Relay-Version: version B 2.10 5/3/83; site utzoo.UUCP Posting-Version: version B 2.10.3 alpha 4/15/85; site ratex.UUCP Path: utzoo!watmath!clyde!ratex!mck From: mck@ratex.UUCP (Daniel Kian Mc Kiernan) Newsgroups: net.politics.theory Subject: (Re:)**3 What is "capitalism"? -- Replies to Carnes and Sevener Message-ID: <1148@ratex.UUCP> Date: Tue, 7-May-85 18:01:01 EDT Article-I.D.: ratex.1148 Posted: Tue May 7 18:01:01 1985 Date-Received: Wed, 8-May-85 05:31:47 EDT Organization: Squids R Us Lines: 112 Keywords: watson Lines marked with one '>' are those of tim sevener; lines with two are those of Richard Carnes. >Just to add a historical point to Richard Carne's comment: >> >>It is characteristic of capitalist economists to neglect the implicit >>relational structure of economic predicates, i.e., to overlook the >>fact that some important economic predicates are of the second type. It is characteristic of Carnes et alii to misrepresent the positions of their opponents; that is to say, to build straw men and then glory in their defeat. No doubt Carnes can find some Libertarian somewhere who will say such things, but note his words 'is characteristic of capitalist economists'. >>Hence "capital is productive," to the capitalist way of thinking, >>means that capital's power to produce is a faculty inherent in it, a >>power it possesses autonomously. Nope. As anyone who's taken even an introductory remedial college course in economics knows, we concern ourselves with MARGINAL PRODUCTIVITY, a concept which acknowledges that context matters. >> When a capitalist brings many >>workers together and their productivity increases more than >>proportionately to the number of workers, it appears to them as if >>the extra productive power is due to the *inherent* productivity of >>capital. Marxists, however, point out that capital is productive >>solely in virtue of being embodied in a material labor process; its >>productivity *means* that it stands in a certain relation to other >>things in a process of physical production; it cannot be reduced to >>a property which capital possesses independently. Now see, if we accept Carnes's straw-man depiction of Capitalist thought, Marxism looks much more reasonable. Unfortunately for the Marxists, Carnes's depiction is wrong. Perhaps Mr Carnes is a dupe, but somebody somewhere is lying. >>An example of the "fetishistic" way of thinking criticized by >>Marxists is the idea that "money makes money," the idea that >>interest-bearing capital is autonomously productive. Nope, that's not the idea at all. Money represents a claim on resources. If the holder of money allows her claim to be channelled into production (rather than direct consumption), a greater supply of goods and services is created. That's how 'money makes money'. >> But if all >>capitalists merely lent their money at interest instead of investing >>it in production, capitalist production would cease and the source of >>interest payments would eventually dry up. Yep. If savings and investment get out of synch, we got trouble. >For example, this type of rampant speculation is precisely what >happened at the end of the Twenties before the Great Crash hit. >Investors were worth a million dollars- all on paper. The fact was >that there was really no backing for this presumed wealth and that >in fact much of it was simply inflated value based on speculation >and not based upon actual material or social values. > >Personally, I am afraid that the same sort of economic collapse >could happen again. There is an enormous amount of money owed in >personal credit, there are also enormous debts owed by Third World >countries, and there is the current mania of corporate takeovers >which have no objective other than short-term profits and >speculative profits. T Boone Pickens and his fellow corporate pirates >have no concern to actually *run* a company: all they want to do is >raid it, get as much money as they can, and leave the skeleton to >the management and stockholders to try to salvage. >Last year the SEC also further reduced the margin necessary to buy stocks >saying the controls applied after the Stock Market Crash were no longer >necessary. >And who is supposed to stand behind stock market margins, savings and loans, >major banks with Third World creditors and banks with loans to farmers >about to go under? The Federal Government with a debt so big the fastest >growing portion of the Federal budget is simply interest on the >national debt. >It is interesting that ten years ago the Marxist James O'Connor wrote >the book "The Fiscal Crisis of the State" stating that one of major >coming contradictions in the Capitalist system was the burden of >maintaining the infrastructure needed for corporations without charging >those corporations to maintain that infrastructure. Government maintanence of the infrastructure does indeed represent a subsidy, but not a problem of Capitalism. Under Capitalism, the infrastructure would be brought into the Price System. > We see this problem >and contradiction coming home to roost in spades with Reagan's 1981 >tax bonanza for corporations which is the cause of the current unprecedented >deficits. That's like saying that Joe Smith's failure to mug you is the reason that he owes so much to MasterCard! > (along with the system of "military keynesianism" in which the >solution to inadequate demand is similar to Keynes prescription to dig >holes and fill them in: only the twist is to build bombs which have no use >except not to be used and then replace them with bigger or better bombs >with no use except not to be used) > >I may be wrong (I was wrong about the latest economic recovery) but my gut >feeling is that our economy is in very real trouble. Well, sevener, except for your confusion about the infrastructure and the cause of the deficits, what you've actually said above is actually right! The economy IS in BIG TROUBLE (under the facade), and Reagan's deficits are making things a lot worse. It's just a matter of time... Back later, DKMcK