Extrapolation from Gordon 2016

Gordon, Robert J. 2016. The Rise and Fall of American Growth. Princeton.

Note: GPT, General Purpose Technology, is the fundamental technology upon which a society is built. For example, Gordon cites both electricity and oil extraction and processing as the GPTs of the 20th century US. GPTs pave paths of technological and social-organizational dependency in which specific trajectories of subsidiary technologies are developed.

1) Kalecki thesis: capitalists fundamentally seek control, in order to secure capital, fungible social power.

a) When they have managed to constrain workers’ human-capacity development, particularly their organizing capacity, capitalist control means deploying workers as expendable, dehumanized machines. In aggregate, this takes away from developing the forces of production.

i) Conservative ideology helps reproduce the capitalist Human Waste economy, as per the slavery, servitude model.

b) Upon a Depression separating capitalist exploitation from labour, social-liberal (pro-worker) policy and institutions and war nationalism combined to promote the collective infrastructure required for rigorous subsidiary tech improvements in the US. This extremely-heightened activity, based on the war-social democracy convergence, formed the basis of the exceptional US Trente Glorieuses growth (Gordon 2016).

Social democracy sustains the worker capacitation required to maintain this tech innovation pressure. But without war nationalism, economic growth from tech innovation is moderated; affronted by worker capacitation, elites petulantly go on strike (See 1970s inflation). Conservatized liberalism dismantles social democratic developmentalist infrastructure in favor of control-prioritizing war nationalism only. Without social democracy, subsidiary tech innovation is constrained and the GPT is petrified; economic growth declines.

c) Because it does not mute working-class feedback, a philosophical-materialist, socialist-backbone society has superior capacity to collectively decide on the GPT (General Purpose Technology) governing subsidiary innovations in tech and organization. Examples of superior GPT intervention capacity: Scandinavian social democracies, Germany, China.

i) Societies that delegate GPT decisions strictly to the market, the global capitalist class, relinquish and have no capacity to guide GPT change. They serve as stupid, senseless global bulwarks against GPT shift, prioritizing predictability, ROI, and rentier capitalism (producing increasingly-absolute ownership rights). Anglo-American capitalism is an island aristocracy-designed machine for constraining and muting (torturing into a ventriloquist’s dummy, per Scarry 1985) a domestic working class in favor of maintaining a global-elite-coordinating GPT regime. Imperialism, colonialism, and the military necessarily grow out of and support this primary solution to exclusionary value accumulation (which is why capitalist marketeers once claimed that capitalism would dispense with this violent outgrowth–They misrepresented the successive outgrowth as an optional tactic in poor taste). In order to secure global elite cooperation with their leadership while disrupting societies globally, these Anglo-American model societies prioritize control over, and effective criminalization of their domestic working class, capacitating them and offering them to global elites strictly as consumers and working-class-targeting police/managers and imperial soldiers. Management, militarization, and finance are the governing economic institutions of these capitalist “core” or “metropole” societies.

Prioritizing control over, and effective criminalization of the domestic pool of workers and their families and communities (smallholders), such a global capitalist-subordinated, militarized nationalist society cannot sustain worker capacitation and does not have the capacity to collectively decide on or intervene in the GPT orientation.

Hence, the Anglo-American societies, for example, are bound to contribute increasingly to climate crisis, surveillance and carceralism, and disruptive imperialism, and dismantle or forgo public infrastructure and assets, policy and technology supporting environmental repair, and public education, libraries, and substantive democratic capacity building.

Maintaining a GPT in defiance of broad, shared human development and welfare ratchets up pressure. The belligerence sustains the aging GPT, by shifting around the mounting structural pressure building against GPT-maintenance, which further requires capitalist hoarding and militarization. Anti-social democratic regional economies most tied to the aging GPT, such as the oil states of Texas, Alberta, and Saudi Arabia, will produce the most militant, and methodically inhumane and destructive opposition to GPT shift.

See also: Erica Benner (Really-existing Nationalisms, 2018) for informed identification of Marx’s arguments (particularly in The German Ideology, also The Jewish Question, and the Grundrisse) around human development, sovereignty, including in relation to economic catch-up, and idealist philosophy and nationalist ideology traditions (as these are embedded in liberal-conservative approaches to uneven development).



