Re: [OPE-L] SV: [OPE-L] what is irrational in the functioning of capitalism?

From: Paul Cockshott (wpc@DCS.GLA.AC.UK)
Date: Tue Dec 05 2006 - 18:00:42 EST

Ajit I see that I had misread you when I thought you said I would be
unable to persuade capitalists that they got their profits from the
exploitation of labour. You actually said I would be unable to persuade
students - this is a hypothetical question of course, but given the
figures you gave where labour was getting less than 1% of the output
produced, then I think I would have no difficulty in persuading students
that workers were exploited.
I think this is the most important theoretical
sticking point for you. The point I'm trying to make
is made by workers all over the world every day these
days, i.e. the spector of "jobless growth". The
capitalists do keep reinvesting their profits but the
technical changes are taking place simultaneously and
its nature is such that though the growth in total
output are taking place but simultaneously either
employment is stagnant or even declining. I'm just
trying to work out the theoretical consequences of
this scenario. In India the left is arguing for a move
toward 'labor intensive' job creating technology or
minimum employment guarantee etc. I wrote a short
piece on this kind of scenario in EPW sometime ago (it
came out on July 2, 2005). I attach the draft file for

I have seen your paper, and it strikes me as similar to papers that were
being written by people like Diane Elson in Britain 15 years ago. Then
again we had people arguing that what we had was jobless growth, that
capitalism was incapable of providing full employment and that the
answer was to demand a basic state income.

At the time I was very skeptical and wrote pamphlets arguing against
this position.

I was speaking at the Rosa Luxemburg Stiftung 3 weeks back and was
struck by the way many German Left economists were also saying the same
thing today. 

I think these views are prompted by a particular conjunctural situation,
one that Germany today and Britain under Thatcher shared. ( I don't know
enough about the Indian economic conjuncture at the moment to comment on
whether it shares traits with these periods )

My analysis of the unemployment which existed in the 1980s and early 90s
in Britain was that its causes were not technological change, but a
combination of monetary, fiscal and income distribution issues. I think
the same factors are currently operating in Germany.

I put the high level of unemployment down to :
1) Restrictive monetary policies which hindered capital accumulation.
2) An obsession with reducing the state budget deficit
3) A shift in the distribution of income from the working class towards
the rentier class who have a lower propensity to consume

What is the current share of accumulation in the Indian GDP?

I was looking at China's statistics a few months ago and saw that their
accumulation rate ran at 50% of gdp.

Would employment in India not be rising rapidly were India experiencing
similarly high rates of capital accumulation?

> More generally though, I don't see why you think
> that positing examples that are so far out of the
> range of the normal is enlightening. The fact that
> examples with these sort of ratios do not exist
> indicates that there are dynamical laws which
> prevent their occurrence.
That's the only way I know how to do theory. I think
to think that there is a dynamical law that prevents
the things that do not exist from occurring is to
argue that whatever does not exist cannot exist--does
not make sense to me. Cheers, ajit sinha


I agree that one should be open to the possibility that circumstances
may change. But on the other hand, all my experience as a Marxist
economist since I started working in the area in the early 1970s has
taught me that one always has to return to the empirical if one is not
to be mislead by speculation.

Every time I have carried out an empirical investigation it has taught
me something new, something unexpected, and has resulted in a deepening
of my theoretical understanding.

Thus if we see certain regularities arising - such as the consistently
narrow range of rates of surplus value shown in Zachariahs study:
One has to ask why this exists. The most plausible explanation is that
there is some dynamic mechanism that keeps the rate of surplus value
within certain relatively narrow bands.

It is possible that it is all just chance, but the odds against it being
just chance seem very high.

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