[OPE-L:6567] [OPE-L:32] Re: Weeks' and the FRP

jurriaan bendien (Jbendien@globalxs.nl)
Sat, 23 May 1998 20:02:23 +0200

Alejandro quotes Weeks as saying:

>"The task... is to explain both why the rate of profit does fall and why
>under some circumstances it does not. A theory that always predicts one or
>the other is no guide to understanding reality, where *both* occur." (p.
I quite agree. There is nothing so boring and unpersuasive as Marxists
seeking to reduce the explanation of crises solely to the tendency of the
rate of profit to fall. In fact the general rate of profit has been rising
in the late 1980s and 1990s in most OECD countries so insisting on the
falling rate of profit is not very relevant.
The tendency of the rate of profit to fall is a broad historic tendency,
but this is not sufficient to explain fluctuations in profitability in the
shorter term, i.e. those economic fluctuations which have real effects on
people's lives. The question is indeed how you explain these fluctuations in
the rate of profit. In this regard I find Mandel's approach in Late
Capitalism much more persuasive. Mandel correctly notes two faults in
classical Marxists theorising: (1) the attempt to use Marx's reproduction
schemes to build a theory of capitalist development and crises, (2) the
attempt to reduce the whole dynamic of capitalism to a single "fundamental"
variable or contradiction in the system, such as the TPRF. To come to grips
with real economic history, bring historical contingency back in, and
explain measurable changes in the level of profitability, he suggests you
need to ascertain the empirical interplay of at least the following: the
volume and organic composition of capital in general and between basic
economic sectors; the distribution of fixed and circulating capital
(equipment goods and raw materials) as a whole and by basic sector; the rate
of surplus value; the rate of real accumulation (productive investment of
realised surplus-value) in general and in basic sectors; the turnover-time
of capital; the relations of exchange between basic economic sectors. These
"core variables" are themselves again also mediated by such factors as
monetary and credit conditions, state expenditure, etc.
The "core variables" are the real key to explaining why profitability
rises or falls. The magnitudes of these variables can increase or decrease
over time independently, within certain limits, according to specific
historical circumstances, and to that extent they are "partially autonomous
variables". Hence, the explanation of a specific period of capitalist
development must necessarily be multicausal and not reduced to one variable
Elsewhere Mandel neatly puts the real problem of capitalist development
as follows: "Capitalist growth and prosperity require both a rising rate of
profit (of currently realised as well as anticipated profits) and an
expanding market (as present reality and future trend). But the coincidence
of these conditions can never be permanent, for the very forces which bring
it into being at a given point of the trade cycle working towards its
undoing at a subsequent stage. In that sense crises of over-production are
unavoidable under capitalism" (Intro to Capital 2, p. 72-73). In various
places Mandel has sketched the basic movement from boom to slump in terms of
the interplay between the mentioned core variables.
It has been argued that such an approach is "eclectic" or
"underconsumptionist" but this charge seems unwarranted to me. It is
clearly based on the notion that capitalist development is driven by the
relentless thirst for surplus-value, for surplus-profits. Indeed, it tries
to integrate all the different dynamics which Marx says are important for
capitalist development, showing the specific effect they have and the limits
of that effect. Rather than saying that fluctuation in the rate of profit
is itself alone the explanation of capitalist growth or the lack of it, it
is viewed mainly as the synthetic indicator of the "health" of the system, a
result, which itself must be explained in terms of the basic relationships
which Marx identifies as being important for the accumulation process.
I would not say that Mandel has said the final word about the
development of capitalism in the 20th century, but at least he does show how
you might explain it with reference to the laws of motion specified by Marx.


Jurriaan Bendien.