Benner, Erica. 2018. Really-existing Nationalisms. Verso.

Foster, John Bellamy. 2013. “Marx, Kalecki, and Socialist Strategy.” Monthly Review, April 1.

Gordon, Robert J. 2016. The Rise and Fall of American Growth. Princeton.

Kalecki, Michal. 1971. Selected Essays on the Dynamics of the Capitalist Economy 1933-1970. Cambridge University Press.

Robinson, Joan. 1976. “Michal Kalecki, a Neglected Prophet.” The New York Review of Books, March 4.


Who really supports the arc of Western civilization?

“All that is real in the universe is an infinity of void space, and an infinity of primary particles in random and everlasting motion. Such is the physics of Epicurus…The Epicurean idea of an infinite universe of matter and space, indifferent to human hopes and concerns but whose workings can be understood, is the predominant scientific idea with which we now live. We have fellow feeling with the importance Epicurus attaches to happiness in this life, with his desire to diminish pain and overcome irrational fears, and with his attempt to understand and come to terms with death, the frontier we shall all reach but not cross as the individuals we now are…

The one world realism of Epicurus is made sharper by the principles 1. No thing is ever created out of nothing by divine will; everything happens according to natural laws without the aid of gods. and 2. No thing is ever put out of existence: natural laws resolve each thing again into its primary parts.

…This would commonly be taken as a contradiction of the Genesis story which forms the foundation of Jewish, Christian and Islamic credos about God creating ex nihilo.

But there is an ambiguity. The first two verses of the Book of Genesis may mean either (a) ‘In the beginning God created (out of nothing) the heavens and the earth and (when he had done this) the earth was without form and void…’ or (b) ‘In the beginning the earth was without form and void and (from the pre-existing condition) God created the heavens and the earth…’

The first time that meaning (a) appears unequivocally in the Hebrew canon is in Maccabees 7:28. Generally Christians have preferred (a) and Muslims (b)” (Gaskin, John. 1995. The Epicurean Philosophers: ix, xxiv, xxvii.).

Building Alternatives

“To my mind, the so-called ‘socialist society’ is not anything immutable. Like all other social formations, it should be conceived in a state of constant flux and change. Its crucial difference from the present order consists naturally in production organized on the basis of common ownership by the nation… 

To begin this reorganization tomorrow, but performing it gradually, seems to me quite feasible. That our workers are capable of it is borne out by their many producer and consumer cooperatives which, whenever they’re not deliberately ruined by the police, are equally well and far more honestly run than the bourgeois stock companies”  

Engels, Letter to Otto Von Boenigk (1890).

Capital strike is a problem for working class strategy and strength, as Adam Smith, Kalecki & Sweezy keenly observed. It makes sense not just to disrupt or tear down (though certainly that, see Marx, Piven, Domhoff & Zizek), but also to build fortifications around that fundamental vulnerability, as well as to build an answer to conservatives’ play on the fear of loss. See Rudolf Meidner.

…  Jodi Dean cites Chomsky discussing the importance of working class organize-to-rule strategies, including sit down strikes, co-operative takeovers of languishing industries and economic sectors (think green technology), and a build-up of broad working class-conscicous support for such initiatives:

“In one of the suburbs of Boston, about a year ago, a multinational decided to close down a profitable, functioning facility carrying out some high-tech manufacturing. The workforce and the union offered to buy it, take it over, and run it themselves. The multinational decided to close it down instead, probably for reasons of class-consciousness. I don’t think they want things like this to happen. If there had been enough popular support, if there had been something like the Occupy movement that could have gotten involved, they might have succeeded.” 

We Belong

Let us not, however, flatter ourselves overmuch on account of our human victories over nature. For each such victory nature takes its revenge on us. Each victory, it is true, in the first place brings about the results we expected, but in the second and third places it has quite different, unforeseen effects which only too often cancel the first. The people who, in Mesopotamia, Greece, Asia Minor and elsewhere, destroyed the forests to obtain cultivable land, never dreamed that by removing along with the forests the collecting centres and reservoirs of moisture they were laying the basis for the present forlorn state of those countries. 

