Re: [OPE-L] Grossman and the theory of capitalist collapse

From: Rakesh Bhandari (bhandari@BERKELEY.EDU)
Date: Sat Jun 30 2007 - 01:49:41 EDT

>The source is
><> where
>it's printed as a caption quote in grey, at the top of the page.
>However, the source of the caption is not stated. I cannot yet trace
>the source in Grossman's published texts. Presumably the comment was
>made after 1929. I suggest you consult Rick Kuhn.
>However Grossman is wrong in stating that Hilferding or Bauer
>believed a breakdown was "impossible".

Was he wrong to criticize them for failing to understand how and why
the valorization of capital would result in economic catastrophe
and--in the absence of revolutionary working class politics--brutal
class violence and imperialist bloodbaths?

How do you understand HG's critique of Hilferding and Bauer?  Just as
you put it. Do you think that is all there was to it? Are you trying
to understand him or caricature him?

>They had, after all, observed the ravages of world war I and its
>aftermath. The question was more one of a conjunctural type: how
>likely was a deep slump in the given circumstances? What would be
>its magnitude? What were the political implications?
>The notion of a breakdown is however somewhat ambiguous itself,
>because what is a real "breakdown" (Zusammenbruch)?

Breakdown as Grossman uses it is better understood/ translated as
catastrophe I think.

>Grossman aims to show that after N number of cycles, insufficient
>surplus value is generated to valorise the mass of capital assets,
>the rate of profit falls, and eventually the system collapses. But
>supposing that he is right, what prevents a mutation of the system
>in a way which revalues assets, changes allocative principles and
>changes property rights?

Your meaning is unclear.


>You may possibly be able to demonstrate a necessary long-term trend
>in capital structures, but an economic collapse does not logically
>follow from it.
>During the great depression, production and circulation never
>"collapsed" totally, even with seriously debased currency (my
>grandfather once gave me an old banknote of a million Reichsmarks,
>claiming that at a certain point it would have taken a barrowful of
>these notes to buy groceries, and that people therefore bartered
>instead). Between summer 1929 and early 1932, German unemployment
>rose from just under 1.3 million to 6 million. The unemployment rate
>rose from 4.5% to 24% of the labour force. Real GDP declined
>absolutely by 8.3 percent from early 1931, average real weekly wages
>declined 2.5% per year until mid-1935. (Nicholas H. Dimsdale,
>Nicholas Horsewood and Arthur van Riel, "Unemployment and real wages
>in Weimar Germany". Uni of Oxford Discussion Papers in Economics and
>Social History, no. 56, 2004). That was depression, not collapse. I
>thumbnail-sketched the impact and recovery from world war 2 here:
>I think that you can find real examples of the collapse of societies
>in history, where people literally died like flies from lack of food
>and water, but few collapses are absolute, in the sense that a
>social order totally disintegrates. As soon as the normal trading
>pattern becomes impossible, and one's life is at stake, prevailing
>property relations are no longer respected, and people seize
>whatever they need to survive, or barter.
>When I lived in New Zealand in 1985, the Labour Government began to
>apply neoliberal shock therapy, ripping up all protectionist
>measures, eradicating most subsidies, and staging a privatisation
>sell-out. At that time, I and my friends thought the avalanche of
>events would inaugur a pre-revolutionary political crisis. That did
>not happen with the given qualities of consciousness; the most that
>happened, other than business failures, rising unemployment and some
>feeble protest, was that the net outward emigration flow for some
>years was proportionally similar to East Germany after the Wende,
>and that the Labour Party eventually split, after masses of workers
>had already voted with their feet. The maximum permitted inflation
>rate was fixed by legal statute. All this excitement taught me, that
>the anxiety of collapse was not wellfounded, and that a theory of
>collapse would actually have to specify what a collapse would
>consist in.
>There exists a literature on collapsing societies, both historical
>(Joseph Tainter, Jared Diamond etc.) and contemporary (e.g. with
>regard to the "transitional economies" of the ex-Soviet Bloc,
>Argentina, Zimbabwe etc.) but it is mostly not a Marxist literature.
>I think that when Marxists raise the spectre of collapse, they ought
>to base themselves on real facts and not rhetoric. A general
>collapse of capitalism through economic dislocations is very
>unlikely, at most you can say that the social order in particular
>countries or regions can collapse for mainly economic reasons.
>Perhaps a better perspective is that of Mike Davis, who portrays in
>various ways the gradual "rotting" of the foundations of traditional
>bourgeois society, in terms of what this means for human relations
>and the people who no longer fit easily in these relations, and how
>unanticipated events can spell disaster (the great influenza
>pandemic of 1918 killed more people than the world war did!).
>As a digression, more realistic than the spectre of collapse, is the
>spectre of wars, which Mr Bush focuses upon a lot, with a military
>mind-set. Generally people fight wars because they think they can
>win something by them, or to defend what they think is rightfully
>theirs or claim as theirs. But what if you can effectively do
>neither, in important respects? You can still have a conflict in
>some way, obviously, but it begins to take very different forms.
>I noted cyber wars; there are also resource wars and guerilla wars
>of various kinds. But, for example, controlling access to a resource
>is only useful, if you can utilise it or make money from that
>resource - if you cannot do that for technical, political or
>financial reasons, the resource isn't worth much to anybody. All
>that is achieved, is that some are prevented from access by others.
>I would expect that in future, the wars will be more and more
>oriented to issues about the *access to resources of any kind*,
>calling into question the ownership relations, enclosures and
>barriers pertaining to those resources. As I've argued before, I
>think the globalisation of the world begets the "ghettoisation" of
>the world, not necessarily spatially.  "Criminality" is a relative
>concept, insofar as what is not illegal, is not a crime, although it
>may be morally objectionable, and obviously there are many more ways
>to stir (or cause trouble) in the moral cauldron of humanity even
>although those ways are not strictly illegal and bypass the law
>makers. At issue there, is the self-regulation of people versus the
>regulation by an external authority, ultimately the meaning of
>freedom. The problem here is that markets by themselves cannot
>balance this out. And indeed the modern social/cultural debate is
>very much about human "behaviour" as such, the limits of what can be
>tolerated, and how you can impose sanctions against behaviour deemed
>anti-social. Grist to the mill for the genuine socialist concerned
>with the potential for human emancipation from the conditions that
>oppress them.

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