what happens may be described as a transformation of the structure of
distribution within an essentially unaltered system of values.
Exoterically, it appears as an independent rise in one of the 'component
elements' of the price prices system. The 'accumulation of divergences' is
wiped out by means of an adjustment belonging to the mode of regulation in
force" [Ibid, p. 118]. Here, I think, we'd have to examine the role of
*cartels* in changing the "mode of regulation" and the distribution of
income among different classes on the world market.

Lipietz, I think rather unconvincingly, also argues that "the basis of the
problem is that class struggle within production forces management to
introduce more and more mechanization and robots, even if there is no
clear micro-economic advantage, in order to extend their control over the
labour process and eliminate 'workers' microconflicts'...." [Ibid, , p.
130]. I find this unconvincing since Lipietz only asserts that there can
be no "clear micro-economic advantage" of mechanization without
explaining how that may have been the case in practice.

> [...] A good expression of value has
> important practical implications: it gives businesses a good compass,
> so that they will not divert their resources in speculation etc. but
> will make productive investments. This is what the economists at
> the Fed go by, they therefore do not need to know Marx to pursue
> monetary policy. But I don't think it is an accident
> that the Fed in the USA maintains the statistics about industrial
> production, and that it is shielded from electoral pressures.

A "moderate" amount of inflation is not particularly threatening to
accumulation, particularly during the expansionary phase of the business
cycle (although, monetarists might disagree). The problem with speculation
becoming a drain on investment only really comes into being with
*hyper-inflation*. I.e. if price instability grows to a great extent (as
it did in, for example, many countries in Latin America in the 1980's),
then individual capitalists can retreat from productive investment to the
trading in already produced commodities.

Let's talk about Lipietz, stagflation, cartels, speculation, and monetary
policy some more.

In solidarity, Jerry