When the Italians of the Alps used up the pine forests on the southern slopes, so carefully cherished on the northern slopes, they had no inkling that by doing so they were cutting at the roots of the dairy industry in their region; they had still less inkling that they were thereby depriving their mountain springs of water for the greater part of the year, and making it possible for them to pour still more furious torrents on the plains during the rainy seasons. Those who spread the potato in Europe were not aware that with these farinaceous tubers they were at the same time spreading scrofula. 

Thus at every step we are reminded that we by no means rule over nature like a conqueror over a foreign people, like someone standing outside nature – but that we, with flesh, blood and brain, belong to nature, and exist in its midst, and that all our mastery of it consists (only) in the fact that we have the (modest, potential) advantage over all other creatures of being able (given a responsive social structure) to learn its laws and apply them correctly” 

Engels, The Part Played by Labour in the Transition from Ape to Man (1876). My emphases and modifications.

Capitalism & Corruption

Capitalism overfloweth with marketing. It’s fair enough to point out the system never does deliver the goods.

“First and last, it’s a question of money,” Clarence Darrow said. “Those men who own the earth make the laws to protect what they have. They fix up a sort of fence or pen around what they have, and they fix the law so the fellow on the outside cannot get in. The laws are really organized for the protection of the men who rule the world. They were never organized or enforced to do justice. We have no system for doing justice, not the slightest in the world.” 

Not all condemnations of corruption are equal. Certainly, one can and should warn against getting stuck upon ‘corruption’ as a problem of individual moral failing, against assuming that such an individual moral failing can cause our age’s contradictions and crises. Zizek thunders against clerics’ efforts to blind us to the causes of our problems with their anti-historical, idealist framing:

“The first two things one should prohibit are therefore the critique of corruption and the critique of financial capitalism. First, let us not blame people and their attitudes: the problem is not corruption or greed, the problem is the system that pushes you to be corrupt. The solution is neither Main Street nor Wall Street, but to change the system where Main Street cannot function without Wall Street. Public figures from the pope downward bombard us with injunctions to fight the culture of excessive greed and consummation – this disgusting spectacle of cheap moralization is an ideological operation, if there ever was one: the compulsion (to expand) inscribed into the system itself is translated into personal sin, into a private psychological propensity, or, as one of the theologians close to the pope put it: ‘The present crisis is not crisis [sic] of capitalism but the crisis of morality.’”

But you need not simply use the charge of “corruption” as an emotional tool with which to blind, distract, manipulate, and control nearly-powerless subjects, as the conservative Papacy, flexing its enduring utility to feudal power, does to the unsuspecting, the faithful, and the libertarian. Rather, you can, as does Marx, comprehend corruption as an inevitable product of a social order that demands concentrated economic surplus/power accumulation.

“In every stockjobbing swindle every one knows that some time or other the crash must come, but every one hopes that it may fall on the head of his neighbour, after he himself has caught the shower of gold and placed it in safety. ‘Après moi le déluge!’ is the watchword of every capitalist and of every capitalist nation. Hence Capital is reckless of the health or length of life of the labourer, unless under compulsion from society” Marx, Capital, Volume I, Chapter 10 (1867).

It is not that emotion or condemnation is wrong. Emotion is human, and often must be addressed strategically. Leftists would be autistic dupes to let conservatives monopolize emotions, and ridiculous to flatter themselves that to leave emotion to conservatives makes Leftists pristine, ethical…otherwordly, in imitation of imaginary deities, and similarly ineffable, ineffectual. That’s a trap that’s been laid before, and we should recognize it.

The problem is the socially-irrational concentration of the massive accumulation of wealth–capitalism. That is fundamentally corrupt. The problem is, as Zizek recognizes, “Main Street’s” rigid inability to function without Wall Street, to the point of compounding, brakeless social and environmental irrationality. Socialism is needed to break this free-fall, to put a brake on the capitalist corruption of human sociability.

