Re: [OPE] Marxist theory of crisis

From: paul bullock <>
Date: Sun Nov 16 2008 - 07:19:10 EST

Unfortunately Paula,

most references to the LRTRPF are usually quite mechanical , and indeed often seem to treat 'it' as a 'cause', so reducing the whole of Marx's theory into the sort of limited causal model so entrenched in the empricist mind.

This rate is a phenomenal form, a further expression of the rising organic composition of capital. That rising organic composition itself reflects an historic investment, by a fractious and competitive society, in scientific development. This promotes a technical composition of capital designed to expel the variable, troublesome, element of capital investment, payment of wages. Science in the hands of privateers.

The rising technical composition - labour /machine loadings are partial indicators of this - and so also the economies of scale it requires, finds a monetary reflection, the rising organic composition of capital. This then further allows an expression in a tendency for the rate of profit to fall when we relate it to the surplus value extracted in the process. This decline can only be inhibited by intensified efforts to increase the rate of exploitation on the one hand and to destroy, peacefully or otherwisde, the capacity of the other competing private owners altogether, their infrastructure, so laying the ground for widening the markets that your own economies of scale require.

Simulataneously then, without really effective warfare between capitals, we have overproduction of commodities as products - to much output against existing markets - thus too much capital investment, too much money in the hands of capitalists whichsettles into hoards, provoking banks into inventive schemes to revive the respiratory system of capital..... until the margins are cut so fine that.... crash!!! All this of course against the constant increase in the rate of exploitation, the time it takes to reproduce the working masses employed by capital... the constant cheapening of their lives, as well as the abuse of nature per se.

The opponents of this nasty scenario - the prospect of an ever more brutal, continuous internecine warfare on a global scale - will of course rush forward with the claim that the organic composition doesn't rise, that science will save us by 'cheapening' constant capital... and all will be well if only reason can modify the various imbalances in the system... which is of course so very complicated!

But constant capital as machinery is always being cheapened! The point is that as a mass of capital it has always to be counterposed to a smaller relative value of variable capital, otherwise profits will decline even more dramatically.

'Fundamentally' capitalism systematically produces crises as a result of its 'nature'.


  ----- Original Message -----
  From: Paula
  To: Outline on Political Economy mailing list
  Sent: Sunday, November 16, 2008 7:01 AM
  Subject: Re: [OPE] Marxist theory of crisis

  Thanks, Paul B. and David. Do you think the present crisis is also fundamentally due to the long-run tendency of the rate of profit to fall?



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Received on Sun Nov 16 07:21:26 2008

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