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

From: Rakesh Bhandari (bhandari@BERKELEY.EDU)
Date: Wed Dec 06 2006 - 12:27:11 EST

Hi Paul,

I found you question interesting about why if surplus rising investment
does not rise to raise
absolute levels of employment.

Years ago in exchange with Gil on pen-l, I sent this.

Why is there economic scarcity, a shortage of capital with respect to
labor and hence unemployment ?

It is the scarcity of surplus labor in the production process that ensures
the relative scarcity of capital with respect to labor: the diminishing
flow of surplus value relative to rising minimum capital requirements
constrains and discourages the rate of accumulation that would be needed
as the OCC rises to absorb not only a growing
population but also the proletarians, artisans and peasants
continously displaced by technological change and the expansion of
commodity production.

To say that additional capital is increasingly in short supply vis a vis
the new and displaced laboring population as accumulation
progresses only means that in the course of accumulation the
primordial source of this capital, surplus value, becomes
progressively more scarce, too small, in relation to the already
accumulated mass of capital

Production (P) is explanatorily fundamental to the Scarcity of
Differentially Owned Productive Assets(S) and thus the persistence of
exploitation (E).

That is, P=>E implies P+S=>E

It's into the hidden abode of production one must enter to explain the
persistence of scarce DOPA relative to labor, no?

Production, not private property, is explanatorily fundamental to the
continuation of exploitation.

Economics is focused on ownership and relations of exchange, not Marxism.


ps what has been maintaining profitability, putting aside the question of
accounting tricks? It seems that the two main factors have been the
centralization of capital and a rising rate of exploitation (wages lagging
behind productivity gains). It does not follow from the law of value that
the rate of profit must decline.

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