The Philosophic Roots of Marxism

“The fullest possible appreciation of pleasure creates a need for the prudent management of the flow of pleasures over time, and for a mental grasp of the art of living.”

Marx’s dissertation compared the Epicurean tradition favorably to the Skeptics. Marx used Greek materialism to found his socialist humanism.

Marxist materialism is elaborated by Mandel (D Henwood found this):

Ernest Mandel, Late Capitalism, pp. 394-396: 6.

“…Marx fully appreciated and stressed the civilizing function of capital, which he saw as the necessary preparation of the material basis for a ‘rich individuality’. The following passage from the Grundrisse makes this view very clear: ‘Capital’s ceaseless striving towards the general form of wealth drives labour beyond the limits of its natural paltriness, and thus creates the material elements for the development of the rich individuality which is as all-sided in its production as in its consumption, and whose labour also therefore appears no longer as labour, but as the full development of activity itself, in which natural necessity in its direct form has disappeared; because a historically created need has taken the place of the natural one.’

 For socialists, rejection of capitalist ‘consumer society’ can therefore never imply rejection of the extension and differentiation of needs as a whole, or any return to the primitive natural state of these needs; their aim is necessarily the development of a ‘rich individuality’ for the whole of mankind. In this rational Marxist sense, rejection of capitalist ‘consumer society’ can only mean: rejection of all those forms of consumption and of production which continue to restrict man’s development, making it narrow and one-sided. This rational rejection seeks to reverse the relationship between the production of goods and human labour, which is determined by the commodity form under capitalism, so that henceforth the main goal of economic activity is not the maximum production of things and the maximum private profit for each individual unit of production (factory or company), but the optimum self-activity of the individual person. The production of goods must be subordinated to this goal, which means the elimination of forms of production and labour which damage human health and man’s natural environment, even if they are ‘profitable’ in isolation. At the same time, it must be remembered that man as a material being with material needs cannot achieve the full development of a ‘rich individuality’ through asceticism, self-castigation and artificial self-limitation, but only through the rational development of his consumption, consciously controlled and consciously (i.e., democratically) subordinated to his collective interests.

 Marx himself deliberately pointed out the need to work out a system of needs, which has nothing to do with the neo-asceticism peddled in some circles as Marxist orthodoxy. In the Grundrisse Marx says: ‘The exploration of the earth in all directions, to discover new things of use as well as new useful qualities of the old; such as new qualities of them as raw materials; the development, hence, of the natural sciences to their highest point; likewise the discovery, creation and satisfaction of new needs arising from society itself; the cultivation of all the qualities of the social human being, production of the same in a form as rich as possible in needs, because rich in qualities and relations – production of this being as the most total and universal possible social product, for, in order to take gratification in a many-sided way, he must be capable of many pleasures, hence cultured to a high degree – is likewise a condition of production founded on capital….”

the Fall in the Rate of Profit & Surplus Recycling Mechanisms

This post is a work in progress.

I first heard Andrew Kliman give a talk on his new study The Failure of Capitaist Production (as opposed to the failure of financialization). Tonight I’ve read his argument against the MR falling rate of profit-underconsumption theory. The MR theory finds that financial-military imperial capitalism is a distinctive phase of world capitalism. I will be discussing Kliman’s use of data and rhetoric critically.

To defend financial capital (It’s simply an implied coincidence, in Kliman’s account, that financial capital had grown to an unchecked leviathan before the Great Depression, and before the 2007.), Kliman goes all conservative neoclassical economist, including denying that economic inequality a) is in anything but equilibrium, and b) has any effect on economic systems. He tries to imply that this view on the trivialness of inequality is Marx’s view; I will refute that as I construct this blog entry over time. Although to deny inequality Kliman attacks MR and economists as illustrious as Saez and Piketty, sociologists also need to take note of his manoeuvers, which he will claim he does to ward off fascism. In his bustle to deny, deny, deny the economic impact of inequality, Kliman is disingenuous about both how he treats data and his own “prophetic” identity as well.

