commissioner.org
| Source | Jim Devine |
| Date | 07/12/21/13:06 |
| In my 1980 UCB dissertation and articles since then (e.g., 1994
RESEARCH IN POLITICAL ECONOMY), I've developed a notion of over-accumulation: 1. capitalists are not just driven ahead by their comparisons between the rate of profit (or rate of return) and the cost of credit. There is also a persistent cost of _not_ accumulating that drives individual capitalists. 2. The cost of not accumulating differs from the benefit of accumulating in that the cost does not go away due to the accumulation, while (on the other hand) the capitalist may actually realize the benefits. That's because the cost of not accumulation is structurally-based, rooted in the social system in which capitalists operate. It does not go away without getting rid of capitalism. A. the first comes from competition among capitalists. Except in the extremely-exceptional perfectly competitive market, if a capitalist does not accumulate, he or she falls behind in the struggle of competition. (BTW, like PC markets, pure monopoly is the exception.) B. the second comes from the persistent class antagonism within production. Investing in new methods to control the labor process produces only temporary results, so that new investment is again needed later on. C. combining these two, the third comes from the internal tension in the "middle layers" of a corporate bureaucracy (the members of which combine some aspects of being competitors with the capitalist management and some of being proletarians). It is easier to "keep the peace" and get the job done if the company keeps on expanding. 3. this process is encouraged by the elasticity of credit under capitalism, absent strict financial regulation. 4. when this process leads to recession (or whatever), it requires "under-accumulation" as a way to purge imbalances from the economy and the re-establishment of the conditions needed for accumulation to proceed again in a somewhat normal way. The form that over-accumulation takes depends on the specific institutional environment of the era. In the 1960s "strong labor" situation, over-accumulation showed up mostly as "over-accumulation relative to supply," with accumulation pulling up wages and raw-material costs, which squeezed profits (and encouraged stagflation). (This over-accumulation involved some depression of the output/capital ratio, too.) On the other hand, in the 1920s "weak labor" situation, excessive accumulation appeared as high profit rates and profit-led growth (which I've called "bootstrap growth" and the "Tugan-Baranowsky path"). It looked good for awhile, but it was an unstable and ultimately unsustainable bubble in the real economy (a kind of Minsky financial fragility, but based primarily outside of finance). I think that the US economy has been transitioning from "strong labor" dynamics back toward "weak labor" dynamics for the last 30 years or so. That does not mean that we'll see a replay of the Great Contraction of 1929-33, since the US still has "automatic stabilizers" and Military Keynesianism (cf. Iraq), not to mention a dominant role in the world system. Nonetheless, the immediate future does not look bright. |
Copyright (c) 1998, Joongpil Cho