(The following is the latest in an exchange with a "Karl" who has been berating me for being insufficiently marxist. I hope this will be of interest to some, and sincere apologies to the rest of you.) -rkm ________________________________________________________________ Dear Karl, You wrote: >No matter what, there is only so >much total profit in existence, surplus value... I'm not convinced that this nineteenth-century assumption about finiteness is a sound one. I'm not an economist, and can't discuss this issue "intelligently", but my intution tells me that the total amount of surplus value increases all the time, as a result of creativity. I'll give an example, just to make my meaning clear, but I don't think I'm capable of an informed debate about the matter. Take for example personal computers. Their existence has brought into being a whole new signficant portion of the economy, relating to software, hardware, peripherals, training, service, etc. -- not to mention the increased level of operation of all businesses that results from widespread use of computer applications. Thus my intuition is that the total amount of "surplus value" in the world is not closed and finite, but open and expanding. To take a completely different tack on this, consider a factory, and assume the workers are thinking of "taking it over". They might look at Marx, and say "This factory produces $100 million in annual revenue. If we take it over we can get more of the fixed/finite profit for ourselves." But perhaps certain key expertise (maybe marketing) is lacking among the workers, and when they take over the factory, it goes out of business. Thus the amount of value can be decreased as well as increased -- but it isn't closed/finite. --- >...KARL: You have once again proved my point which is that profit >maximisation us what underlines this activity. What you call the >pursuit of growth and the increase in value has as its motive profit >maximisation. If you want to be reductionist about it, you can say "everything" results from profit maxing, or from individual greed, or from fear of poverty, or from the motion of atoms. I might even agree that profit-maxing is operative behind the scenes in every economic transaction. But so what? The universality of profit-motive does not mean there is no point in identifying distinctions among different kinds of profit-related mechanisms. I claim there is an important distinction that occurs when enterprises are owned by stockholders whose sole aim is for the stock value to increase. Even if it is true to say "profit is behind it all", I still claim the distinction is important. It leads to a situation where corporations cannot content themselves with being merely productive and profitable, but must relentlessly pursue growth itself, in the style of a cancer. --- In summary, I challenge the adequacy of marxist theory, as an analysis of capitalism. My experience with many nineteenth-century (and eighteenth-century) theories has been to find that they are overly reductionist. The discoveries of people like Newton had led to a revolutionary scientific attitude, that all phenomenon could be explained by simple laws. The immense power of laws/formulas like "f=ma" seemed to magically decode the secrets of creation, and the overall design of "God's machine" seemed to be discoverable by mortal man. People made the very natural assumption that similar simple laws could be discovered for all manner of things, from psychology, to economics, to evolution, to sociology, etc. But... it ain't necessarily so. We now know a lot more about complex systems, indeed we now know about "chaos theory", which demonstrates that in many cases there _can't_ be any simple law or formula to usefully predict system behavior, but that intensive computer simulation, incorporating many diverse driving forces, is the only way to model what's going on with any precision, and then only for relatively short prediction horizons. Thus in retrospect, we can see many of the early theorists were grasping at straws, but at the time they had a deeply-held belief that the simple laws were there, if only they could be identified. So we had Adam Smith et al thinking that they had discovered fundamental economic laws (Invisible Hand and all that) showing that unrestricted free markets would lead to everyone's benefit. They were wrong -- things just aren't that simple -- although their models are useful in understanding how certain aspects of economic activity operate, during intervals of relative stability. Their oversimplified theorizing survives to this day as neoliberalism, and has managed to become the established "consensus understanding" of economics over the past fifteen years -- not because it has substance or validity, but because it, as propaganda, facilitates further power-grabbing by the corporate elite. Marx saw that neoliberal theory (as we now call it) was in error. His rebuttal also took the form of "simple laws", but ones that took into account additional factors that neoliberalism ignores. His slightly more complex model showed, as you stated earlier, that recessions are not unfortunate anomolies, as the neoliberals would say, but are a systemic part of of a better-understood capitalist system. Nonetheless, my suspicion is that Marx was still too reductionist, and that a useful understanding of capitalism requires more than what Marx and his followers have been able to give us. Their prediction of the natural demise of capitalism, brought on by its internal contradictions, seems now to have about as much reality as a prediction that the Messiah is going to soon reappear on a certain mountain top. And certainly, any doctrinaire marxist must explain why socialist revolutions didn't occur among the industrial proletariat, as Marx predicted, but rather in countries emerging from feudalism. How long do you patch up a theory before you decide a fresh analysis is necessary? -rkm ________________________________________________________________ ~=-=-=-=-=-=-=-=~=-=-=-=-=-=-=-=-=~--~=-=-=-=-=-=-=-=-=~=-=-=-=-=-=-=-=-=~ Posted by Richard K. Moore - •••@••.••• - Wexford, Ireland Cyberlib: www | ftp --> ftp://ftp.iol.ie/users/rkmoore/cyberlib ~=-=-=-=-=-=-=-=~=-=-=-=-=-=-=-=-=~--~=-=-=-=-=-=-=-=-=~=-=-=-=-=-=-=-=-=~
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