Tonight, I’m not going to get to a blow-by-blow analysis of Kliman’s shenanigans in his chapter 8; but suffice it to say, his much-proclaimed loyalty to the actual words of Marx falls hollow in this chapter, where he pretends that Marxists are saying only that underconsumption happens because workers consume more than rich people do. No. That is not at all only what Marx or Marxists say on this topic.

Triumphantly, and really pulling out the conservative econ dogma, Kliman declares that capitalism can proceed without workers’ consumption. This is not a revelation that Kliman is making; this is a dogma that conservative economists and politicians were steadily insisting throughout the last bubble. [See  Citigroup “Plutonomy” corporate report on how all consumption will exclude the working class now: Part 1. Part 2.]

…Only before 2007, the conservative economists also held that economic equilibrium proved that inequality is non-existent or trivial. This article shows that all recent US income growth has gone to the top 1%. It is probably no accident Kliman’s book emerges now, when capitalists can say that they have the system under perfect control, and by implication what is happening to the conditions of accumulation–what is happening to the working class economically (austerity, primitive accumulation) and the state (debt overload, via making real and public the private money debt the financial sector “innovented”) (not to mention the natural conditions of accumulation) is immaterial or restorative to the smooth functioning of capitalism.

Marx has something emphatic to say about this: No. Capital cannot proceed by exploiting other capital. The rate of profit falls because it is dependent upon the creation of value, and in capitalism, value derives solely from exploiting labor, although that derivation depends on using nature and human reproductive services as if they were an “inexhaustible” Plains bison herd. (Anglos always have difficulty with this. Recall why England had to implement reforms in the Progressive Era–because the Boers were kicking the asses of the underfed, undergrown, ricketts-plagued English cannon fodder.)

While there are many ways to eff up your capacity to exploit labor, Marx says specifically that forcing down workers wages (which should be measured relative to the basket of real costs–which include housing, education, health care, corporate tax expenditures, privatized costs–such as transportion– that could be delivered more efficiently publicly) is a major way to eff up exploitation capacity. Kliman wants to conservative-econ away capitalist contradiction.

Q. Why do a number of Marxist-identified economists cling to neoclassical econ’s dogma that economic inequality is trivial?

A. The answer is given here: Inequality and Power: The Economics of Class by Eric A. Schutz (London: Routledge, 2011), and summarized in Yates’ “The Great Inequality“.

As well, In his study “Does Income Distribution Matter for Effective Demand? Evidence from the United States,” Christopher Brown (2004) recalls that it was the conservative economists Friedman (1957) and Modigliani (1966) who established modern consumption theory, attributing no (0) importance to income distribution, and ensuring that economics textbooks maintain a nearly-complete blackout on the topic.

Other economists see inequality’s economic impact:

  • Robert H. Frank: How economic inequality inflates the prices of status goods (education, housing, etc.)
  • Dean Baker, Mark Wiesbrot & John Schmitt at CEPR: the percentage of junk jobs in your economy creates high inequality, social immobility. (Agrees with the Scandianavian power resources tradition.)
  • Monthly Review (Michael Yates)
  • Saez & Picketty
  •  Christopher Brown (2004) and S. Presssman (1997) cite the Cambridge school, including especially Kalecki (1943, 1954) as well as Robinson (1954), and Kaldor (1960), as the source for theory about the relationship between income distribution and consumption.
  • Brown (2004) shows mathematically that “income distribution can have very significant implications for effective demand (298). Then, citing Keynes, he argues that people who accumulate wealth can and do defer economic decision-making, including deferring spending. Using the Thiel index to measure economic inequality, Brown shows that increases in the Theil index correlate with slowing household spending (about 12% between 1967 and 1986) (302), and [finish with discussion of debt].

I think Kliman doth protest too much at the start of chapter 8 in The Failure of Capitalist Production, and I don’t believe he’s going to be straight up (in the conclusion) about what political result he’s hysterically trying to circumvent.  TBD… Kliman’s chapter 8 doesn’t give me much confidence about his falling rate of profit argument; but since I’m inclined to find Dumenil & Levy, et al’s argument against it also distorts the Marxist theory and misinterprets the data, I will see if that earlier portion of the study is more reliable.

I was listening to a talk by the unprepossessing Andrew Kliman yesterday. While I was intrigued and impressed by his argument that all the Marxists would measure the fall in the rate of profit incorrectly (But why would they? Ideological and conceptual infection by conservative econ, at least partly, I think.), I have objections to Kliman’s accompanying refutation of underconsumption crisis–his measurement of the distribution of production proceeds between capital and labor. His story is that since 1960 in the US, although the ratio of capitalists’ aggregate profit to aggregate income (both workers’ & capitalists’ wages) has been constant in the US (indicating in his view a capacity to consume in equilibrium), capital’s rate of profit (s/c+v) declined.

By this Kliman concludes that the falling rate of profit theory is correct, but underconsumption crisis is incorrect. Crisis is strictly an effect of falling profit. Capitalist profit suffers, though workers continue to have the same capacity to consume. (I am as yet unclear how the Wall Street crash of 2007/2008 and the ongoing austerity and European Union crises resulted from mere falling profit, in Kliman’s account. Why would workers default on loans en masse if their consumption capacity remains robust?)

I think a major implication of his analysis is that neoliberalism has done a terrible job managing capital’s interest, if the profit motive is declining though the working class share of the social wealth is a constant. The problem with capitalism in Kliman’s view is simply too much built-up fixed capital, due to excess state intervention. Like Pyne’s bourgeois story of the state suppressing fire and creating tinder, in Kliman’s account, built-up fixed capital is what’s impinging on profit, and it needs to be destroyed; hence, the “crisis” is just voluntary capitals destruction.

On this basis, Kliman argues that there is nothing distinctive about global monopoly capitalism, or financialization. In Kliman’s account, trade is in equilibrium, financial capital is not overgrown and does not reduce productive investment, and introducing more able Surplus Recycling Mechanisms–ameliorating excessively-skewed distribution–cannot defer crisis.

Indeed, if Kliman is right, and the only problem is excess fixed capital, shouldn’t austerity be a lot more effective in restoring profitability than anything else (eg. the Iceland solution), or than it’s looking, when we compare the impact of austerity in the UK and Ireland to the capital accountability approach in Iceland?

I’m dubious about what Kliman’s measuring.


  • To support this argument, Kliman does not disaggregate wages going to capitalists from wages going to people dependent on wages. 
  • I do not think he measures consumption v. profits, but rather wages (+ benefit costs) v. national income.
  • He counts increasing health care costs as income going to wages and consumption. He treats all increasing commodity costs uniformly as increased working class share of national income and consumption. Servicing debt does not detract from working class consumption in his account. He counts housing price inflation as increased worker income/consumption, rather than an anti-Surplus Recycling Mechanism stripping working class income and sending it directly to the black hole of Wall Street unproductive speculation. 
  • Kliman’s finding of a constant working class share of national income is not a per capita measurement, but an aggregate ratio, that does not take into account population increase. It is not immaterial (as feedback) to the rate of profit that the economy is not growing fast enough or distribution is not occurring broadly enough (these are interchangeable, although they switch the system qualitatively from capitalism to socialism) for workers to consume at a constant or increasing individual or family rate without borrowing money from financial capital.
  • To be continued…

Questions for reading Kliman:

Is a commitment to rejecting underconsumptionist / distributive crisis helpful or necessary? Why is Kliman intent to try to argue that the only economic squeeze in the US is on capitalists, and that squeeze has not been deferred to working class Americans in such a way as to impact the economy?

A distributive crisis does not mean you have to have a Keynesian analysis. The fall in the rate of profit is all about the excessive ratio of dead labor (constant capital) to exploited live labor. In capitalism, which is what we’re talking about, that implies a history of market-rational, productivity-increasing, social wealth maldistribution.  For a capitalist, increasing productivity by replacing humans with machines or oil is awesome for profits, up to a point, and so long as no one else replaces humans with machines or oil, which is not a possibility. Meanwhile, in capitalism, for workers, the only thing worse than being exploited is not being exploited. That history results in a falling rate of profit, and meets up with the pre-programmed accumulator’s response to a declining rate of profit: 1)  ratcheting up the rate of exploitation by any means necessary, and 2) primitive accumulation.

 I don’t see why we want to strive so hard to divorce the tendency to the falling rate of profit from underconsumption crisis. Marx didn’t. Productivity-maximizing behaviour is a competitive, collective phenomenon. It’s not as if the tendency to falling profit is important as a threat to the individual capitalist’s profit (There’s a reason we measure it aggregately.) whereas only underconsumption crisis is an irrational effect of aggregated individually-rational capitalist behaviour.

Refusing to acknowledge worsening social wealth maldistribution does not really support the falling rate of profit hypothesis; and it unnecessarily implies that global monopoly capitalism and predatory financial capital are not distinctive, logical, systemic late-capitalist developments. Rather, financialization and accompanying imperialism are surely the non-trivial, corrupt and corrupting products of aging capitalist cores.

Because it allows us to dance around the fantasy that dead labor is exploitable in capitalism (As if you can get increased value-controlling profit without human exploitation.), and thereby creates mystified fictitious capital, financial capital is very important in that it allows capitalist elites to use speculation with fictitious capital to pursue primitive accumulation. You need to primitive accumulate if capitalists have lost confidence in the whole capitalist investment thing, and yet won’t quit their capitalist order, as they will not. Capitalists are typically ideologically convinced  that workers are superfluous to an economy; so capitals destruction is a byproduct of this, not, to capitalist minds, a sufficient condition of profitable investment. (Verify with Hilferding and Sweezy/Baran on this. See note on Varoufakis and Freeman on the role of global war–a form of both primitive accumulation and an SRM–in resuscitating capitalism, below.)

We have to ask ourselves: Are capitalists really always concerned to re-establish the profit incentive per se, as many Marxist-identified economists assume? Or are capitalists primarily concerned to promote and dominate accumulation, in whatever way the system currently permits? Because the profit incentive is not always the only or most currently-exploitable way accumulation can occur. Think about primitive accumulation. Think political economy, not economistically.

What if Over Time, Distribution Becomes Essential to Functioning Economies, and Capitalism Has Severe Issues with Distribution?:
Surplus Recycling Mechanisms

The Marxist argument is that the capital-flow incentive system tends to break down, on multiple levels, as capitalist accumulation develops. Accumulation creates uneven development on many scales, and that clogs up capital. If capital liquidity is a problem, how does capital normally flow? Ideally, in capitalism, capital flows via profitable productive investment incentives (exploitation potential).

Marx (Capital v. III chapter 14 on countermeasures to the fall in the rate of profit), Harvey, and Varoufakis explain how this endemic capitalist structural problem, capital clotting, can be addressed, partly with variable, political, capitalist collective actions delegated to the state–we can call these GSRMs or SRMs (Global Surplus Recycling Mechanisms, or any Surplus Recycling Mechanisms), distinguished from and a crutch to the built-in (and preferred, because it is based in capitalist autonomy) and dysfunctional-tending profit motive. SRMs will vary with elite ideology. Dependent upon that ideology and their own capacity, state regimes perform a variably vigorous, more or less able role in looking out for the mid-term interest of capital, or defibrillating capitalism. 

As well, from a Marxist viewpoint, you can argue that each defibrillation (SRM reform) defers a growing contradiction between capitalist accumulation and the dispossession and depletion of the growing mass of humanity and the environment, possibly reducing SRM capital-defibrillation effectiveness and options in the future. Perhaps we’re there. Perhaps we are not experiencing elite ideology-based failure; perhaps the twitching, tattered remains of the inadequate SRMs at the bottom of the barrel are all that is left to us at this point in history.

However, I tend to agree with Dumenil & Levy and Varoufakis that one problem with current GSRMs is that they are subordinated to the hegemony and violent coercion of the 20th century capitol of capitalism, the US. I also agree with Varoufakis and Alan Freeman that the only SRM that class-conscious capitalists will reliably submit to is global war. Perhaps because global war is not just a GSRM and a destroyer of excess capitals, but also a primitive accumulation bonanza. Global war is a triple threat. (Quadruple, if you also count that it fosters working class patriotism and acquiescence, and targets, takes out, and disrupts wide swaths of working class and peasant humanity.) Although Varoufakis argues that US capitalists were open-hearted in the Global Plan GSRM, more typically SRMs are highly begrudged by capitalists, and insufficiently supported, or opposed. In that way, capitalists are risk averse; they just want to grab as much surplus as they can right now, and use it to stay on top of the heap, whatever the hell may come.

More and more I get the feeling that the Left’s economic illiteracy is not ameliorated by the fact that Marxist-identified economists today are all overly infected by the conservative neoclassical econ tradition they’ve been immersed in, including both its incompatible methods and its prejudices. These economists’ partial analytics cannot see both falling rate of profit and underconsumption–And primitive accumulation and what it means, politically and economically, is hopelessly off their radar. Increasingly, while I find their partial debates of intellectual interest, economist-kings I suspect are not what the Left needs today.

Fragmented: The contemporary version of Marx.

Given C. Brown, then F. Barager & R. Chernomas: Increased debt servicing = increased rate of exploitation (greater proportion of the working day going to the capitalist class). The capitalist class has greater income, the working class less. What does the consumer do with the income?
Q. i) If the capitalist class, per Kalecki-Sweezy can uniquely “defer” consumption, and the way it did so was to use excess profits to speculate (instead of using their increased consumer demand to create a larger capitalist consumer market to replace the working class consumer market)–then isn’t speculation the capitalist consumer market that neoclassical economists see replacing the working class consumer market?  ii) If “consumption” occurs in speculation when speculators lose, then iii) governments that bail out failed speculation, in effect, are governments preventing consumption to occur, thereby creating a crisis of consumption, preventing investment growth.

Engels on Speculation and Political Formation in the US

Friedrich Engels (1892) on political-economic constraints, including speculation, on US political development:

“(W)holly different groups and interests are represented in each of the two big parties, depending on the locality, and almost each particular section of the possessing class has its representatives in each of the two parties to a very large degree, though today big industry forms the core of the Republicans on the whole, just as the big landowners of the South form that of the Democrats. The apparent haphazardness of this jumbling together is what provides the splendid soil for the corruption and the plundering of the government that flourish there so beautifully. Only when…settlement on the land becomes more and more difficult or falls prey to gouging — only then, I think, will the time come, with peaceful development, for a third party. Land is the basis of speculation, and the American speculative mania and speculative opportunity are the chief levers that hold the native-born worker in bondage to the bourgeoisie.

Only when there is a generation of native-born workers that cannot expect anything from speculation any more will we have a solid foothold in America. But, of course, who can count on peaceful development in America!”

Merci to Doug Henwood.

Animal Spirits: Elite Confidence Shaken & Social Change Recognized

“In the domain of Political Economy, free scientific inquiry meets not merely the same enemies as in all other domains. The peculiar nature of the materials it deals with, summons as foes into the field of battle the most violent, mean and malignant passions of the human breast, the Furies of private interest. The English Established Church, e.g., will more readily pardon an attack on 38 of its 39 articles than on 1/39 of its income. Now-a-days atheism is culpa levis [a relatively slight sin, c.f. mortal sin], as compared with criticism of existing property relations.

 Nevertheless, there is an unmistakable advance. I refer, e.g., to the Blue book published within the last few weeks: ‘Correspondence with Her Majesty’s Missions Abroad, regarding Industrial Questions and Trades’ Unions.’ The representatives of the English Crown in foreign countries there declare in so many words that in Germany, in France, to be brief, in all the civilised states of the European Continent, radical change in the existing relations between capital and labour is as evident and inevitable as in England. At the same time, on the other side of the Atlantic Ocean, Mr. Wade, vice-president of the United States, declared in public meetings that, after the abolition of slavery, a radical change of the relations of capital and of property in land is next upon the order of the day.

 These are signs of the times, not to be hidden by purple mantles or black cassocks. They do not signify that tomorrow a miracle will happen. They show that, within the ruling classes themselves, a foreboding is dawning, that the present society is no solid crystal, but an organism capable of change, and is constantly changing.

 Marx, Economic Manuscripts: Capital Vol. I – 1867 Preface.